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According to new calculations by Manatt, Phelps & Phillips, LLP, an independent artist may make nearly four times as much revenue from streaming as an artist signed to a major label. The numbers show that artists signed to major labels receive around 18.4 cents out of every streaming dollar, while unsigned artists make 64.18 cents out of every streaming dollar. The math used to come to this conclusion is shown below:
As the music industry continues to develop and evolve in the 21st century, it is more important than ever for artists to examine the pros and cons of signing to a major label-is it necessary? Will it help them, or will it limit them?
Based on the information shown above, if an artist already has a decent size fanbase, it may be in their best interest to not sign with a major label (in order to avoid losing royalties), and instead stay independent. However, if an artist does not have a large enough following, it is likely that they will not be receiving much money from streaming anyway, and it might be beneficial for them to sign with a label.
As technology continues allowing for the growth of the independent artist, it is more prominent a question than ever-could the end of the major record labels be near?