Roles of a Record Company

Written by lee morgan
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Roles of a Record Company
Record companies are the scouts, the bank and the promoter for music artists. (guitar guitarist music musical instrument image by david hughes from

Record companies aren't as visible as they once were. With the near absence of tangible vinyl, cassettes or even CDs, no one seems to remember who the labels are. However, they are still around and still perform many of the same tasks as they always have. The role of the record company may have changed in respect to the physical format of the music they are involved with, but they still are involved in the process from conception to final product.

Find Talent

The first job of the record company is to find new talent and sign them for record deals. Talent scouts from record companies in cooperation with executives study the trends and try to guess what will be the next big hit in rock, country or other genres and go out and look for the best unsigned talent they can find.

Record companies still approach musicians playing in bars or small clubs and offer them opportunities with the label. This opportunity often includes a recording session and the signing of a contract that will allow the singer or band to get their music heard.

Provide Funding

The record company is the bank when it comes to producing recordings for the label. The record company provides funding to rent a studio, hire session musicians if necessary and to pay the engineer. In some cases the record company may also offer payment to the talent to help them live while working on the album and for future projects. They may also be contracted for royalty payment should the recordings be commercially successful.

The record company is also responsible for providing the money needed to create the recordings and to duplicate them in CD format or in a way that allows them to be uploaded via the Internet.


Many larger well-known music stores will not carry music that does not have a distribution deal. In other words, there has to be proof that the item (CD) will be available from a specific, reliable and legitimate source.

The record company is usually the distributor for a recording as well. They mass-produce and sell the recordings to music stores and handle the collection of money from sales. This ensures that the record is available to people in a wider range of locations as opposed to just selling the recordings at live shows.


The record company is a promoter. This role in the business is what makes or breaks an act. If the recording is showing a potential for success, the record label will get promoters out on the streets spreading the word about the music. This may involve convincing radio stations to play the music, getting videos made, arranging personal appearances, taking out advertisements and scheduling shows or tours in order to get publicity for the record.

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