The independent label enjoys a certain freedom that majors do not. They are not managed by a multinational conglomerate so they don’t have the pressure of annual financial reports to live up to (see “The Big Picture,”). They are owned and operated usually by one or two people with a love of music and a brash entrepreneurial spirit. But these days there seems to be an underlying desire for many record companies to market themselves as “independent” when in fact they are controlled wholly or in part by one of the majors. PolyGram, for example, when it existed, had almost 100 smaller labels under them at one time, some of whom would refer to themselves as independent.3
The term “production company” is often misrepresented as an indie label. For example, consider Shady, a “record company” owned by the artist Eminem. It’s displayed like this: UNI/Interscope/Shady. The last label in the distribution chain, Shady, is, in reality, only a production company. They sign the artist and develop the act. The next label in the chain, Interscope, usually markets and promotes the act, and the last label, UNI, one of the Big Four, distributes the record.4 (Use of Shady as an example is not meant to imply that they are trying to misrepresent anything. It’s only an example.)
It starts to get confusing as to whether a label is a true independent. Logic would simply define independents as labels that are not distributed by one of the Big Four. But consider this example: Favored Nations (considered by many to be independent) is distributed by independent distributor RED. But RED, one of the largest independent distributors in the world, is 60% owned by Sony. Does that mean that Favored Nations is no longer an indie label? Sony claims it’s a silent partner with RED, allowing them to maintain their own clientele of mom-and-pop record stores. Of course, this might change in time.5
To add to the difficulty in defining “independent” is the fact that a single indie label could have several distributors. For example, at one time, the indie distributor Vernon Yard was partially distributed by another indie distributor, Caroline, and partially by its parent major label, Virgin. Yet parts of Caroline are also distributed by Virgin, and all of Virgin is distributed by EMI, slated to be owned by Warner in 2006. Confused?
In the early part of the 1990s the industry saw a serious readjustment: the sale of MCA to beverage behemoth Seagram (makers of the famous vodka). Following this was the forming of DreamWorks with record industry guru David Geffen. Both had rippling effects throughout the industry that resulted in a great deal of consolidation.6 Because of this consolidation, nowadays it’s common to find labels that are not controlled by one of the Big Four, yet have some of their product distributed by them. These labels have crossbred the family tree of majors with independents to become what some have called “the major/indie.”
And then there is yet another criterion that must be considered: The actual contract that the artist will sign. The theory behind signing with an indie is that the business will be more relaxed. More creative control and less suit-and-tie crap. But most of the so-called indies that we’re talking about here use the same contract that majors employ. Why? Well, because many an indie has dreams of being bought out someday by a major. Having a contract that is too radically different from the majors’ could nix a deal. Also, many so-called indies don’t have the money to develop their own legal templates (which costs thousands of dollars to do from scratch). They use existing contracts, figuring that these are the best since they were produced by major labels. So, considering these circumstances, it can be argued that any label that uses the same contractual structure as a major is seriously thinking about selling out to one, and should be disqualified from the being able to hold its head up as an true “indie.” (See “Indie in Disguise,”)
So who’s left? If every label is somehow tied to the Big Four in some way, what alternatives do we have? Well, there are many small labels that are not distributed by the Big (Brother) Four but rather by smaller distributors such as Dutch East India. These distributors function just like Big Four labels in that they shift the burden of warehousing and shipping the records to stores off of the label and charge them a fee of about 25%. Indie volume demands are also much lower. An indie distributor would be happy to ship from 5,000 to 50,000 or more records a year from one label. These numbers would be a joke to a Big Four company.
By strict interpretation there is only one company that is presently independent and has annual sales equivalent to a major label—the Walt Disney Company. They produce, manufacture, and distribute everything themselves. But we don’t think of them as an independent, for obvious reasons.