How to set up a record label

 

More and more labels pop up every month, and the vanish before they get noticed. So what’s the secret to getting success, beyond just having great music? Preparation and planning! Getting the key steps to launching your own record label is vital to giving the music the best platform to be heard and engaging the audience. So how do I start my own record label?

 

Working on the assumption you’re new to running a record label I’ll start with the basics…

 

1. Pick a name for the label

 

Something memorable, something that sounds good when you say it out loud to people. Maybe something that captures the kind of music, or the ethos of your new record label? And then, most importantly, check no one else is using it or anything similar - are the URLs available, are social media names available?

 

2. Get your music sorted

 

These days more and more producers are starting their own labels, if that’s you, then you’ve got this covered. If you’re not a producer then time to speak to your producer mates, industry connections or, as I did, people you’ve known for a while and pitch them the idea of the label. I had a press information sheet on the label outlining the sort of releases I’d secured, the social media strategy, the ‘about the label’ bit and that kind of thing - it helped give people I was approaching a sense of the bigger picture.

 

Once you have 3-6 releases ready and lined up it’s time to sort out the next step.

 

3. Artist deals and contracts

 

A few distribution companies can handle this for you, but if you’re looking to keep those costs to a minimum search online for examples of recording contracts and go from there. I was lucky that I knew a few people who had deals and they let me look over the contracts. The original UM Records ones were 3 pages long and full of legal speak - these days it’s a one pager that keeps it simple. You’ll need to create a contract for everyone on the label and have them sign it ahead of release - agreeing to the deal or asking questions and amending it prior to release.

 

4. Finding a distributor

 

Your distributor is going to be the gateway to retail stores and streaming sites. And the way you all get paid once music is released. There are lots to choose from, from the big guys to smaller operators. Do your research, ask people who they use, speak to them, make sure they’re right for you and the label. Ask questions about how they work, retail feature placements they’ve had recently, success stories for labels like yours - then go speak to those labels or artists and see if they live up to the pitch.

 

The distributor can then help you plan the release schedule, advise on marketing support, explain how to try and get feature placements and all sorts of things that go into making a release a success for everyone involved. Including the bistro - they only get paid if you do - so remember they work for you. Push them and do everything you can to get your release noticed - that way they’ll be more inclined to get stuck in next time out.

 

With everything in place all that remains is to get the promo out and then promote the release when it goes on general release. I’ll cover promo campaigns in another post soon, but for some tips on ‘How to promote your release online’ go here.

 

And finally, here’s some frequently asked questions on setting up your own record label:

 

How much does it cost to start a record label?

 

It doesn’t have to cost much at all, although if producers want an advance, or your graphic designer needs paying, or images buying etc. The main costs will be around mastering before release and then any paid advertising you intend to do once release. All these costs come off the net revenue before the producer is  paid so you don’t actually lose out, as long as the release gets enough streams or sales of course.

 

If you register the Label as company there will be some costs and that will vary from country to country.

 

How much do record labels take from artists?

 

Again this varies label to label. Generally speaking the after the retail store has taken their percentage and the distributor theirs, the label and the producer split the revenue 50/50. Remixers can about 25% of the revenue on tracks they’ve worked on with the original artist getting the other 25% and the label 50%. These spits differ greatly on compilations and the like. My advice is to be fair. These days there is less money in the business, so producers need a better deal.

 

Do you need a business license to start a record label?

 

My advice is to register the business. You’ll need to pay tax on earnings but best to speak with your distributor on how best to do that.