Record labels are basically like banks. They difference between labels and banks is that labels want to own all of your songs, while banks just want to loan you money at interest.
As you know, when you sign with a record label, they will advance you money to make albums. This is almost the same as taking out a loan from a bank. The loan is expected to be paid back (recouped) by future album sales.
So what’s the difference between signing with a record label and taking out a bank loan? Record labels just don’t care about making money from interests like banks do—they also want to own and monetize your intellectual property for as long as possible in exchange the loan.
Signing a contract with a major label can lock you in to making music for many years.
Record labels want to make sure they get their money back. When you sign a contract with a major label, they’re not just going to let anything slide. They’ve invested a lot of money into your music and their hope is that it will be profitable for them in the long run.
Record labels want ownership over YOUR MUSIC FOR AS LONG AS POSSIBLE. When signing contracts with major labels, artists agree that their songs belong solely to them after five years or so (if not sooner). The label gets its money back during those first five years but then loses all rights over those songs unless they renegotiate with you again.
You may have little say in the music that you are making once you are signed to a record label.
While you may be able to do what you want with your music, there are still many risks that come with signing onto a record label. The first risk is that once you sign the contract, they have control over the direction of your career. You may not be able to make the music that you want to make if it doesn’t fit into their style or genre. The second risk is that there are many people involved when making decisions about who gets signed and who doesn’t get signed; this could lead to unfair decisions being made against some artists based on factors other than talent alone.
You can get funding from companies like PayPal or banks without needing major collateral as long as you pay them back each month.
It’s important to know that there are ways to get the funds you need without needing a major asset as collateral. PayPal has become an extremely popular option for people looking for quick loans because it is easy to get approved and pay back each month.
The process is simple: after you fill out a short application, they will ask you some questions about your credit history and current finances. In many cases, applicants will receive an answer within minutes – much faster than banks take!
Labels want to own your music, banks/paypal don’t.
Record labels know that signing artists is about getting a cut of the profits from their music. Record labels own all copyrights, master recordings and publishing rights to your music. They want to own you and your creativity because they can make money from it.
Independent artists don’t need a record label because there are other ways for them to make money without being owned by someone else. Your goal as an independent artist should be building your own fanbase and reinvesting your money into your music business.
Final Thought
The bottom line is that signing with a record label is not the only way to become famous in music. If you can find a way to sign with one without giving up your rights to your own music, then you should definitely take that route because it will give you more freedom and control over what happens next in your career. If not, then there are plenty of other ways to make good money from making music without having to go through all the hassle of signing with someone else first.
