Recording companies often invest a lot of time and money in discovering new talent or developing the talent of artists already under contract. The association of the brand with the artists helps define the image of both the brand and the artist.

Although both parties need each other to survive, the relationship between record labels and artists can be a difficult one. Many artists have had albums altered or censored in some way by the labels before they are released -- songs being edited, artwork or titles being changed, etc. Record labels generally do this because they believe that the album will sell better if the changes are made. Often the record label's decisions are correct ones from a commercial perspective, but this typically frustrates the artist who feels that their artwork is being destroyed.

In the early days of the recording industry, record labels were absolutely necessary for the success of any artist. The first goal of any new artist or band was to get signed to a contract as soon as possible. In the 1940s, 1950s and 1960s, many artists were so desperate to sign a contract with a record company that they usually ended up signing a bad contract, sometimes giving away the rights to their music in the process. Entertainment lawyers are used by some to look over any contract before it is signed.