What Do Record Labels Do?

In the dynamic world of electronic music production, understanding the role of record labels is crucial for any aspiring producer or DJ. But what do record labels do, exactly? They are not just about distributing music; they play a vital role in shaping artists’ careers through A&R (Artists and Repertoire), marketing, distribution, and more.

The landscape of record labels is diverse, ranging from major labels like Sony, Warner, and Universal to independent powerhouses such as Ministry of Sound, Armada, and Spinnin’. These labels are instrumental in the electronic music scene, providing a platform for artists to reach a global audience. Let’s dive into what makes this industry tick and explore the key functions of record labels in 2026.

Major vs. Independent Record Labels

Major record labels, including Sony Music, Warner Music Group, and Universal Music Group, dominate the global music industry. They have extensive resources and networks, which allow them to promote artists on a massive scale. In the electronic music domain, these majors often work through subsidiaries like Ministry of Sound, Armada Music, and Spinnin’ Records. These subsidiaries focus specifically on electronic and dance music, leveraging their niche expertise within the broader corporate structure.

On the flip side, independent labels, or “indies,” offer a more personalized approach. Labels like Anjunabeats, Dirtybird, and Monstercat provide tailored support and often afford artists more creative control. The autonomy and niche focus of indie labels can be advantageous for artists looking to carve out a unique identity in the saturated market of electronic music.

How Record Deals Work in Electronic Dance Music

When it comes to record deals in the EDM scene, there are two primary types: licensing deals and full signing deals. Licensing deals allow artists to maintain ownership of their master recordings while granting the label rights to distribute and promote the music. This is often appealing for artists who want to retain control over their work.

In contrast, signing deals involve the label taking ownership of the master recordings in exchange for a larger share of the promotional and distribution efforts. This can lead to more significant exposure but at the cost of some creative control.

Typical Royalty Splits

Understanding royalty splits is vital for producers. Major labels typically offer a 50/50 split, meaning half of the revenue generated from the music goes to the artist. However, independent labels generally offer more favorable terms, such as an 80/20 split in the artist’s favor. This can make a considerable difference for artists looking to maximize their earnings from streaming, sales, and licensing.

Self-Releasing vs. Signing with a Label

With platforms like DistroKid and TuneCore, self-releasing music has become more accessible than ever. These services offer artists the ability to distribute their music to major streaming platforms like Spotify and Apple Music without the need for a label. However, self-releasing requires significant effort in marketing and promotion, often without the vast resources a label can provide.

Signing with a record label can alleviate these burdens, as labels have dedicated teams for marketing, promotion, and distribution. This support can be invaluable for artists looking to focus on their music rather than the business side of things.

Aspect	Self-Releasing	Signing with a Label
Revenue Share	100% to Artist	50%-80% to Artist
Marketing Support	Limited	Extensive
Creative Control	Full	Varies
Distribution Reach	Limited	Global

How Labels Scout New Talent in 2025–2026

The methods labels use to discover new talent are continuously evolving. In 2026, platforms like SoundCloud, YouTube, and TikTok are hotspots for A&R teams scouting fresh talent. These platforms allow artists to showcase their work to a global audience, often catching the eye of labels seeking the next big electronic music sensation.

While traditional demo submissions are still relevant, many labels now prefer to see an artist’s online presence and engagement metrics as part of their scouting process. This shift emphasizes the importance of building a strong online brand and audience for any producer looking to get signed. Resources like MusicRadar and Spotify for Artists provide invaluable guidance for optimizing your online presence.

Record Labels and Ghost Production

The concept of ghost production has become an integral part of the electronic music industry. Many artists and labels use ghost producers to enhance their output and maintain a consistent release schedule. This practice allows producers to focus on performing and touring while still delivering high-quality music.

Platforms like The Ghost Production offer services that connect artists and labels with professional ghost producers. This collaboration ensures a steady flow of fresh tracks, helping both parties achieve their goals efficiently. For labels, utilizing ghost production can be a strategic move to keep their catalog diverse and competitive.

Pros and Cons of Major and Independent Labels

Choosing between a major and an independent label involves weighing several pros and cons. Major labels offer extensive resources, global distribution, and robust marketing campaigns. However, they also come with less creative control and typically less favorable royalty splits.

Independent labels, meanwhile, provide more personalized support, higher royalty rates, and greater creative freedom. But they may lack the financial muscle and reach of major labels, potentially making it harder to break into international markets.

Leveraging External Platforms for Success

In today’s music industry, leveraging external platforms is crucial for success. Producers should consider using tools like Splice for creative inspiration and collaboration, while platforms like SoundCloud and Resident Advisor can bolster an artist’s visibility and credibility.

Understanding how to navigate these platforms is essential, and resources like The Ghost Production’s ghost production services can be a valuable asset for artists seeking to enhance their output without burning out.

Frequently Asked Questions

What is the main role of a record label?

A record label’s main role is to support artists through A&R, marketing, and distribution, helping them reach a wider audience and enhance their career growth.

How do record labels make money?

Record labels primarily make money through the sale and distribution of music, earning a share of the revenue generated from streaming, sales, and licensing.

Why do artists choose independent labels?

Artists choose independent labels for greater creative control, higher royalty percentages, and more personalized support tailored to their unique vision.

How can I get my music noticed by record labels?

Building a strong online presence on platforms like TikTok, SoundCloud, and YouTube, and engaging with your audience can increase your chances of being noticed by record labels.

Is ghost production ethical in the music industry?

Ghost production is largely considered ethical as long as all parties involved understand and agree on their roles, and it allows artists to maintain a steady release schedule.