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A record label is a brand created by companies that specialize in manufacturing, distributing and
promoting audio and video recordings, on various formats including compact discs, LPs, DVD-Audio,
SACDs, and cassettes. The name derives from the paper label at the center of a gramophone record
(what is also known as a "phonograph record" in American English).

Most major record labels are owned by a few large multinational companies (Big Four record labels)
that make up the almost all of the global recording industry, although there is a recent resurgence in
independent record labels. <IllyRap Recordings>

Labels as brands
Recording companies often invest a lot of time and money in discovering new talent or developing the
talent of artists already under contract. The association of the brand with the artists helps define the
image of both the brand and the artist.

Although both parties need each other to survive, the relationship between record labels and artists
can be a difficult one. Many artists have had albums altered or censored in some way by the labels
before they are released -- songs being edited, artwork or titles being changed, etc. Record labels
generally do this because they believe that the album will sell better if the changes are made. Often the
record label's decisions are correct ones from a commercial perspective, but this typically frustrates
the artist who feels that their artwork is being destroyed.

In the early days of the recording industry, record labels were absolutely necessary for the success of
any artist. The first goal of any new artist or band was to get signed to a contract as soon as possible.
In the 1940s, 1950s and 1960s, many artists were so desperate to sign a contract with a record
company that they usually ended up signing a bad contract, sometimes giving away the rights to their
music in the process. Entertainment lawyers are used by some to look over any contract before it is
signed.

Industry consolidation
In the 1970s and 1980s, there was a phase of consolidation in the record industry that led to almost all
major labels being owned by a very few multinational companies, who in turn were members of the
RIAA.