Where do record labels stand in music’s streaming wars?

Apple Music is signing exclusivity deals with musicians, paying for music videos, giving artists a huge platform in return, while Spotify continues to grow in power and influence. But where does this leave record labels, and are they being phased out of the process?

Skepta won the Mercury Prize without the support of a record label (Getty)

In his Mercury Prize acceptance speech, grime artist Skepta noted how Konnichiwa’s songs “travelled the world, no record label or nothing, they just travelled the world”. And in 2016, independence doesn’t need to be justified. For many artists, it’s the default option. Music’s best Twitter bio – JME’s “No label, No pr, No publisher, No manager, No pa, No stylist, No Instagram, No meat, No dairy, No egg & No Fluoride” – is a fair reflection for how musicians operate today. It’s not that outside intervention should be resisted; it’s just that today, the options are more open than ever for building a fanbase and selling out shows on your own terms.

Depending on how it’s perceived, today’s talked-about ‘streaming wars’ are another way for acts to gain independence. While Apple Music, Tidal and Spotify fight it out for exclusives and subscribers, artists are the main draw – and many are being offered giant sums in return for their next release. Apple Music is going further, paying for music videos (they funded Drake’s “Hotline Bling”, for starters) and putting money behind tour videos for Taylor Swift. In the case of Frank Ocean, he’s believed to have left his record label, Def Jam, before pursuing an Apple Music release for Blonde (Endless, the visual album that dropped the day before, was also hosted on the platform). By offering huge sums at various steps in a musician’s career – not just in an album release, but in singles, videos and touring – are streaming giants now too involved? And where does this leave record labels, who used to be far more responsible for funding and building an artist’s career?

“We’re not in a position as an industry just now to turn down the offer of investment when it’s on the table,” says Colin Roberts, an artist manager at Big Life Management, which looks after the likes of Bloc Party and Nadine Shah, and previously handled London Grammar. Few get close to a Beyoncé-level of superstardom, but when acts reach a certain status, their ambitions grow with them. The bigger the idea, the bigger task it is to fund what they want. “Creative people have big ideas that deserve to be realised,” he says.

Drake’s ‘Hotline Bling’ video was funded by Apple Music (Getty)

Amy Morgan, manager of Oxford group Glass Animals and a creative director at Beggars Music Publishing, agrees. “Artists don’t want to be told they can’t do things, that ideas aren’t possible, that things won’t work. If Apple or any other platform can offer solutions and ways of helping them realise their vision, then of course, that is going to be very attractive,” she says, adding that the relationship between artist and label is “under strain” currently. “There is less money, fewer sales, more competition and not enough understanding of how to engage with audiences through new technology and platforms.”

Amaechi Uzoigwe works at Monotone Inc and manages Run the Jewels, a fiercely independent act who have succeeded through innovation and a refusal to play by the rules. Amaechi says Apple’s latest moves are encouraging. “Apple is finally reinvesting in a space that's generated billions and billions of revenue for them. Generally there’s a sugar daddy in the mix somewhere, anyway.” He adds that “streaming is still in its infancy – though growing rapidly – thus opportunities will exist for new players to emerge, especially in emerging markets.”

As a new act starting out, however, big money deals with streaming giants don’t feature in the agenda. One in a million will form a collective as unstoppable as JME and Skepta’s Boy Better Know. Ever fewer have the do-it-yourself knowhow of someone like Chance the Rapper. “For an unsigned act, it may be a whole different financial and positional ballgame, but hopefully they can be inspired by a similar spirit to take control of their destiny,” says Amaechi. In the current climate, there’s a greater possibility than ever to go it alone, thanks to self-release platforms like Bandcamp, where acts can sell LPs, T-shirts and cassettes directly to fans.

But in terms of building an actual long-term career, labels are by and large part of that journey. “I don't think you can ever underestimate how far a passionate team of people can take something,” says Morgan, although she also admits that “fewer and fewer labels” are investing in artists in the “long term.” Roberts adds: “Despite all of the bad press record labels get (and that press is in some ways justified) they also bring more to the table than just money. There’s some amazingly creative and enterprising people at record labels who can help in many ways.”

The head of a UK-based independent label, who prefers to remain anonymous for this piece, argues that a good, well-machined label is “more important than ever before in supporting and developing an artist’s career”. He also adds that when looking at the world’s biggest acts and how they’ve released records in the past year, they’ve almost formed their own structure, mirroring the workings of a label. He raises the question: what is a label in today’s terms? “Frank Ocean’s management company are covering roles that his label used to,” he says. “The world’s top artists are realising that a small, focussed team with a clear strategy can achieve better results than a large multinational major. In effect, these artists are forming indie labels around themselves, no?”

With Apple Music and co gaining more control – and more of a say in how music is released – some labels are fighting back. The Universal Music Group president, Lucian Grainge, reportedly banned streaming exclusives, partly as a reaction to Apple’s involvement in Frank Ocean’s recent releases. In further displays of power, streaming sites have been accused of “burying” music from an act, if they signed up for an exclusive on a rival service. Roberts claims this isn’t an unusual tactic, or indeed a new phenomenon. “It’s been happening for a long time – do an exclusive in one place and you’ll be punished in another. It’s nothing new in music: there’s a lot of pride and ego and everyone feels their service or store is the most important,” he says.

Frank Ocean is believed to have left his record label, Def Jam, before pursuing an Apple Music release for his latest album (Getty)

Artists, management companies and labels are all in a situation where they want their music to be heard by the maximum number of people, while also trying to keep everyone happy. There isn’t a general rule of thumb to follow, in this case. But we’re not in a crisis where labels are embattled with streaming sites, desperately clinging on to the artists they’ve signed. There’s plenty of cooperation, and even greater effort to make sense of how streaming has changed everything.

“I think there is a lot to learn about how streaming can democratise music, about how artists signed and unsigned can use that to their advantage,” says Morgan. “I'm not sure if those lessons are best learned from the giant artists or from a better understanding of how people are using streaming to listen to music, not only discovering new artists but also engaging with them in the long term.” In other words, the options are open for any musicians starting out. Take inspiration from today’s biggest independent acts and go it alone, or build the foundation for a big career with a label that knows what it’s doing. The key remains the same – to keep a fanbase invested and connected, instead of being alienated by exclusivity windows or industry politics.