Be Your Own Record Label

The gratification and potential profits to be your own record label may be more than what you think.  Especially, in terms of being able to market and sell your own music legally.  Start your own record label can be your path to make this happen!

Less than a decade ago, there was really only one way to make a living in the commercial music industry:  You honed your act, sent out demo tapes and hoped that some night while playing in a club, someone in the audience was a scout for a record label.  You'd sign a contract, get paid an advance, burn most of it renting studio time at extortionist's rates from the recording company, get an album out, hope they promoted it adequately, go out on tour to support it and inevitably hope to become wealthy.  To be your own record label was unheard of and reserved for just a few bravehearts willing to enter the field.

The reality now days for most recording artists that go this route, which get signed by a label and make a living by doing so…  if, by a living, we mean that they don't quite starve to death, and don't drown entirely in debt.  Being a musician with a record label means long hours, long tours, and royalty statements that translate into "not a lot of money for the hours put into it."  Don’t get me wrong…there are still some good major labels out there as well as independent labels, so this statement is for the one’s who are not.  Let's take a look at some more reasons to justify why you would want to be your own record label.

The old school justification for this was that pressing CDs and printing the jackets and arranging airplay on radio stations was expensive.  Record labels could justify these one-sided contracts because they put up most of the financial risk, and they acted as the gateway to people getting access to an audience.  And to be fair to them, they also had the job of sorting out all the crap from the stuff that would actually sell – every act they signed is making a bet with their investor's money…and they have no way of telling which acts are going to endure (remember Hanson, anyone?  No?  Case closed.)

Even worse, for a record label, it's very much a "What have you done for me lately?" sort of business.  Yes, there are A list platinum acts – but the vast majority of the music catalogs are filled with groups that put out anywhere from two to four albums and then vanish without a trace.  Look at how many artist are classified as being a “one hit wonder”.

On top of this, a lot of acts are so desperate to sign the contract that they sign stupid contracts, giving away control of their rights and their masters.  Only in the recording industry does this happen; in the world of freelance writing, the analogy would be that you signed a contract with a publisher, then spent most of the advance renting a specialty word processor, and gave the publisher the only reproducible copy of the work at the end of the job.

However, since roughly 2000, the creative destruction of technological advance has done a serious number on the record labels – and dropped the barrier to be your own record label into something that nearly any band with computer savvy can get into.

To be your own record label will entitle you to the legal rights to own and distribute your music.  It offers you legal protections for retaining your rights and greatly helps when it comes to tax management.  To be your own record label means you have to be a grown up and pay attention to the business side of being a music publisher.  Taking an accounting class is worth the hassle – the payoff is much greater.

The job of a record label is to promote your music and to drive sales.  It doesn't matter if it's driving sales of single track bits or of ten track platters sold as compilations, if it's promoting music and selling it, and taking in proceeds, it's doing its primary business function.

Now, in setting up to be your own record label, you're going to need to do some legwork.  First and foremost, hire an attorney, and then go talk to the Small Business Administration about classes on setting up a business plan.  These classes are free, and there are usually consultations you can get from retired professionals on how to set up and run a business without getting overwhelmed.

Next, look at venues for you to distribute your music.  By far and away, the five most important are MySpace, FaceBook, Napster, Rhapsody and the Apple iTunes store.  Fortunately, these are all easy to get listings in – and all of them are free.  You want to build up word of mouth to drive sales of songs.  One of the best tricks is to load up the middle 40 seconds of one of your tracks – something that shows your distinctive sound – but not enough to give the entire song away.  The aim is to build a hook, and to build a brand.

If you can get a couple of other artists together, you can meet the next requirement of a record label:  A regular release schedule.  It's one of the truisms of business, but if you make a product people like, people will want more of it.  Be prepared to give them more. 

My advice to be your own record label right now is to focus on the digital download markets, and then press CDs when they're needed.  Fortunately, the price of pressing CDs is coming down – indeed, for a fairly small investment, you can get a professional CD duplicator that will get you over the hump.  You won't be able to handle a million copy run, but for handling direct mail orders, you'll be set.  Start small and let the business grow naturally, and manage your capital carefully.