I want to start a record label for unknown artists Is there anything I should know? Where can…?
Question by encroach Ramos: I want to start a record label for unknown artists Is there anything I should know? Where can…?
…I get legal contracts?
Yes I want to keep it really simple…. But as the owner of the record label I need to secure the name of it and what would be my duties as record label owner besides finding great talent and getting them to sign contracts. Is 25% alot to ask of record sales? I am not their manager but is a 5 year contract too much? or too little am I suppossed to pay them money to sign or a % of record sales? As record label head what would they expect me to do for them?
Best answer:
Answer by brumal
I think you are thinking a little too big. Follow the link for a nice description of some of the things that you need to think about when starting an indie label (it describes RAP, but applies equally to other forms of music). What it really amounts to is what you and the artists actually agree to in writing. To answer your questions:
(1) Follow the link for contracts [see (2) below]
(2) Unless you are paying for the studio time, 25% is way too much. Expect to get back expenses and a small slice off the top.
(3) A five year contract is also ridiculous. Think 1-2 years or per release. Do your job, and they will stay with you until you can get them to a real label.
(4) Sad but true, but In all likelihood there won’t be that much money. If you can make a small profit off each artist, you are doing good. If you get good talent, the real money will come when a major label “buys the artist.”
(5) It depends upon your agreements, but were it me, it would go something like this. The band gives you a copy of the finished masters and artwork. Your job is to get quality printing and discs made. You assemble finished discs. You go to the shows, or hire somebody to work merch tables. You are responsible for getting the discs out wherever you can (CDBaby, iTunes, maybe other indie distributors, your own web site). Should there ever become any issues with mechanical rights (say a TV show hears the tune and wants to use it), then you handle those negotiations. Since your distribution and radio clout is nonexistent, you are basically being paid for clerical skills and ensuring high quality product is there when its needed.
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The most important pieces of the “starting a label” page are outlined below.
2. Look over some sample music business contracts. See our downloadable contract forms to start. Begin thinking about what kind of deals and contracts you want to have with your artists. Most traditional record contracts are not artist friendly, so a lot of indie labels come up with new contracts that are more equitable to both artist and label. Some grassroots labels operate successfully with contracts written on brown paper bags, and some operate without ANY contracts (not recommended, but it is being done.)
3. Jump in and learn as much as you can about the music business. One unique thing about this business is that you usually need to get your hands dirty and get a street education. Here are some of the things you’re going to need to know about:
· Distribution – the success of any label depends on the distributor relationships they have set up
· Rights and Royalties – mechanical rights, publishing, sales royalties – all of these are important in operating a label.
· Production and Manufacturing – you’ll need to know about great studios, mastering, graphics, and CD manufacturing.
· Promotions – radio and print promotions, appearances, and other chances to get the label’s bands in front of the public.
· Accounting – you’ll need to keep good records, so get started early. Consider buying an accounting software like QuikBooks. It is the label’s responsibility to keep track of record sales and pay the artist royalties, so keep your records squeaky clean.
4. Consider getting a UPC Barcode – these cost $ 500 now (See http://www.uc-council.org/), but you can release up to 10,000 different records with one number. If you only have one artist, the barcode may not be an absolute necessity, but with two or more, it will be worth it to have your own UPC code. Barcodes are a way of tracking your label’s sales electronically, so if you use a “rented” barcode from your CD manufacturing company, there is more effort involved in getting your sales credited to your label. (See “Do You Need A Barcode?”)
5. Set up a separate bank account for your business. Depending on the type of business, you may even be able to use a low cost personal account to do this. It will be MUCH easier to keep records for your business with separate accounts.
6. Get a website for the label and setup online sales ability. It is the cheapest way to distribute. You will probably want to accept credit cards. For that, you need a Merchant Account. Try calling your bank first, as they usually have better deals for credit card processing. Some banks, though, won’t give merchant accounts to home-based businesses. There are many new options online to accept credit cards that are more friendly to small business.
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