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The largest record label in the U.S. is Universal Music Group, with a revenue of $10.0 billion and an market share of 37.5%.
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As of 2021, the U.S. record label industry has a market size of $10.3 billion.
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Over 109 million albums are sold in the U.S. each year.
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The U.S. record label market is projected to grow at a CAGR of 4.27% through 2026.
The record label is a key player in the music industry. They are responsible for finding talent, although sometimes the talent finds them.
Once a musician signs to a label, the label then is responsible for producing the “records,” manufacturing, distribution, marketing, and promotion. They are also responsible for enforcing the copyright.
The 10 Largest Record Labels In The U.S.
The top three largest record labels in the U.S. are known as the Big Three. They control a sizeable portion of the U.S. record industry. After the Big Three, there are several other record labels with medium and small market sizes.
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Universal Music Group
2022 Annual Revenue: $10.0 billionUniversal Music Group, sometimes called UMG Recordings, Inc. is an American company. While they are an American company, their majority owner is a French media conglomerate called Vivendi, and a Chinese tech company, Tencent, owns a minority share.
They have a gigantic group of labels and brands that work under this umbrella company. Their catalog includes companies all across the globe, from Argentina to the United States and 40 countries in-between.
Their holdings in the United States are some of the best-known record labels from the past and include:
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Capitol Music Group
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Def Jam Recordings
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Fame House
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Interscope Geffen AM
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Island Records
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Polygram Entertainment
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Republic Records
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Spinefarm Records
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Universal Music Enterprises
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Universal Music Group Nashville
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Universal Music Latin Entertainment
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Universal Music Publishing Group
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Verve Label Group
Universal Music Group is the world’s leading music company and their website states that they exist to shape culture through the power of artistry. With their massive collection of artists, it’s sure that their goal is within their reach.
The company’s history goes back to the formation of the American office of Decca Records in 1934 and then that company branched out on its own in 1939. It wasn’t until 1962 that American Decca merged with MCA.
In 1990 Japanese Matsushita Electric purchased MCA, but five years later 80% of MCA was purchased by Seagram and the next year it was renamed Universal Studios, Inc. and the music section was named Universal Music Group.
And that’s just the beginning of the mergers and sales. You can see that it’s quite a convoluted family tree for this record label.
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Sony Music Entertainment
2022 Annual Revenue: $8.3 billionSony Music Entertainment is an American music company that is part of Sony Music Group and has a global reach. This company is a giant in the field, but then again, so are all of the Big 3. Their labels include:
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Columbia
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RCA
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Epic
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Arista
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Arista Nashville
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RCA Records Label Nashville
Sony Music Group is owned by Sony Corporation of America, which falls under a partnership of Sony Music Holdings, Inc. and Sony Entertainment, and all of those companies come down to ownership by one giant, the Japanese company Sony.
Originally founded in 1929 as American Record Corporation, the company changed names in 1938 and became Columbia Recording Corporation after it was acquired by the Columbia Broadcasting System. A reorganization in 1968 led to the name being changed to CBS Records. Then, 20 years later, the company was purchased by Sony but held onto its name until 1991 when it was named Sony BMG. Eventually, Sony bought out Bertelsmann Music Group, the BMG arm, and became Sony Music.
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Warner Music Group
2021 Annual Revenue: $5.9 billionThe third of the big three is Warner Music Group. Don’t feel bad for them, they’re still an incredible business and own some of the most successful labels in the world. Their well-known labels include:
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Elektra Records
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Warner Records
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Atlantic Records
With headquarters located in New York City, Warner Music is publicly traded on the New York Stock Exchange. They were traded there from 2005 until 2011 and then sold to Access Industries but in 2020 they once again became a public company.
The start of Warner Music is fairly interesting as the label began in the Warner Brothers film studio. One of their actors, Tab Hunter, had a number one song but even though he was contracted to Warner Bros. for acting, his record label was with Dot Records, which was owned by the rival film studio, Paramount Pictures.
Warner wanted to own all of Tab’s talent and that of their other actors, too. So, they went out and purchased Frank Sinatra’s Reprise Records so they could own their label.
And then, like all of the other labels, numerous sales and trades and different ownership groups followed. This trend has continued to this day and there’s no sign of it stopping for any of the Big 3.
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Independent Music Labels
2021 Annual Revenue: $9.9 billionIt may seem that all record labels fall under the big three, but some holdouts have resisted that trend. These companies are typically called independent record labels, or indie labels.
Independent labels are often thought of as renegades and small businesses which isn’t always the case. They can be owned by very large companies and have just as complex a hierarchy and history as the Big 3.
Indies are also thought to be more artist-friendly. This is pretty accurate. They tend to give their artists a royalty split that’s 50-50, which is better than the Big 3.
Part of the reason the indies are more artist-oriented is that a lot of them are owned by artists. Remember that Frank Sinatra owned Reprise Records once before it was purchased by Warner. This happens quite often to a variety of indie labels. An indie label today might become part of the Big 3 tomorrow.
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Atlantic Records
2018 Annual Revenue: $500 millionThe Atlantic Recording Corporation was founded in 1947 and quickly became one of the premier labels for jazz, RB, and soul music. Today Atlantic Records is owned by the Warner Music Group and they’ve expanded their genres to include rock and pop music.
Some of Atlantic’s most notable artists include Aretha Franklin, Led Zeppelin, Roberta Flack, Crosby Stills Nash Young, Otis Redding, and Ray Charles. Although there are many, many more.
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Virgin Records
2021 Annual Revenue: $370 millionFounded by Richard Branson, Simon Draper, Nik Powell, and Tom Newman in 1972, Virgin Records is a true success story. Today, they are under the Universal company umbrella.
Initially, Virgin was the label of English and European progressive rock and was propelled into the punk rock era. Their artists at the time included the Sex Pistols, Culture Club, Public Image Ltd, Human League, Skids, Simple Minds, and XTC.
And then all the mergers, acquisitions, and buyouts, alongside the label adding more mainstream artists such as George Michael, Paula Abdul, Genesis, Keith Richards, the Rolling Stones, Smashing Pumpkins, and the Spice Girls.
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RCA Records
2021 Annual Revenue: $73 millionRCA Records is owned by Sony Music Entertainment and is one of their four flagship labels. Because RCA has been around so long, they’re the second oldest record label in America, they’ve branched out into a lot of different genres. This is something that not every record label can do successfully.
They can be found on pop, classical, rock, hip-hop, afrobeat, electronic, RB, blues, jazz, and country music albums.
A few of their iconic artists are Elvis Presley, David Bowie, Buddy Guy, Britney Spears, Dave Matthews Band, Alicia Keys, and Justin Timberlake among many, many others.
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Interscope
2021 Annual Revenue: $57.0 millionOwned by UMG, Interscope was founded in the 90s and had a model of letting the artists and producers have full creative control. They were a huge part of a gangsta rap controversy in the mid-90s and were owned, at the time, by Warner. Warner cut ties, and Universal picked them up.
Based in Santa Monica, California, Interscope is “home” to Dr. Dre, Eminem, Madonna, Gwen Stefani, Selena Gomez, Kendrick Lamar, Lady Gaga, Lana Del Rey, Maroon 5, U2, and Billie Eilish.
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Island Records
2021 Annual Revenue: N/AIsland Records is another label that made its mark in jazz music. What started as a British-Jamaican record label in 1959 is now owned by UMG. Like most other labels, they went through many different owners before landing here and their music made a few shifts, too.
Island Records began in jazz but fell into a large independent record label world in the late 1980s which was fortunate for them then because indie music was huge. Island became very influential in the progressive music scene.
Some of their key artists include Justin Bieber, Bob Marley, Queen, Tracy Bonham, Amy Winehouse, Iggy Azalea, Janet Jackson, and Cat Stevens.
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Def Jam Recordings
2021 Annual Revenue: N/AWith their hip hop, pop, and urban niche, Def Jam Recordings became a well-known record label with some extremely popular bands. Some of the artists they represent are Kanye West, Jeezy, Logic, YG, Fabolous, Lady Gaga, and Rihanna.
Co-Founded by Rick Rubin and Russell Simmons from a dorm room at New York University, Def Jam hit gold with their first releases being from La Rock Jazzy Jay, LL Cool J, and the Beastie Boys’.
Today, Def Jam falls under the parent company of Universal Music Group.
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The History of the Record and Labels
The beginning of the record label begins with the start of records. The very first recordings weren’t on vinyl and they weren’t music. But it didn’t take long for people to realize that the record player was perfect for music at home.
The first record deal was probably the 1904 agreement between Victor Talking-Machine Company and an artist. They gave that artist $4000 per song and $0.40 per sale. This led to the first platinum record sales. From that point on, the industry evolved.
The term record label refers directly to the label that was printed and attached to the records. The company that produced the album wanted to put their name out there as well as the artist’s name and they clearly did on the labels.
The Big Three Labels
The really big record labels are often owned by bigger companies that have a lot of different businesses.
Sometimes they do well and focus on the music aspect and other times they decide to let go of the music end of their business and sell off a label and all that goes with it. Because of this, there has been a lot of change and names have come and gone.
Today, there are three big record labels. That’s right, just three of them. This is the least there’s even been, but it involves a whole lot of mergers over the years.
Record Label FAQ
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What is the largest record label in the United States?
The largest record label in the U.S. is Universal Music Group. Universal Music Group has a revenue of just over $10.0 billion in 2021 and a market share of 37.5%. The next biggest record label in the U.S. is Sony Music Entertainment, with an annual revenue of $8.3 billion in 2021.
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How big is the U.S. record industry?
The U.S. record industry has a market size of $10.3 billion. Much of the U.S. record label industry comes from its three largest companies, Universal Music Group, Sony Music Entertainment, and Warner Music. Collectively, these companies are known as the Big Three due to their dominance in the music industry.
References
Author
Kristin Kizer is an award-winning writer, television and documentary producer, and content specialist who has worked on a wide variety of written, broadcast, and electronic publications. A former writer/producer for The Discovery Channel, she is now a freelance writer and delighted to be sharing her talents and time with the wonderful Zippia audience.
