A new study from an industry group representing indie record labels has laid out the economics of the business.
The report from the Organization for Recorded Culture and Arts (ORCA) looked at the 2023 earnings of nine prominent indie labels: Alligator Records, Domino Recording Company, Hopeless Records, Ninja Tune, Partisan Records, Playground Music, Secret City Records, Secretly Group, and XL Recordings
It found that labels invested an average of $236,197 per artist in 2023, or about a third (33.5%) of their revenue. In total, they spent $134 million in support of 569 artists across different genres and geographies.
The participating labels generated $239 million in revenue, and distributed $79.9 million to artists. Looked at from the perspective of profit, the labels earned $1.77 for every dollar spent, and paid out $0.59 to artists, equivalent to 77% of their profit.
Of that $236,197 spent per artist, the largest share (46.8%) went towards organizational infrastructure and capacity. The share of label spending that went towards artist marketing, distribution and visibility support amounted to 36.4%. Artist creative development and production accounted for 9.6% of labels’ costs.
“This underscores the substantial contributions of the sector,” the report stated.
“If these numbers represent just nine labels, it follows that the global independent label sector, composed of thousands of businesses, contributes many times more in overall investment and economic impact.”
ORCA Executive Director Patrick Clifton said the report marks the first time that “real numbers” have been put to the “economic power of independent labels and the benefits this model delivers” for artists.
“Independent labels have always championed a long-term mindset, developing an artist over time, taking creative risks and nurturing new sounds that shape the music industry,” he said.
“Independent labels have always championed a long-term mindset, developing an artist over time, taking creative risks and nurturing new sounds that shape the music industry.”
Patrick Clifton, ORCA
“This report shows that, while new models for distribution and marketing are constantly emerging, the independent record label model continues to provide the expertise, resources, and support musicians need to reach ever-bigger audiences and develop sustainable careers,” added Anna Bond, Director of Planning and Initiatives at Secretly Distribution
Looking at sources of income, the report found that streaming accounted for the largest share of these indie labels’ revenues, at 59.5%, with physical sales at 25.9% – substantially higher than the music industry overall, which derives 16.4% of revenue from physical.
The indie labels also took in substantially more revenue from synch than the global average, with 7.4% coming from synch versus 2.2% for the industry overall.
The report also noted that artists signed to the nine labels an average 44% increase in Spotify followers between 2023 and 2025
The report looked at gender equity among indie labels, finding that among the nine labels, 31.5% of executive and senior management roles were held by women, compared to just 13.2% across the wider music industry, per data from the USC Annenberg Inclusion Initiative.
Among artists, 23.1% of active artists at the labels were women, and 41.8% of all artist projects involved women. By comparison, the Counting the Music Industry study, which looked at gender representation at more than 200 UK labels, found that 20% of musicians engaged in recordings were female.
“This report highlights a notably higher level of gender equity in leadership among the participating labels, while acknowledging that further progress can still be made,” ORCA said.Music Business Worldwide
