Before streaming, the label owned the means of production (professional studios and professionals), means of distribution (Vynil, CDs etc), means of promotion (

Before streaming, the label owned the means of production (professional studios and professionals), means of distribution (Vynil, CDs etc), means of promotion (deals with radios, magazines, channels etc) and it sort of operated like a bank. So it would give lots of money upfront and the artist would sign the deal to x amount of albums to be distributed by the label (which was kept very non transparent by design, so that the artists who were not business savvy always did a bad deal. There were all kinds of other shenanigans, like underreporting sales (to pay less for the artist) etc. Today labels lost a lot of their power in distribution (Spotify, Youtube, etc), a little in recording (recording is easier) but still have the promotion power. So they operate in a similar way but with deals focused on production and promotion. So an artist with fans would make a deal with a big label to get the promotion/production power they have and the bank function. So he/she would leverage on that to become a global star betting that this will bring more money that he/she owes the label.