Anyone with a passing connection to the music industry knows that artists don’t NEED a record deal to succeed. This is no longer a hot take; it’s common knowledge.
Once exclusive and unique, the services and distribution provided by labels can be replicated elsewhere on much better terms than contained within a traditional major label deal. Plenty of artist service companies and digital marketing firms can provide top-flight promotion. Global distribution is provided by literally hundreds of companies at extremely low cost. Most importantly, talented management companies and more nimble independent labels provide strategic guidance for artists at a level of quality that once could only be found inside the major labels, without taking nearly as large a share of artists’ ownership or economics. New breeds of firms blur and confound old lines between “label” and “management,” as top-tier marketing and A&R talent is increasingly migrating out of the labels and moving to the “artist side.”
When we launched beatBread in 2020, our intent was to lean into artist independence and hopefully do a little bit to help accelerate the trend. Our mission is to free artists of the onerous economic terms and loss of control that comes with major record deals and provide opportunities to artists that major labels just won’t or just can’t fund. Since that time, our belief in this vision has only gotten stronger. But after nearly 500 artist advances in less than two years, we’ve discovered that while we were right about some stuff, we missed some critical realities too. Here’s what we had right in our founding vision and what we missed.
What we got right from the beginning:
There are massive numbers of artists who can make a living from their recorded music, more than many understand. Five or six years ago, only about 5,000 artists globally made more than $50,000 per year on their recorded music. Now that number is 5–7 times as high and will be more than 10x as high in a few years. We’ve seen artists ranked outside the top 2,000 globally making more than $100,000 per month in streaming, artists outside the top 30,000 making over $5,000 per month, and artists outside the top 100,000 in the global Chartmetric and Spotify rankings making over $1,500 per month in recurring streaming payments.
Most artists want to stay independent, regardless of their size or career stage. We see several artists a week who have turned down label deals for years before taking funding from us. We even see a few artists each month who are in label deals and want to leverage our funding to get out of their label relationship.
Artists can grow very fast without being signed. All it takes is good content, a plan, and a little resource. We’ve funded hundreds of artists who have grown their fan bases to significant levels (10s of thousands, hundreds of thousands, or even millions of monthly listeners) before ever getting involved with a label. Many of them have doubled or tripled their fanbases within a year, leveraging our funding with the talent for marketing and content creation they already possess within their own team.
What surprised us along the way:
Artists aren’t romantic about “independence”; they are ruthlessly pragmatic. A tiny number of artists’ desire to remain independent reflects deeply held values and a sense of personal “renegade” identity. Still, most artists and management teams who want to stay independent rationally weigh a label deal’s economic and strategic costs against the flexibility and increased upside potential of remaining independent. In hindsight, this seems obvious, but it’s easy for anyone (including us) to get hung up on the mythical stereotype of the independent artist who makes their decisions on philosophical, anti-corporate, and purely creative grounds.
Even though we understood the reasons that made independence a more viable option earlier than many others, we underestimated how rigorously most artists and management teams approach their business decisions when weighing label, financing, and partnership opportunities.
Too many artists lose a great deal of control and ownership without ever signing a label deal. This has been the most surprising — and arguably the most disappointing — revelation in our first two years of existence.
Far too often, we see a promising artist that has successfully grown their fan base with great content, hard work, and their own marketing efforts but has signed an arrangement with a distributor, “shell label,” or other middleman who not only takes a large share (sometimes as much as 30 or 50%) of an artist’s economics but also locks them into a captive marketing or distribution arrangement.
Many music entrepreneurs, managers, independent labels, and distributors add real value to an independent artist’s career and development. However, there are many more, particularly those who ostensibly “serve” early-stage artists, who are very good at selling artists a vision and locking a three or five-year distribution and services deal with slick service and promotion pitches that aren’t worth the paper they are written on. These deals don’t take outright “ownership” of an artist’s work so that an artist may still be classified as independent, but they take large chunks of the economics, control, and choice over service providers, for years at a time.
The worst examples of these deals come from small operations, but even the standard contracts of some “mainstream” providers serving masses of independent artists have some of these abusive terms embedded in them. We hope that increased competition and transparency in the independent distribution and artist services markets will drive out these terms in the coming years.
More artists can retain control, ownership, and flexibility inside a major label deal than we had imagined. Some artists who have taken funding from us have used it to grow their fanbases, increase their leverage and then sign a short-term “limited works” deal (a few songs or up to a whole album’s worth) with a major label, under terms that include a healthy economic share, ownership of their catalog, and, critically, freedom to quickly “flip independent” on their next project.
When we founded beatBread, we knew that these “special label deal” arrangements were available to global superstars and historical icons. However, seeing these deals offered to developing artists well outside the top 10,000 globally has been a pleasant surprise. This is still an edge case, but we’re proud to have helped artists build the leverage to effectively engage with labels as marketing resources and service providers rather than gatekeepers or powerbrokers to whom artists must cede undue control, flexibility, and ownership.
We’ve always believed that the long-run role of the music label is to double down on artist service and marketing, even as their historical focus on artist development and funding fades away. Seeing this happening even faster than we’d imagined has been surprising and edifying.
Ultimately, we think we got the big things right from the beginning.
For most artists, retaining independence is the best way to ensure they maintain control, freedom, and choice to work with the best service providers at each stage of their careers. The independent sector is not only growing fast; it’s already much larger than many understand. However, we probably didn’t fully grasp that independence isn’t an end in itself.
Too many artists end up sacrificing control, choice, and too large a share of their economics early in their careers, all while staying independent in name only. At the same time, a precious (but growing) few earn the privilege to keep control, choice, and ownership inside of a label deal, putting their “independent status” on layaway for a little while, with a real and meaningful opportunity to go and get it back in the future without giving up too much.
In other words, independence is cool, but control is even cooler.
By Peter Sinclair, CEO & Co-Founder at beatBread
What is beatBread?
beatBread is a pioneering music funding platform with a mission to empower artists so that they can own their art and control their careers. We give more independent and unsigned artists access to funding and more choice to select the promotion, marketing, and production partners that best fit their unique needs.
Founded in 2020, beatBread brings together a team with deep experience in music, finance, artificial intelligence and machine learning to create new opportunities for artists and their managers. beatBread provides financial advances that are repaid through a limited share of revenues from streaming and airplay, over a period of the artist’s choosing.
