How To Start A Record Label

In nowadays’ new music industry environment, and since digital distribution made it easier to have music available for sale (or stream) online, many artists feel the need to start their own business. We give you a few tips on how to start a record label.

A record label is a company.

First you need a business plan, but also potential funding sources in order to make your business sustainable, and (possibly) succesful.

Then you will have to figure out what your overall strategy is: will you release your own material only? Or are you ready to operate as a “real” label, releasing material from other artists/bands?

What kind of deals will you offer to these artists? Recording contracts (where your label would have to cover all recording and manufacturing costs, and everything basically) or only license deals (also referred as “P&D” deals), or maybe both? What about only focusing on distribution?

These are important aspects of the business you will need to master before starting your label. You may not have the resources to hire (expensive) lawyers or legal advisors, so these are the kind of things you need to learn and manage on your own. Also make to sure to understand the implications of all deal types in terms of rights (who owns the master, who owns the publishing, etc.)

Another strategy could be to operate a “digital-only” label, meaning without any physical releases at all. There are more and more label owners who take that route, but the success of this strategy will depend on the music genre and the audience mainly. It is advised to never completely neglect the option of releasing physical records.

Let’s say you start by releasing a band’s material digitally only, and this band (or artist) becomes somehow succesful, gets some press and good reviews. The demand for physical records will emerge quicker than you think. First ones to ask for records will be radio stations, loads of radios still use physical records, you’d be surprised!

Get ready to press at least some promo / sampler CDs for radio stations, press, etc. Yes we are in a digital age, but for some reason they will still ask for CDs (maybe it just reassures them?).

These are some very (very) basic questions and steps to go over when building your record label project, there are many many more items to cover, stay tuned to the blog to find out more soon!

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