A sold-out crowd filled the Warner Grand Theater in San Pedro, Calif., earlier this summer to celebrate the 35th anniversary of specialty record label Varese Sarabande. Among the parade of film music stars, composers Hans Zimmer and Danny Elfman lent their weight and support to the gathering of Varese’s niche customer base — fans and collectors of original soundtracks.

And while Varese is considered the gold standard of boutique soundtrack labels, it has been overtaken in its side mission of restoring and releasing archival scores for older films by several younger upstarts that make it their primary focus.

Bay Area label Intrada, founded by Douglass Fake in 1985, began by releasing contemporary soundtracks, Varese’s main business, but moved into archival releases in 1988. Today it is one of the more established and successful labels aimed at collectors, having put out highly sought-after titles such as Alan Silvestri’s “Back to the Future,” while recently negotiating deals with notoriously guarded studios Disney and Universal.

It used to be the wild west, Fake says — “studios weren’t licensing, the (musicians) union wouldn’t negotiate.” And with demand, greatly empowered by the Internet, growing for unreleased music, bootlegs and composer “promos” began selling on a black market. A handful of pioneers petitioned studios to open their vaults and negotiated with the American Federation of Musicians for more reasonable reuse fees.

Film Score Monthly epitomized the blueprint for the model most labels follow today, starting with their first release in 1996, David Shire’s funky score for the original “The Taking of Pelham One Two Three.” The process: finding old audio elements, re-mastering them for the digital medium, licensing the music, and producing limited-run CDs with historic essays and detailed music commentary. FSM released its 250th, and final, album in March.

For FSM founder Lukas Kendall, it was as much about preserving history as supplying to a niche market. “I wanted to make sure the tapes were preserved and presented correctly,” he said in 2011.

Following that model, but catering more to the “fanboy/Comic-Con crowd,” came La-La Land Records in 2002. Founded by Matt Verboys and M.V. Gerhard, the Burbank label ascended from obscure cult titles to some of collectors’ “holiest grails” from the ’80s and ’90s, from John Williams’ “Home Alone” to its fastest seller, James Horner’s “Commando.” Many labels followed suit, Gerhard says, when they realized “the people with disposable income were the ones in their 20s and 30s.”

That’s a fact bemoaned by Bruce Kimmel, who launched Kritzerland in 2005. Of his 150 album releases, Kimmel has ventured past 1980 only a few times. His purview is the “golden age” of film scores, from the early sound era into the ’70s, most recently Laurence Rosenthal’s 1962 score for “The Miracle Worker.” “A few labels glommed onto the fact that, whatever the children of the ’80s saw then was a masterpiece,” he says, “so everything in the ’80s was selling huge and selling out, and it became focused on that.”

With a crop of new competitors and ramped-up production schedules, the market has been flooded in the past few years, and sales are down for many labels. Project costs differ wildly depending on the studio, condition of source elements, and complexity of rights ownership. No one wanted to discuss their profit margins, but most labels say they need to sell around 600 albums to break even on any given release, and most albums are limited to 1,000-5,000 units.

“You make money if you sell out the thousand,” Kimmel says. “If the limited edition is 3,000 then that extra 2,000 is nothing but pure gravy.”

These caps are part of labels’ deals with the AFM and match the demand for titles, plus they drive up interest by making “limited editions.” By contrast, a popular contemporary soundtrack like Hans Zimmer’s “The Dark Knight Rises” (released on Warner Bros.’ inhouse Watertower Records) has sold 109,000 units. Song-heavy soundtracks can sell even more — Disney’s “Teen Beach Movie,” for example, has sold 129,000 units and counting.

Some see a bleak future for the small-niche labels, with the end of the compact disc in sight and the music goldmine inevitably stripped from such prolonged activity. But while a few owners share this view, most are optimistic.

Varese touts old relationships with studios and a deep catalog of scores they own licenses to in perpetuity; Intrada has an exclusive partnership with Disney that will yield a bounty for many years; and La-La Land is expanding its focus to contemporary soundtracks as well as television and videogames.

“It’s not all gloom and doom,” says Fake, who is willing to operate his own CD plant if it comes to that. “I’m a realist, but each year it’s progressively stronger for us. Most labels were started by people who are just interested in the music. We weren’t driven to make money.”