An independent record label (or "indie label") is a record label that operates without the funding of or outside major record labels. Many commercial bands and musical acts begin their careers on independent labels.
The boundaries between major and independent labels, and the definitions of each, differ from commentator to commentator. The traditional definition of a "major" record label is one that owns its own distribution channel. Some independent record labels, in particular those with successful performing artists, sign dual-release agreements (and make other deals) with major labels and may rely to some extent on international licensing deals, distribution agreements, and other arrangements with major record labels. Major labels may also wholly or partially acquire independent labels.
Other nominally "independent" labels are started (and sometimes run) by major label artists but are still owned at least in part by the major label parent. These spin-off labels are also frequently referred to as vanity labels or "boutique labels" and are intended to appease established, powerful artists and/or to give them latitude in discovering and promoting new talent.
According to Association of Independent Music (AIM) "(...) A "major" is defined in AIM's constitution as a multinational company which (together with the companies in its group) has more than 5% of the world market(s) for the sale of records and/or music videos. The majors are (currently) Sony, Warner and the Universal Music Group (which as of 2012 incorporates EMI).(...) If a major owns 50% or more of the total shares in your company, you would (usually) be owned or controlled by that major."
Independent labels have a long history of signalling developments in popular music, stretching back to the post-war period in the United States. Disputes with major labels about publishing led to a proliferation of labels specializing in country, jazz, and blues. Sun Records played an important part in the development of Rock 'n' roll as well as country, with artists such as Elvis Presley, Carl Perkins, Johnny Cash, Jerry Lee Lewis, Roy Orbison, and Charlie Rich. The independent labels usually aimed their releases at a small but devoted audience, not relying on mass sales for success, giving artists much more scope for experimentation and artistic freedom.
In the United Kingdom during the 1950s and 1960s, the major record companies EMI, Philips, and Decca had so much power that independent labels struggled to become established. Several British producers launched independent labels as outlets for their work including Joe Meek (Triumph), Andrew Oldham (Immediate), and Larry Page (Page One). Chrysalis Records, launched by Chris Wright and Terry Ellis, was perhaps the most successful from that era, and continued to expand. Several major rock stars set up their own independent labels – The Beatles with Apple Records, The Rolling Stones with Rolling Stones Records, and Elton John with The Rocket Record Company, but they generally failed as commercial ventures or were swallowed up by the majors.
No history of independent labels can be complete without reference to the most successful independent record label of all time, A&M Records. Founded in 1962 by trumpeter Herb Alpert (the A) and record promoter Jerry Moss (the M), A&M was initially the label and distributor for Alpert's own Tijuana Brass hit recordings, but the label quickly began signing other artists. Over its 37-year run, A&M sold records from such artists as Sergio Mendes & Brazil '66, Claudine Longet, The Carpenters, Phil Ochs, Carole King (A&M distributed her label, Ode), Joe Cocker, Free, Cat Stevens, Procol Harum, Humble Pie, Peter Frampton, The Police and Sting as a solo artist, Styx, Bryan Adams, Amy Grant, Suzanne Vega and Sheryl Crow. A&M was also the initial distributor of Windham Hill Records and George Harrison's Dark Horse Records. Alpert and Moss sold A&M Records to Polygram in 1989 with the caveat that Alpert and Moss would continue to manage it independently. Polygram was later bought by Universal Music Group in 1998 and A&M as a label and a brand died the next year. There is little argument that A&M's 37-year run and catalog of both commercially successful and critically revered recordings qualifies it as the most successful independent record label in history.
The punk rock era brought about a turning point for independent labels, the do-it-yourself ethos of the time seeing the emergence of a plethora of independent labels. In the US, independent labels such as Beserkley also found success with artists such as The Modern Lovers. Many of the UK labels ended up signing distribution deals with major labels to remain viable, but others retained their independence (e.g. Industrial Records, Factory Records, Warp, Ninja Tune, Wax On, BlancoMusic) and the factor that came to define independent labels was distribution, which had to be independent of the majors for records to be included in the UK Indie Chart, which was first compiled in 1980. The term 'indie' and the chart itself was unrelated to a specific genre of music, and the chart featured a diverse range of music, from punk to reggae, to MOR and mainstream pop, including several hits from the likes of Kylie Minogue and Jason Donovan on the PWL label. The late 1970s had seen the establishment of independent distribution companies such as Pinnacle and Spartan, giving independent labels an effective means of distribution without involving the majors. The situation improved further with the establishment of 'The Cartel', an association of companies such as Rough Trade Records, Backs Records, and Red Rhino, who helped to take releases from small labels and get them into the shops nationwide. The 'Indie Chart' became a major source of exposure for artists on indie labels, with the top ten singles regularly aired on the national television show The Chart Show. By the late 1980s, the major labels had identified an opportunity to break new acts via the indie chart, and began setting up subsidiary labels that were financed by the majors but distributed via the independent network, thereby being eligible for the chart. With the major labels effectively pushing the genuine indie labels out of the market, the independent chart became less significant in the early 1990s, with 'alternative' increasingly being used to describe artists, and 'indie' often used to describe a broad range of guitar-based rock and pop. The Offspring's 1994 album, Smash, is the highest selling independent record of all time. The album was certified six times platinum in the U.S and sold more than 12 million copies worldwide.
There exists a book written by Norman Schreiber, called The Scouting Party Index of Independent record labels, that covers a list of over 200 independent record labels, their signed artists, and examples of their work.