research into record labels for A2 Media

1. Record Labels
How are they distributed?
What avenues are used?
Why is social media important for these companies?
How are the using the social media?

2. How are they distributed?
Independent Distributors:
• All record companies (with the exception of major
companies who have their own branch offices) use
regional independent distributors to get their
product to retail stores. Records are shipped
from the company manufacturing the record to the
ten or fifteen regional distributors based on
orders received from the retail stores they
service. The shipment is on a consignment basis
and both the store and distributor have the right
to return the product within a certain time
frame. Records which constitute sales are paid
for by the distributor at a pre-arranged price,
usually about 50% of the suggested retail list
price. Due to the return privilege, it often
takes as long as six months to receive accounting
and payment for records shipped. The key
determining factor in the marketing process is
airplay of the record which stimulates market
demand and orders for the product.
Major Label Branch Distribution:
• The major record companies such as CBS, RCA, MCA, and
CAPITOL have branch offices which handle the sales to
record stores in their respective regions. These
companies search for recording artists whose recordings
they produce and distribute through their system. Much
of the record product distributed by the majors comes
from independent production companies and labels which
find and develop talent and bring it to the attention of
the major. Once a major label decides to "pick up" an
artist, the usual arrangement involves payment to the
production company of advance royalties (used to recoup
production costs), expenditures for record manufacturing,
promotion, advertising and marketing. The major label
controls all marketing and promotional decisions and
budgets and will have from three to five options for
terms of one year each to produce additional records.
All further production will be in accordance with budgets
and schedules set forth in the licensing or recording
agreement between our company and the major label. In
this type of arrangement, the major label will pay a
negotiated royalty rate to the production company who, in
turn, will pay the artist and producer a pre-determined
royalty rate.

3. Promotion
Adequate promotion is vital and essential to the commercial success of a record. There are many
ways to promote records and many differing opinions as to the deepest market penetration use of
promotional dollars.
Independent Promotion Specialists: Promotion specialists are consultants who specialize in knowing
the program directors and disc jockeys at the major radio and television stations, syndicators, and
those stations which set the trends and report to national chart services. Their job is to get the
record played on the radio by convincing the program or music director of each station to listen to
the record and give it a chance.
Video Promotion: Today there are over 400 different television programs using video music clips in
the United States plus some type of similar programming in most overseas markets. With the
overwhelming commercial success of MTV and TNN and CMT as prime examples, and their proven track
record for stimulating record sales, arrangements should be made to produce a video promo clip of
one song from the first album. Production will begin soon after the completion of the recording of
the album. The video will then be released in conjunction with the release of the record to maximize
exposure of both the song and the artist during the initial three month period.

4. Social Media
Social media presents an interesting opportunity. As music fans, most of us turn to Twitter or Facebook to
keep updated about our favourite bands, whilst new tracks or videos will 99% of the time get their launch on
social channels. Furthermore, social media is where music audiences naturally congregate, forming their own
communities and sharing their experiences of bands and artists.
The most obvious application of a social media monitoring tool is to measure the buzz around a specific
release. Despite dwindling budgets in the industry overall, big bucks are still spent on the marketing of
big releases.
Identifying and engaging with fans is a crucial step in solidifying a band’s relationship with its
audience. Before the advent of social media music fans would congregate offline, whether it be at
conventions or through the back-pages of the music press. Now, communities form in disparate places and on a
broader range of interests, whilst bloggers are arguably more influential than journalists from more
established titles. Using social media monitoring to identify these authors and to engage with them, whether
with pre-release material or to launch a mini-campaign, will give a label tangible routes to market amongst
true advocates.
The music business has always had to react to change – new formats, new technology and new business models
mean an industry in a constant state of transformation.
The internet and, more specifically, social media, has been incredibly disruptive to the music business and
so labels and artists have had to adapt. This is most evident in how labels and artists attract new
audiences and for that we’ve seen an exponential rise in brand sponsorship. Brands such as Coca-Cola, O2
and Everything Everywhere, spent approximately £100million in 2012 on festival, artist and online
endorsements. For artists, this means they can leverage a big brand’s marketing budget and get exposure to
new audiences. And in an attempt to align their brand with a young and increasingly solvent audience, it
gives a brand a chance to appear ‘cool.’

5. For example: The Brothers Loveless are a two-piece blues-rock band from Derbyshire their debut album was released this week
largely to positive reviews which is evidenced in the significant amount of positive sentiment:
An increase in buzz surrounded the albums’ release on Monday and was maintained during the week in anticipation of their
appearance at the Bank Holiday Reading & Leeds Festival.
Aside from Tom Watson, Drenge have garnered support from a range of influential voices. By ordering the below table by the
number of Followers, we can see that high profile news site and blogs are commenting on the band, as well as individual DJs
and bloggers. From a PR perspective these authors are worth their weight in gold, exposing the band to an incredibly large
and varied audience.