The Pros and Cons of Independent Record Label Deals

When it comes to getting a record deal, finding the right fit with a label is critical—but is an indie or a major record company a better fit for you? First, you need to know the difference.

The common perception of a "record label" is one of the major record labels, located in Los Angeles or New York, which signs all of the major players. These major record labels, including Sony and Capitol Records, are major corporations with hundreds of millions of dollars behind them. This allows them to fully fund the biggest artists out there. In the eyes of emerging artists, a record deal with a major label was always the big prize to chase after.

However, the major music industry is on life-support with the introduction of online social networks and digital music retail stores such as iTunes, Rhapsody, and Amazon—and the fact that major releases are often leaked to the internet weeks before their release day. Enter the Indie (short for Independent) label.

What Makes a Record Label ‘Indie’?
Any music recording label that operates without the funding of the organizations of the major music labels is considered an indie label. While major labels are global and operate their own publishing and distribution companies, indie labels work with other smaller companies, either in long-term partnerships or in smaller contractual relationships for their distribution and publishing needs.

The Indie Niche

While indie labels can’t offer the kind of funding for artists that the major labels can, because of the benefits, indie label contracts are fast becoming a new goal for many artists—and a more realistic goal at that. And they do offer many benefits that the Big Guys can't. Because of all the upsides (and the escalating trend toward social media and digital platforms that's not abating), indie labels have created a true niche for themselves.

Let's take a look at the benefits (and the downsides) of working with an indie, and check out the pros and cons of working with a major label for a full 360 view.

The Pros of Working With an Indie Label

Respect for Your Music

Indie labels generally have the freedom to work with whomever they like. There's no pressure like you'd find at major labels to sacrifice your tastes in favor of seeking chart success. When you are signed to an indie label, in almost every instance it's because the label is a huge fan of your music; that translates into dedication because they believe in what you're doing.

Close Working Relationships

Because indie labels have smaller staffs and tighter rosters, musicians can more easily develop a close relationship with the people working on their record. Although it's not always the case that artists can pick up the phone and get an immediate answer, the odds of closer communication are greater than they are with a major label.

Artist-Friendly Deals

Some larger indie labels have relatively complex contracts, but smaller indies often do business on little more than a handshake and a profit split agreement. You seldom find indie labels demanding any measure of creative control over their artists, and most indies don't lock their artists into long-term, multi-album contracts.

The Cons of Working With an Indie Label

Indie labels are not without their drawbacks. Consider the following before you decide who you want to sign with.

Money

While money is the top reason to sign with a major label, it definitely tops the list of negatives for indies. While some indie labels are sitting pretty financially, most small operations are just trying to stay afloat. They usually don't have the coffers to fund an all-out media blitz like the major labels, and they often have to get creative with promotion ideas. They also can't afford big advances, fancy packaging, large recording budgets, tour support, and other perks a major label has the funds to offer you.

With indie labels, you'll usually have to remain financially invested in your own music career.

Disorganization

Not every indie label is disorganized, but the informal nature of operations at many smaller indie labels means some elements can get a tad bit confusing. As an artist, you might find that details may sometimes slip through the cracks, or it may be hard to figure out processes that aren't quite formalized, like accounting, for instance.

Size

Although the intimate size of indie labels has its upside in terms of closer and more accessible relationships, there is also a downside to being small. Indies don't have the purchasing power of major labels, and with a small roster, they have fewer strings to pull with the press. Also, the smaller the label, the less influence, and power within the music industry.

Written by: HEATHER MCDONALD