Investing in talent: The urgent need for more record labels in Ghana

Investing in talent: The urgent need for more record labels in Ghana
Merlin Moon Studio. Credit: Vintage King

The music business evolves by the day and our current dispensation has brought us to the new wave, the wave of record labels.

Yes, it may not be new but at least, this dispensation has popularised it.

As far back as 2006, Richie Mensah’s Lynx Entertainment was birthed. Lynx Entertainment produced the likes of Richie Mensah himself, Asem, Irene Logan, Eazzy, MzVee then down to Kidi, Kuami Euegene, Dopenation and recently Maya Blu, DSL, St. Lennon and others.

Right about the same era 2005 Nigeria’s Chocolate City was established by lawyers Audu Maikori, Paul Okeugo, and Yahaya Maikori, now home to artistes like MI Abaga, Ckay, Blaqbonez and others.

Record labels are essential pillars of the music industry, providing artists with the platform and support they need for successful careers.

The record label journey in Ghana had its climax moments, with the surge of labels like Sarkcess Music, Legacy Life Entertainment, Burniton Music, Ground Up, Black Avenue Musik, Zylofon Music, Highly Spiritual and Shatta Movement.

You would argue that Shatta Movement and Ground Up are not record labels but they basically provided their artistes with that enabling environment to nurture their crafts, so, let’s acknowledge them as such, at least for this piece.

Investing in talent: The urgent need for more record labels in Ghana
Some record labels in Ghana. Credit: Ghana Insider

These record labels utilised funds from investments to cater for video shoots and music promotion while they muster revenue for the artistes alongside revenue from their streams and performances. From the labels mentioned, we noticed artistes like Kwesi Arthur, Kidi, Kuami Eugene, Kofi Mole, Strongman, King Promise, Akwaboah, Kelvynboy, Captan, and Addi Self. There were a lot of discoveries between 2015 to 2018.

However, it’s sad to consider that this wave just fell off, it died. Strongman and Akwaboah exited Sarkcess Music, Shatta Wale and his Militants fell out, and Kelvynboy and OV departed from Burniton Music. What was the next move? Apparently, these artists did not renew their contracts and just moved on to become independent artistes. Or they just were not comfortable with the deals made to them. Let’s explore that.

In a record deal, an artist and a record label enter into a contractual agreement wherein the label undertakes the financial backing of the artist’s recording ventures, covering expenses such as upfront payments to the artist, recording costs, and overseeing marketing and sales efforts. In return, the artiste commits to exclusively recording for the label, with the understanding that the label will own the rights to the produced recordings. The artiste is entitled to a share of the label’s revenue from sales and licensing, subject to covering incurred expenses. This type of deal is commonly entered into by many artistes in the industry.

Actually, there are a few types of record deals that we could delve into to get a broader scope of how this business works. These deals include 360 Deal, Distribution Deal, Production Deal and Profit Split Deal.

Under 360 Deals, the record label and the artists enter into a kind of partnership in which the label experiences prolonged losses. A significant sum of money is invested in the artiste’s growth, paying for all costs associated with marketing, recording, touring, and other activities. The label then receives a return on its investment from the artiste’s total earnings, which includes touring and merchandise sales.

Jay-Z signed a 10-year 360 deal in 2008 with Live Nation worth $150 million which he later extended in 2018. The deal included revenue from Jay-Z’s music sales, touring, merchandise, and endorsements. Jay-Z also launched his own record label, Roc Nation, which operates as a subsidiary of Live Nation.

In a profit-split deal, the label pays all expenses and gives the artiste a sizable advance in exchange for a 50/50 royalties split. Therefore, in a profit-sharing agreement, the label recovers the advance, recording, marketing, and any additional costs incurred by the artist, whereas in a traditional record deal, the label only recovers the advance and the recording costs. Profit split agreements appear to be the best options for the artist (50% profit split + significant advance) and the record label (100% recoup).

These days, distribution agreements are more and more common and usually the least predatory option available to independent musicians. They also provide the fewest resources at the same time, so it really depends on the kind of investment an artist feels their release deserves.

Distributors concentrate on getting the music to the Digital Streaming Platforms (DSPs) and, based on their contract with the artiste. The distributors manage their connections with DSP representatives in order to assist with playlisting pitches. The artist and their team are responsible for handling the marketing and promotion. An example of this deal will be Kuami Eugene and Kidi’s record deal with Empire Distribution in America.

Although they always go unnoticed, production deals have the potential to be among the most enticing offers to cross an artiste’s table. The artiste typically signs a 50/50 contract with one producer in a production deal. While maintaining complete ownership of the master recordings, the producer consents to produce one or more of the artist’s albums in its entirety. Renowned producer in the hip-hop and R&B scene, Timbaland signed a production deal with Background Records and worked with artistes such as Missy Elliott and Aaliyah.

Record labels are no longer vibrant in Ghana’s music industry lately. Check this out: Ruger and Joeboy, two of Nigeria’s youngest musicians, recently left their established labels to start their own. Why? The time has come for the following generation of kings and queens to move their way.

Ghanaian musicians appear hesitant to launch or even run record labels, and I can see why—the general public tends to ignore the business side of things and only care about feelings, especially when there is a fallout. Many believe that the more established artists sign the younger artists to their labels in an attempt to “steal the shine” from them. These will undoubtedly deter musicians from signing artistes, thus leading to the collapse of record labels.

Looking at the various capable record deals, it is obvious that a lot of our artistes sign Traditional deals, where the artiste will record only for the label; the label typically owns the recordings the artiste makes and music videos are posted on the label’s YouTube Channel. These deals presented to the artistes lack variety and discourage these artistes from extending or even signing. What exactly was or is the challenge with our labels in Ghana?

These labels don’t have any outside funding. Not much money is poured into these labels to even entice artistes to be presented with different record deals. After signing for the first two years, the artiste records performs, earns money, and determines he is well-established enough to continue. Why would these musicians put themselves through so much stress when working with labels is always easier? They’re stumped by something. They’re not getting variety, in my opinion.

Keep in mind that Kidi and Kuami Eugene were signed exclusively to Lynx Entertainment. Discussions about their departures started to surface after a while, which is to be expected given our system and the requirement that artistes not work with labels for too long. With a new twist, Lynx Entertainment has partnered with Empire Distributions to distribute Kidi and Kuami Eugene’s works. Kidi and Kuami Eugene are still under contract with Lynx Entertainment. Tell me why, given this arrangement, they would leave Lynx Entertainment.

Introducing more artists to the system is the best way to maintain Ghana’s reputation as one of the top African music destinations. There are countless artistes in Ghana, but what supports them? In what ways is the music industry consciously grooming the next generation of Ghanaian music royalty? Without record labels, this cannot take place. We need more record labels, we need more record labels.

It’s not that easy, this is an appeal to investors and the corporate society to support the industry by investing in the creation and growth of record labels here in Ghana.


By Cyril Senason Anani||Ghana