How Do Record Companies Operate?

Sony, Universal, Warner Music these are the global giants when it comes to artists management. You might be wondering how your favorite super star is making it on the global stage, the likes of Wizkid, Davido, Diamond Platinumz & Stomzy to name a few. Here is how it all functions How Do Record Companies Operate?

How Do Record Companies Operate?

How Do Record Companies Operate?

Record Companies provide support in three key ways:

1. Discovering & nurturing Artists:

Enabling them to develop their sound & their craft.

2. Producing the work of the Artist:

Producing their music & other forms of Creative outputs (such as visual media or merchandise) so they can enjoy the greatest success creatively & commercially.

3. Promoting Artists:

Connecting them with fans in New & innovative ways.

Creative teams produce high quality videos whilst promotional experts publicise and market artists and their music. Other teams manage essential backroom jobs: accounting for sales and consumption and delivering artists their royalty payments. This requires substantial investment. Artists signing cost to be faced are advances, recording costs, video production, concert/tour support, marketing & promotion.


Are commonly paid to artists to allow them to concentrate on writing, rehearsing and recording. Advances are non-returnable, but recoupable against future royalties. Record Companies are therefore taking risks in this highly competitive market.

Recording Costs:

These are to be paid to the most sought after producers, sound engineers & session recorders.

Video Production:

The record label must make sure that the artist matches the criteria of music videos being shown on the international scene.

Concert/ Tour Support:

The artist must move around with an entourage at all times when attending or performing at an event, so as to offer the artist a complete sense of value. The entourage may include a Manager, a photographer/videographer, a Bodyguard, a make-up/hairstylist to mention but a few.

Marketing & Promotion:

This is the biggest item of spending, where labels have key impact. As consumers increasingly access music digitally, marketing efforts have shifted substantially online, where labels create campaigns that directly link fans to artists and services where they can access their music.

There are tens of thousands of artists on label rosters worldwide. Newly signed artists are the lifeblood of a record company. In addition a record company provides artists with access to wealth of experience, expertise and a network of connections. They collaborate creatively with developing artists helping them to realise their vision for how they want their music to sound and how they want to express visually to their fans.

So there you have it top principles on how record labels function in any market of the world.

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