A music label is a brand or trademark of music recordings and videos. At its core, music labels own monetized music for profit. Sometimes, a record label is a publishing company that manages such brands and trademarks' production, manufacture, distribution, marketing, promotion, and copyright enforcement for sound recordings and music videos. These types of companies also conduct talent scouting, artist development, and contract management with recording artists and their managers.
However, it is essential to know that there is a clear distinction between a music label and a publishing company. Music currently earns money in the following ways, sales, licensing, and digital performance royalties. Sales are when an artist sells a physical copy of their music (i.e., Vinyl) or a digital copy (i.e., MP3 or Wav file). Licensing is the sale of a right to use a master, known as the master use license. Digital performance royalties are income generated from the use of a patent (i.e., income made from music streaming). A music label owns the collection of songs, masters, and patents, and a publisher figures out how to monetize the collections.
Within the mainstream music industry, recording artists have usually relied upon music labels to broaden their consumer base, market their albums, and promote their singles on streaming services, radio, and television. This reliance is due to major music labels' industry connections with publishers, platforms, and artists. Music labels also have the capital to provide seed funding for songs and their recordings.