Yeah, this is spot on. A label is simply what we call it when a group of people involved in music get together and combine their resources. Labels provide marketing, contacts (with other musicians, with recording studios and other services musicians need), and by curating content, they help bands find their audiences and help fans provide new bands.

In fact, it's a very common thing for musicians, once they achieve some kind of success (whether financial, or in terms of their following) to start a label so that they have an organization they can use to promote acts they like.