It’s nearly 2025, and more artists than ever are opting for independent labels. From the Arctic Monkeys, Bon Iver and Macklemore, some of your favourite artists are on indie labels and you wouldn’t even know it.
This research is showing why. MIDiA Research reported that non-major labels grew revenues by 13.0% in 2023, compared to 9% for the major labels. This means that the non-major label market share was up for the fourth consecutive year, reaching 31.5%. Further research shows that independent labels made up 50% of Spotify’s $9 Billion payouts in 2024, another 4 times the amount generated in 2017.
Major and Indie Record Labels: The Difference
Indie labels ‘have been a part of the music landscape for over six decades, gaining prominence during the late 1980s and early 1990s alongside the rise of genres such as hip hop, electronic dance music, and grunge. This era saw many artists who were overlooked by major labels find a home in the indie scene, allowing them to flourish creatively without the constraints typically imposed by larger corporations’, according to Recording Connection.
Typical benefits to working with an independent label are creative freedom, better financial terms, personal support and less industry pressure.
Major Labels ‘are responsible for discovering new talent, signing artists to exclusive contracts, and releasing their music to generate revenue for both the label and the artists. The process involves various professionals, including producers, writers, engineers, and marketing teams who collaborate to create and promote music effectively’, as per Soundplate.
Major labels are often referred to as the "big three":
- Universal Music Group (UMG): The largest label globally, UMG holds approximately 32% of the market share and has a diverse roster of artists, including Taylor Swift and The Rolling Stones.
- Sony Music Entertainment: With about 21% of the market share, Sony represents artists like Michael Jackson and Bob Dylan.
- Warner Music Group (WMG): Holding around 16% of the market share, WMG has signed iconic acts such as Madonna and Led Zeppelin
These labels collectively control about 70% of the global recorded music market, significantly influencing trends and artist development within the industry.
With that in mind, let’s explore why more and more artists are choosing indie labels over the majors.
The Digital Age — Technology
Technological advancements have played a pivotal role in the rise of indie labels and independent artists with companies such as Distrokid making distribution to streaming services more accessible than ever.
Social media has evened the playing field for artists to promote their music, meaning a TikTok with zero budget can be just as effective as a big budget campaign. This links to the shift in consumer preference with listeners seeking a ‘more personal and meaningful connection with the music/ artist they consume’, lending itself to indie labels with their often sense of community and artistic freedom.
Read also: TikTokification of Music Industry: Is It a Real Thing?
Despite vinyl sales making up over 40% of album sales and the 16-year streak of consecutive growth since 1990, physical sales are still dwarfed by digital assets, with the convenience of streaming services outweighing LPs. Vinyl production is viewed as a major label asset, so with the digital world being at the forefront of the industry, the playing field is instantly levelled for indies to be just as effective despite their smaller marketing budgets.
Read also: The Revival of Vinyl: Shaking Up the Industry
Creative Control
Indie labels pride themselves on artist empowerment and creative control, allowing artists to create unique worlds for listeners and diverse sounds. This allows them to develop and innovate, setting new trends in the industry. With major labels commonly being known for cut throat approaches, it’s easy to see why an artist would take the indie route.
The accessibility to music creation has grown to an extent of just needing a laptop rather than access to big studios, birthing DIY artists such as Steve Lacy who recorded his first EP using his phone and garage band.
Contracts – The Split, Recoup & Costings
A major difference between signing to a major label compared to an indie is the contractual obligations and the recouping process. Listed below are key differences:
- Royalty percentages: Indie labels typically offer higher royalty percentages to artists, often around 50%, while major labels rarely offer more than 18%.
- Advance amounts: Major labels provide larger advances, usually $150,000-$300,000, whereas indie labels offer $5,000-$125,000 or may only cover recording costs.
- Recoupment scope: Major labels often recoup advances and various expenses (recording, marketing, etc.) before paying royalties. Indie labels may limit recoupment to recording costs.
- Contract duration: Indie labels tend to offer shorter contract terms or fewer options, while majors may push for longer commitments.
- Profit-sharing: Some indie labels offer profit-split deals, sharing net profits 50/50 with artists after recouping all costs.
- Rights reversion: Independent labels may release master rights after a few years, unlike majors.
- Contract flexibility: Indies often have more flexible, artist-friendly contracts compared to the complex, long-term agreements of major labels.
Indie Label Success
There have been many success stories of independent artists and labels, from Domino Records artist Arctic Monkeys selling millions of records and gaining several number 1’s. 4AD represents massive artists such as the Pixies and Bon Iver, and even more local labels such as Melodic representing Strawberry Guy with over 8 million monthly listeners and millions of streams.
Beyond any Label a few artists have shone through and made massive success’ from Chance the Rapper winning a Grammy for completely independent mixtape ‘Colouring Book’ and Macklemore who has remained completely independent throughout his whole career gaining billions of streams and millions of fans.
Major Label Subsidiaries
Notably, movements such as EMI North and arguably the biggest success story AWAL (Owned by Sony) perfectly demonstrate this. ‘AWAL offers artists a range of services while allowing them to retain ownership and control over their music. In 2021, it was acquired by Sony Music Entertainment from Kobalt Music Group for approximately $430 million.’
With a stacked roster, including Little Simz, JVKE, Tom Misch, girl in red etc, AWAL are clearly doing it right with features such as:
- Artist ownership: Artists maintain ownership of their music and receive a significant share of streaming revenue, reportedly up to 80%.
- Comprehensive services: AWAL offers global marketing, creative services, A&R (Artist and Repertoire), playlist promotion, publicity, and access to real-time music data.
- Global presence: The company has offices in major cities worldwide, including London, New York, Los Angeles, and Berlin.
Despite the shifting tides, major labels still hold mass influence over the industry due to their extensive catalogues from current and legacy artists. But times are changing as majors have begun to acquire indies to create subsidiaries, offering the best of both worlds.
Major labels operate as a business, whereas indie labels for the most part run as passion projects building communities, where taking on a risk on an artist is more viable and the reward much sweeter. With the prominence of indies such as AWAL, the general scope of the industry seems to lean towards the indies in the future where deals are farer and the advantages are equal with digital scope.
