Starting An Independent Record Label

One explanation is that music has been proven to affect people’s emotions. Media and businesses use music to influence our moods and habits. You probably even have some or your own favorite music to suit certain situations: workout music, driving music, “mood music,” etc.

However, before music can have an impact, the artist who creates it needs an audience. For the artist to have success in the music business, his or her audience must pay to hear the music, either in recorded form or in a live performance. Enter the record label. As the head of a label, your ultimate goal will be to find a paying audience for the records you release.

But before you get started, realize that your path and goals in the music industry probably will change over time, and that simply knowing the way doesn’t guarantee you’ll reach your destination. The level of success your label achieves will be based on many factors. Some, such as desire, goals, dedication and perseverance, you can control. Others, such as musical trends, consumer buying habits, the economy, and just blind luck, are beyond your control.

Even under the best conditions, it takes years to build a successful record label. At any point along the way, outside factors might require you to change direction. This is not to say you can’t achieve your goals. You just need to be prepared to alter your course and adapt to shifting trends and circumstances.

Your first assignment is to learn about the music business. It’s not enough to know how a record label operates. You also need to understand how different aspects of the music industry affect record companies. Many people believe they know good music and can spot talent, and that therefore, they’re ready to start a record label. However, there is much more than this to the business of owning a label. To succeed, you need to know how to sell records.

Most successful independent labels are established by record executives with many years of experience in the industry. Some are started by former recording artists, and others by people who simply have a passion for music. If you’re part of this last group, you’ll have to make up for your lack of experience by learning as much as you can about the music industry.

Second, you have to learn what it takes to set up and run a record company. There are several ways to organize a business; you’ll need to determine which one is right for your label. Then, there are city, state and federal governmental requirements to meet. Also, it’s critical to acquire—very early on—the music contracts needed to operate your record label. Finally, even if you keep your label small and simple, you’ll have to address issues of funding, bookkeeping, accounting, office supplies, and employees.

Your third assignment is one of the biggest challenges for any record label. You must be able to identify marketable talent and know where to find it. As a smaller label with limited resources, you won’t be able to attract fully developed artists. Instead, you almost certainly will be working with lesser developed artists who or those with raw, unpolished talent. That’s fine. You aren’t running a major record label, and an important part of your job as an independent is to serve as a development tool for artists. You’ll have to decide how best to use your time, money and energy to develop raw talent into skilled recording and live performing artists. And of course, you have to know where and how to find talented artists.

Fourth, you must understand the primary steps involved in making your product (CDs, records, tapes, etc.): recording, manufacturing, and packaging. It’s crucial to have a good working knowledge of the recording process, which will help you to get the best recording for your money and to avoid potentially expensive pitfalls. The right studio, preferably one with experienced professionals or at least a talented producer, can help to stretch your resources and allow you to put out an excellent product, even if you don’t have a lot of money.

After the recording is completed, you have to know how to package your product. Packaging includes creating and printing the artwork to be inserted into the plastic CD/cassette case and printed onto the compact disc or cassette itself. Packaging also includes having the compact discs/cassettes manufactured to fit into their plastic cases. The final manufactured CD or cassette should look and sound good so buyers will be satisfied with it. Remember, your name will be on your product. As with any other business, if you hope to survive and grow as a record label, you’ll need to make quality products.

Finally, you’ll need to understand and master the single most important task for any record label: marketing and promotion. It does not matter how talented your label’s artists are, or how great your products look and sound. If you don’t inform the public about your products and provide an opportunity for people to buy them, your label won’t have any sales and you won’t be in business for very long. Before signing or recording your first artist, do some research about the marketing, promotion, and distribution options available to your label. I discuss this in detail in the section, Marketing and Distribution.

Successful independent label owners understand that their labels are businesses and treat them as such. They take a methodical, careful approach to the music industry and appreciate the value of building their business one step at a time. Not coincidentally, their labels also tend to be the ones that last the longest. These record companies recognize that success and longevity come not with being the biggest, but with being the best. If you seek to establish a quality and long-lasting label of your own, follow their example.

To read more about starting your own label, check out my e-book titled Music Business Made Simple: Guide To Starting An Independent Label.