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how to start a record label 101

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  • how to start a record label 101

    sorry if this is an old topic, I did a search and came up with nothing.

    anyway, i'm curious if any of you have your own record labels? once again I had a moment where I was thinking out loud to myself and thought how nice it might be to have my own label putting out strictly 7" releases, kinda like Freddy Fresh's "Howlin' Records", "7 Hills" or "Bully Records". I know, easier said than done right?

    I guess I was more curious about the business side of things when releasing 7" releases. according to the Bully Records site all the artists keep their masters, so who really makes the money? how are the costs split between artist and label? Is money handed out on a royalty basis?

    I was reading some of the other threads on vinyl pressing and found it very informative. is there anything else I should know?

    also, how difficult is it to get an artist interested in releasing music on your label? let's say it's someone that's kinda well known in the UK but is virtually unknown in the US. I suppose the only incentive anyone could offer is more exposure here, but this isn't guaranteed.

  • #2
    Not everyone owns their masters. In fact, very few do. It's between you and the label, although obviously it ebenfits the label if THEY own the masters just as it benefits the artist if S/HE owns the masters.

    Many producers these days would be looking to license a track (or album) to a particular label for a set period of time, usually between 3 and 7 years. Most labels would want to license it exclusively, which means the artist can't then go and sell it again to someone else. The label would also want to retain third party licensing rights, too, which means, if someone wants to put a track from their album on a compilation, they would have to license it from the label.

    The standard artist contract would be exclusive, for anywhere up to seven years and would be for the world, although if you are in a strong position as an artist it's in your interest to do separate territory deals with different labels rather than one deal with one label for the world. But all of this is negotiable. A deal is whatever you can get, basically, whether you're artist or label.

    If you sign for a major, for example, you'll come under a lot of pressure to sign for the world. These days majors get quite indignant that artists might want to retain their masters. They've had it their way far too long.

    If you wanted to released a tune by Artist X from the UK and you are a label-owner in the US, you would probably have to approach the label rather than the artist.

    If you want a good overview of the history of the music business, you could do worse than check out Louis Barfe's excellent Where Have All The Good Times Gone? For a good music business book, anything by Donald Passman is recommended.
    http://www.djhistory.com

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    • #3
      Hope these thoughts are of use to you

      The big question you should ask yourself is whether or not you want to do it legit and by the book?

      You can self distribute it...press it up yourself and come to a shaken hands arrangement with the artists...for example...you put up the money for the track to be recorded...you take the costs of distibution and pressing the thing and offer them a cut of what you can sell...the trouble is with 7"s is that there isnt much profit margin...

      Imagine you press up 500 copies...which excluding covers (stick to a plain white one you can customise yourself using inks/stamps/whatever) would cost around 6 to 7 hundred sterling...it maybe cheaper in your neck of the woods....then put up the costs of recording and actually physically taking round your product to shops....then ask yourself what's the most someone would actually pay for your 7"....then take from that the cut that the shops will take...usual mark up for shops is about 1.8% so if they sold it for say 5 dollars they'd want maybe two dollars 35 cents for each one....plus most shops deal in sale or return so you have to wait along time to re-coop a little bit of the money....add to this promotional costs...and postage etc there isnt much else and thats doing it yourself....imagine how much a cut the distributers would take if you used them? Or if you had to pay to sign contracts etc

      The key thing here is trust...look at Howling Records....it helps the Freddie has a great rep already and has his own releases...combine the fact that he scouts artists from all over the world...a few of my friends in Leeds and Hudderfield have tracks out on his label....plus the fact that the artists are not generally well known at all (some even just sent him demo's and he released them) makes it easy to see why artists do benefit from having releases on Howling...and like you said earlier...this includes the exposure elsewhere in the world....most unknown artists would jump at the chance....as long as artists know the score and you are straight up and honest about things with them they will trust you...be transparent about what you will gain from them....make sure they know that you will be barely breaking even...you'd be suprised about how much in trust bands will give you...as long as they are not being ripped off,then someone like you who obviously won't do that and has the added bonus of not being part of the evil industry has a good chance of literally being able to come across an artist/band or track you like and convincing them through sheer enthusiasm and love of music to join you in your labels vision...

      Have a clear plan of how much you would need to sell to break even...work out a network of contacts...record shops who are likely to be able sell your product...dj's who'd play it...websites and magazines who'll hype it and think hard and deep about the practical....at the end of the day you really do have to have a great product to sell when all's said and done so the buck stops at you and your taste.....NEVER put out anything that doesnt make,not only your cut and impeccable tastes but also your respected friends too....make sure you play the two tracks to everyone you know to see what their opinion is first...and don't mention that you have anything to do with them either or everyone will most likely say yes it's brilliant when really they don't want to hurt your feelings....

      Things that are important to think of once you do get a couple of killer cuts are the importance of production...and whether or not the pressing plant will translate it properly...make sure you have heard releases that you know have been pressed up at the plant and judge for yourself...also of KEY importance is the loudness of the pressing,you want it LOUD but not distorting...make sure you pay a little extra (more money I know ) for test pressings...it's well worth it in the long run and can save you getting stuck with a bunch of quietly pressed flat sounding turkeys....

      Contracts.....ah this is a tricky one.....you should own the rights to the recordings you paid for but have an agreement with the band that they take a share of the profits if you end up licencing it out to compilations...make sure the artists know that YOU own the rights to the recording...make this very clear....they can own any of the writing credits etc that's nothing to worry about but if you own the recording then it's up to you what you do with it...whether you press up an extra ten or ten million is up to you....
      Let the artists have a percentage deal on EVERY record sold and any money coming from you licencing the track out too...it's only fair but make sure the artists have realistic expectations on what they will get monetarily and the timescale....remember it could take you over a year to sell 500 7's.... if you manage to sell them all which realistically if you are doing this as a independant operator then is gonna be hard unless you've got one hell of a well recorded,well hyped slab of wax....

      Worry about the proper legal stuff like paying taxes etc if you manage to get big enough to be on the radar...same goes for distribution....they should approach you eventually...forget all the worldwide distribution bollocks....if you do it independantly you have,with the aid of the postal service, to get them anywhere on the planet.....

      An important thing is to really know where you want to put your stock....there's no point in having copies in any old shop...SPECIALISE ...some shops may be able to get rid of loads of copies if it's a red hot track...and making sure it's in only certain good record shops gives you great kudos....also you have a great advantage that you can play to your favour....the fact that it's limited and hard to get means that if it's good people will search it out creating the hype for you...you could perhaps hoard 50 or so to sell on yourself at full price....but don't try and cut out shops because they count more than anything in getting your label known and on the playing field....be loyal to the shops with your forthcoming releases making sure that they get rewarded for selling your 7's,making sure they have promo's to play and give out to there regular djing clientelle can make all the difference,as can making sure that they are one of the exclusive shops in that area(there's no point giving them to every shop in the area) in doing this you not only make them feel all nice inside but you bring them extra custom and cool points which is important...if they run out and want more copies and you have some then try to reply to them ASAP because they'll remember things like that...and more importantly so will their customers.....

      As far as hype goes i'd say the most important thing it to have good record shops take care of it...if they like the seven they will be shouting it from the rooftops and recommending it to ALL their regulars...which importantly will include DJ's and evangalistic vinyl freaks.....DONT try and hype the record yourself...let the music do the talking...there's nothing more pathetic then watching someone go on about how good a record is when they've actually released it themselves.... If you do a press release then make it very short and sweet...if you have any friends in the business that could possibly help in anyway shape or form...i.e Dj's who'll play it,Journo's who'll review it, famous people who you can quote etc etc then now's the time to call in those favours....forget flyers or posters...just make sure everything you do with the release is relevant...there's no point sending out loads of copies to every magazine and website going....think about whether or not they have actually reviewed an independant 7 before....most big magazines are paid a mint just to review something from big labels who already advertise with them so you won't have much chance will you...(unless one of you friends who wrks for said magazine happens to like your release and you pull that favour in he or she owes you)...if you think of say....all the sites you use to do with your passion for music...plus the same goes for magazines....how do you learn about new releases?who put you onto new music? and most importantly what makes you want to buy a slab of wax?Is it because you've heard it via soundsite...a journalist you trust has written a glowing review...a mag you like gives it a great review...or did you hear it on the radio...out in a club...did your friend recommend it or that nice man behind the counter in your favourite record shop tell you about it?

      As long as you play things right...don't go off half cocked....be transparent with the business side of things...be realistic....have a shit hot first release...and a great pressing....and you can afford to lay out alot of money then you have a chance of getting your own label off the ground....just concentrate on that first release....for future reference if you do things right then you will have a massive bargining chip when asking others to contribute a track or two....soon you'll have artists contacting(begging) you to release stuff....remember though that the cliche about the buck stops at you is very relevant here....after all....it's your taste in music that will hopefully come across

      Anyway i hope this rant is of use to you....GOODLUCK...i wish you all the very best and i expect a free copy of your first 7"
      Last edited by Shiftless When Idle; 24-04-2005, 03:37 PM.
      Country be dyin like poor people do
      Hospitals be closing...doors to me and you (Lopazz - Blood)

      And here's some other stuff that i get up to...

      https://www.facebook.com/pages/Serio...796469?fref=ts

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      • #4
        thanks to both of you for the helpful advice. since I know nothing about the business end of owning and maintaining a record company I'm finding everything said here quite useful. as you mentioned, I'd be lucky if I broke even with production/distro costs but the key seems to be 1)releasing a quality song(s) 2)making sure the tracks sound decent 3)establishing the right contacts and 4)trust. I know for a fact that Freddy Fresh goes to practically every record store in Minneapolis/St.Paul and sells his 7" releases to them (I live in St Paul), I buy them whenever I can. so obviously he's got a reputation locally (as well as internationally) that works to his advantage. I've considered approaching a friend of mine who works at a record store here and thought i'd ask him if he'd want to be a business partner to help shoulder the costs, but he probably doesn't make much money as a record store clerk so I'm not sure if he'd be able to front any money for production costs. either way, he's a fellow hip hop/breaks/funk head like myself and is very much into the music scene.

        I found this DIY site called indiecentre.com which seems pretty helpful. I've also came across several other random sites that talk about getting a label off the ground. is it customary for labels to give pressings to their artist to sell at their shows?

        anyway, I'm gonna do some more research on vinyl pressing and try to get a more in-depth look at the business side of things. muchos gracias for the info!!!

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        • #5
          Originally posted by mech1
          is it customary for labels to give pressings to their artist to sell at their shows?
          !
          Usually if the artist is not well known then it's highly likely that they have pressed them up themselves...or if it's a big artist then it's the label running the merchandise stall....some DIY labels actually pay their artists in records...which obviously can be beneficial....but usually that comes from a punk rock ethos....

          I just thought about getting hold of the self financed first People Under the Stairs LP on vinyl....i got it over here thanks to a dealer who regularly goes over to the states and approaches small labels with the intention of buying up perhaps 100 copies of and selling them on to UK shops like Mr Bongo's,Fat City etc who are all great for exclusives and are prepared to pay more for them (import prices)...it felt great to have such a brilliant album that i could sell in the shop where i worked....and it was easy to persuade my regulars to pay double for such a good import...that's how you can make it work for you....give people something they can't get hold of....that is actually worth it That was years ago but i still know the guy for future reference...
          Last edited by Shiftless When Idle; 24-04-2005, 04:02 PM.
          Country be dyin like poor people do
          Hospitals be closing...doors to me and you (Lopazz - Blood)

          And here's some other stuff that i get up to...

          https://www.facebook.com/pages/Serio...796469?fref=ts

          Comment


          • #6
            Some excellent advice given above that I probably can't really add to, but feel free to drop me a line if you think I might be able to answer any specific questions ...

            It might be worth signing up and having a look at The Turntable Network

            Perhaps a bit UK centric, but although there haven't been many posts since it was first put up, there are many useful bits of info, and recommendations on companies, pressing plants / distributors etc that you might be looking at working with ...

            Good luck with it all anyway!
            FunkyDown
            Facebook | Mixcloud | Soundcloud

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            • #7
              Just set one up myself, first release coming in summer.

              The band recorded it themselves (helps having a bloody talented producer and a bloody talented engineer as members), I do the legwork to put it out. No-one expects any money, just adulation.

              It helps that I don't just like the song, I blooming well BELIEVE in the band and, helpfully, in the others that are going to release things. Also helps - I think - that the band have both a really good reputation and a lot of press from their two previous releases. Oh, and I'd say that as well as the band trusting you, you have to trust the band.
              Mixes, compilations and the like

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