Once players have earned enough through band management (Busking, Gigging, Singles & Albums), they can purchase a Record Label.
Owning a Record Label kicks off a whole new game loop - this is a game loop that is deeply social (all the relationships with bands signed to the label must be actively managed by the label owner), deeply engaging (Record Labels can take the place of all the game-owned facilities and therefore require a lot of attention) and deeply lucrative (a fully-loaded Record Label with the max number of bands signed to it can generate significant income for the owner - but it will also take significant investment to get there).
The facilities that a Record Label can offer the bands signed to it can replace all of the game-owned facilities, including the Recording Studio and Promoting, as well as allowing for genre-specialization. For example, a Record Label may choose to become the pre-eminent Dance music label, providing boosts to bands in the Dance music genre, and thereby becoming a magnet for Dance music bands. A Record Label could also choose to remain genre-agnostic, meaning it can attract bands across all genres.
Each facility that is a part of the Record Label can be upgraded by the player - for a cost, of course. The higher the level of the facilities (e.g. Recording Studio) the bigger the boost to gameplay, and the more attractive & interesting the Record Label will be to top bands.
Record Label owners should consider their facilities upgrade strategy - should you upgrade the Recording Studio all the way to level 10 first, and then tackle other facilities, or would it be better to be upgrade every facility at the same pace?
Independent bands can apply to Record Labels, and Record Labels can proactively reach out to bands they would like to sign. The negotiation between band and label is completely up to the players - some Record Labels may choose to publish a standard set of terms that all bands will be subject to, others may choose to publicize that they are prepared to negotiate every single contract individually. There is no right or wrong way to do it.
Once a band is signed to a Record Label, it gets to use all the Record Label facilities (up to the level they have been upgraded to by the owner) for "free," and in return, the band will give up a % Cut of their earnings to the Record Label, as negotiated by the players.
Record Label owners and band managers will need to engage in a dialogue - for example, if a band manager believes they might have a potential #1 hit with one of their bands, they might reach out to the Record Label owner to ask them to reserve a period of Promotion at the highest level for that song. Or a Record Label owner might proactively notice that a song by one of the bands signed to the label looks promising, and decide to promote it of their own accord.
Each Record Label has a maximum number of bands it can sign, depending on the level of the facilities.