Let me start by saying this. An artist selling their catalogs to an indie label is different from an indie label owning that catalog in perpetuity from the beginning. Big difference. So, now that we’ve established that, after running an independent label for 18 years, I decided to (for the foreseeable future) not enter into any new “traditional record deals” with any recording artists. I believe that an artist should own their masters unless they decide to sell. An artist should treat their music as a business to ensure that its worth is high enough to have a chance of selling, even if they don’t intend to sell.
For major labels, I get it. They are all publicly traded, so they get a pass, although they’ve had to adjust to more licensing agreements than usual. As for independent labels, there have to be ways of controlling output without owning masters from artists. Licensing, distribution, and label services are all great for artists and a way for labels to work with artists on their terms. As far as the business of the label, the downside is you are participating in an asset that you might not be a part of when and if your company sells if you wanted to eventually exit.
Labels need to have a business model in place to ethically produce releases, consistently, that they have ownership in. Enter the “label is the artist model.” This model isn’t necessarily new but, leaning into it at scale brings it to a whole new space. Here’s how it works. The label or imprint hires a creative director, and that individual’s task is to produce music through collaboration. The label can be specific on what they want or they may let the creative director* have free reign to create. All songwriters and producers involved receive points on the master recording and own a share of publishing. Everything is fair and it’s the label’s job to market the song or collection of songs because they commissioned it. *Note: A creative director should be a music producer or someone with the ability to executive produce releases from start to finish.
Take a look at the diagram below. The creative director earns publishing, master recording royalties, merchandise royalties, and a percentage of live events and content or films in connection to the imprint. This gives the label a more predictable long game with a section of its catalog and more control over marketing and consistency. Revenue from this side of your independent label will help fund your label so you can make deals that are more favorable to artists and there’s way less risk.
The majors already have a head start. All three have deep catalogs ranging decades. If you don’t have a superstar on your roster, you need to make sure you have a string of releases in your pipeline. When done right, this model will help any label keep a consistent release schedule in between your releases with artists on your label.
As of this year, my company, Valholla Records (a division of Valholla Worldwide Entertainment Group) is spending the next few years focusing on this business model to build one of the largest independent catalogs in the world. I just started a new discord documenting me running this company relying mostly on this model. Lastly, for us, and this model, I’m serving as creative director and I’m producing songs for releases from my rotating collective, Vince & The Valholla Empire. Since leaning into this model, we’ve already had a record year. If you’re interested in joining our discord, reach out to @vincevalholla on all social platforms, and I’ll send you the link.
Indie label owners, it’s a new day. Let’s use this model to highlight new artists. This “Label is the Artist” model is a perfect launchpad for the development of an artist as well. It’s all about collaboration.
For more on “Label is the Artist”, click here for the case study.