> Artists do not need to sign with them.

Anymore.

People resent record labels for the past, when signing with them was practically the only option, and the terms of the contract were cryptic and frequently misunderstood by signers. When artists were promised 15% royalties, cryptic "breakage" fees and other deductions brought that number closer to 5%, and forced the artist to incur costs such as tours, concerts and marketing, leaving the record labels only responsible to print records.