Def Jam Recordings Downsizes; Are Major Record Labels Still Relevant?

Def Jam Recordings Downsizes; Are Major Record Labels Still Relevant?

Island Def Jam/Motown record labels appear to be suffering from the economic downturn. Hip-hop’s most legendary record label laid off 20 employees. The most shocking layoffs were of renowned executives Jonathan McHugh and Chris Hicks.


Record labels are going through an adjustment after the industry failed to keep up with technological advances.


File sharing and record leaks have put a dent in record sales for the past 10 years. In turn, the average new artist will not receive a multimillion dollar advance and the executives who help to guide the careers of musicians lack the job security of past decades.

To make up for low album sales, the record labels are currently making new artists sign 360 deals. The deals allow record labels to get a percentage of money earned from shows, merchandising and film projects.


But major record labels could become obsolete within the next 20 years, or their roles will change tremendously.

The labels once held power by controlling the marketing and distribution of music. But due to affordable production equipment, software and social media, independent artists can reach as many people as major artists without giving up a majority percentage of each album sale.

Case in point, Kansas City rap artist Tech9 has never signed with a major label, but he has sold over one million records and sells out concerts in every city that he travels to. If all independent artists could follow Tech9’s business model, there would not be a need for major record labels.

However,  Jay-Z and Kanye West may have provided hope for major record labels. The recent release of Watch The Throne was not leaked prior to its release. The album sold 292,000 downloads and broke an iTunes record.

Will the record labels have new life by using iTunes and other online stores, or are we witnessing the fall of major record labels? –amir shaw

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