(Magazine article, Atlanta Christian Underground, 6/2004)
Alot of people do not know the difference between a major label and and independent label. When comparing them, we must note that there are several different kinds of each. All major labels fall under one of the big six. The Big Six are distribution companies including CEMA, SONY, UNI, BMG, WEA, and PGD. Major labels are under the umbrella of one of these. For instance, WEA owns, Warner Brothers, Elektra, and Atlantic. Artista is under BMG. Paisley Park is under Warner Brothers which is under WEA. Word Records is under Sony. Where the label is in the chain determines the power it has within the scope of the company. Independent labels may utilize one of the distribution companies or they may develop one of their own, but they are not owned by one of the big six. Why would you want to be owned by one of the big six? That one is easy...resources. These companies have been around along time and have alot of resources at their disposal. These resources are what make the industry possible. Alot of independent labels hope to one day be underneath the umbrella of the big six and have access to their vast resources.
Now what does all of this mean to the artist? Well, on a major label, the artist receives various types of advances. An advance is an allotment of money that is to be use for certain things. There are recording advances, merchandising advances, publishing advances, touring advances, etc. Many artists, before they are signed, think of an advance as free money. However, this is not true. Advances must be paid back to the label before the artist recieves any profit from their royalties. It is not a gift, it is a loan. Imagine the major label as being a large bank like Citibank. They will loan you the money...but you must pay it back. With independent labels, there is little or no advance. Artists generally pay up front for the things that would be advanced by a major. However, they often receive the company cost (wholesale) on the services and items they need to purchase. Alot of services are provided on spec, meaning that the cost for these are paid as a percentage of the artist royalties instead of having to be paid for upfront. Also without an advance, the artist sees profit sooner. Think, if you don’t have bills, the money your earn is yours.
Independent labels often spend more time developing their artists. Often major labels will seek out artists that have been on indie labels because they are more professional and have been trained at how the industry works and have had their performances, images, and music sculpted into a more professional product. Majors consider independent labels to be training ground. Like major league sports compared to minor league sports. Major labels have alot of overhead to pay for and often, sometimes regretably, do not take the time to train and develop their artist. They expect the artist to know these things already.
(c) 2004 Atlanta Christian Underground