Inside a record label
Inside a record label the work splits into 4 roles, and a small label in the scene on this site does all 4 in-house with a team of 1 to 5 people. The structure of an independent label is the same as the structure of a major, only smaller: there is the person who signs the artist, the person who makes the record, the person who gets it to the listener, and the person who keeps the books. The small label compresses those roles into fewer hands, which is why the structure of a small label looks different from the structure of a major but does the same work. This page breaks down the roles, the departments, and the revenue flow that make a small label run.
This is the map of the inside of a small label: it names the roles, groups them into the departments the work falls into, and follows the money from the sale to the payout, so a reader can see how the small label scene is organized.
The roles a small label hires
The roles a small label hires are the 4 jobs the work splits into, and each one has a name and a task. The first is the A and R, the person who finds the artist and signs the deal, and on a small label that is usually the label head. The second is the production role, the person who records, mixes, and masters the album, and that may be an in house engineer or an outside studio the label books. The third is the distribution and sales role, the person who ships the record to the distributor and the stores and handles the orders, and the fourth is the promotion and booking role, the person who books the shows and writes the press. A small label of 1 or 2 people does all 4 roles itself, and a label of 5 splits them across the team. The roles are the structure, and the small label scene is a collection of labels that each carry the 4 roles in some form.
The departments the work falls into
The departments the work falls into are the 4 groups the roles cluster under, and a small label treats them as the sections of one small office. The first department is the catalogue and the A and R, which owns the decision of which artist to sign and which record to release. The second is the production, which owns the studio, the mastering, and the artwork, and it is the department that turns the songs into a finished product. The third is the distribution and sales, which owns the pressing, the shipping, and the storefront, and it is the department that gets the product to the listener. The fourth is the promotion, which owns the shows, the press, and the audience, and it is the department that keeps the artist visible. The 4 departments are the same 4 a major has, only the small label runs them with a fraction of the staff, and that compression is the whole of the small label structure.
How the money flows through the label
How the money flows through the label is a loop with 2 ends, the revenue at one end and the cost at the other. The revenue comes from 4 sources: the physical sales of the CD and the vinyl, the streaming royalties, the sync licenses, and the merch and the ticket split. The cost is the 4 departments spending: the production pays the studio and the pressing, the distribution pays the shipping, the promotion pays the booking and the press, and the A and R pays the time of the signing. The label keeps the margin between the two, and it splits the revenue with the artist on the terms of the contract, which on a small label is often a 50 to 50 split after the costs are recouped. The flow is the same for every label in the small label scene, and it is the reason the structure exists: the departments spend the money, the revenue brings it back, and the label lives on the difference.
Where the structure differs from a major
Where the structure differs from a major is in the size and the control, not in the shape. A major label has a department for each of the 4 roles, with a team of 10 or 20 in each, and a marketing department that decides what gets pushed. A small label has 1 to 5 people doing the same 4 roles, and the label head decides what gets released. The control is the difference that matters, because the small label answers to its audience and its artists rather than to a marketing department, and the world, folk, jam, and singer songwriter music the scene releases is the music the major's structure is not built to sign. The shape is the same and the size is different, and that is the small label structure in a sentence.