Everyone wants to get signed. There's this idea floating around that says, "If you get signed, you'll be rich and famous." WRONG. If you get signed, you sign rights to your music away. Now, if you're reading this, chances are you're either someone who REALLY wants to start a label as a business, or you're not popular enough as a performer to get signed. Either way, starting a label is a fantastic way to generate income off your music, and off the music of other artists while simultaneously getting those artists paid. Believe me, even if you're ONLY doing this to make YOUR band famous, sign other artists - it is for your own benefit. Read on for details.
Let's go through the steps. BEFORE you complete these steps, you'll have to save up a couple hundred bucks. This shouldn't be too hard. Sell your TV or Xbox 360, or get a small, part time job and you'll have the cash in no time.
Firstly, you'll want to come up with a name for your label. Despite what other people may say, it doesn't have to be catchy. It can be your last name for all anyone else cares. Your label isn't about your name, it's about what you can do for the artist and for the audience. The only thing you DO have to worry about is if anyone else has that name. Do some research, or do a WHOIS domain name look up for that name. Just make sure it's not inappropriate or anything - you don't want to turn distributors and production companies away!
Once you have a name, get yourself a business license, a business bank account, and a fictitious name statement. Doing all these things will legally allow you to do business and collect money under your business name. Taking only personal checks can seem tacky, and it's illegal to conduct business within your town without a business license. Get caught and you could receive a nasty fine.
Get a website ready to showcase any upcoming artists you sign. You'll want to sell their music from it, promote their gigs, and license music from the site.
Now, figure out what you'll offer as a label. Will you offer distribution, publishing and licensing? Are you going to book and promote shows for your artists? If you said yes to all of these - GOOD! You'll probably take off locally in no time. But, you need to know how to do these things. That's where I come in and save the day by explaining simple solutions on how to be your bands' distributor, publisher, license manager, and booker:
1. Distribution: Unless you have enough bands with enough CD's made, you probably can't do too much on your own. Consider joining CDBaby or Tunecore to get your music on Amazon, iTunes, and opt in for physical distribution as well. You won't get your band's music in Walmart any time soon - but having the option to have local record stores order your music is always a plus. If you or one of your artists gets big in any given town, you can probably sell their music there. Once your music catalog is big enough (20 Albums at LEAST) you can start doing your own distribution. One thing you can try is apply to become an iTunes contributor. If you have a Mac and have enough albums in your label's catalog, you have a good shot in working directly with iTunes - no more extra fees being taken out by CDBaby or Tunecore!
2. Publishing and Licensing: Get yourself familiar with the music biz and music law. Join a PRO like ASCAP, BMI, or SESAC as well as SoundExchange. As publisher, you'll collect royalties for music to keep, and will be responsible for distributing royalties to your artists. Being a publisher is a great thing, because your artists will sign an exclusive agreement with you allowing you to license their music out in different ways. A way to generate money as a publisher is to license music to production companies and music supervisors. Be professional and make your music easy to license, and your artist could have a song in a hit movie or TV show. If that happens, you AND your artists get royalties as well as major publicity.
3. Booking and promoting: Booking gigs is a time consuming process that requires the utmost patience. When you first start out, chances are your bands won't make a dime off their gigs, and you may even need to pay to play sometimes. Make your shows pay by selling CDs to fans. Since you're the label exec, you'll probably have plenty of time to stand next to the merch booth and sell everything. If you made yourself a good contractual agreement with your bands (which I'll go over later) you can take a SMALL percentage for yourself and give the rest to your bands. This will help cover the cost of travel, food, etc. Don't expect it to cover everything, though, always have an emergency budget for each gig.
Promoting can be just as time consuming, but it's a bit easier when you think about it. Use Facebook, Myspace, and other social networks to let fans know about the shows. Create and print flyers and posters and put them in as many shop as possible, and into the hands of local pedestrians. Contact local radio stations, let them know of the gig and request an interview. You may get a big "No" if all your bands are nobodies, but it NEVER hurts to ask. You need ALL the promotion you can get!
When you book shows or promote your gig, always be professional. Be polite over the phone, through e-mail, and if you book your gig, be polite at the venue. Make sure your bands are polite, too. If your bands are rude, or if they trash the place, you're never going to do business with that venue again.
One thing I didn't mention - as far as the services you'll offer as a label - is paying for CD's and recording. If you're just starting out, or if you don't have a ton of cash to spend, you're going to be FORCED to leave this to your bands. Overtime, however, if you become more successful, pay for CD Duplication/replication. Many bands may record their music at home, but won't have the funds to get their discs printed - so, if you've got the cash, take on the printing!
NOW, once you've decided all the services you're going to offer, you need to create a contract for all your bands to sign. This way they are LEGALLY obligated to whatever terms is written on that piece of paper. When you create your contract, here are some things you should take into account:
1. What rights will your artists sign over exclusively, and what rights will your artists sign non-exclusively?
A label will most likely sign publishing, licensing, and distribution rights exclusively - this means YOU are the only one allowed to license, publish, and distribute their music, unless under certain terms otherwise noted in your contract. For instance, you may exclusively own the rights to distribution, but you'll want to make an exception for when a band performs somewhere on their own and want to sell their music at the venue. If you don't make that exception, they can't sell their merch! Unfair! Many major labels have exclusive live performance/booking rights as well - meaning the artist can't even book their own shows. So instead, sign a NON-exclusive agreement allowing you AND the artist to book their shows. The shows YOU book, you can go to and take percentages off merch and any other revenue generated at the gig, while the artist can book their own gigs as well.
2. How are YOU going to get paid, and how will your artists get paid?
NEVER EVER EVER charge your artists to be signed. If you conduct business properly, you can agree to take 10-45 percent from different sources of income. For instance, take agree to take 15 percent from all distribution sales and live venue sales, take 10-15 percent from ticket sales/live show revenue, and take about half the overall generate royalties you get for radio play and air time (typically, there is a publisher's share and a writer's share and a license fee. You split the license fee with your artist and keep the publisher's share, give the other half of the license fee and the writer's share of the royalties to your artists.) Be sure whatever revenue is generated by your artists is divided between you and the artist in a reasonable way. Look at it his way - if an artist generates money from their music being sold or from playing a gig, they deserve the majority because they put in the hard work to make the record and perform at the gig. If a song generates money from licensing it to a production company for a tv show, it never would have happened without you - so take a slightly larger portion. However, NEVER EVER EVER EVER collect MORE than the artist. You're riding solo, you're not a major label with several different publishers, publicists, etc. Keep it fair.
3. How long will the contract last?
Your agreement MUST come to an end at some point. You can't own your artists FOREVER. If you're just starting out, make it 6months to a year MAXIMUM. This means that they're stuck with you exclusively for that period of time. So, if you're just starting out and you have an incredibly limited budget, make the agreement's lifespan short. If it's too long and you end up sucking as a label, it's your own reputation on the line.
4. How will you promote yourself?
Use this agreement to grant yourself promotional spots on CD cases and at gigs. Post a small label on the back of a CD case, or put up a banner at a gig. Let people know this band belongs to you and you're services are helping them. This will attract other bands to you, and will attract the fans to come to your show - regardless of who's playing. This means NEW fans for ALL your bands and artists!
Now that you've got your terms ready - and hopefully you've made them reasonable enough and have written them out clearly and thoroughly - it's time to sign some bands and artists! Go to local gigs or browse the web for unsigned artists near you. Work locally first, then branch out. There's no way you can benefit a band in New York if your brand new label is based in Montana, it just won't work. Get local bands and artists involved with your label, explain to them the benefits of being signed with YOU.
Starting and running a label successfully is a FULL TIME JOB. Don't think you can sit on your butt and collect money while your bands do all the dirty work. You've got some heavy responsibilities on your shoulders, so don't take it lightly! Get to work. If you work hard, be fair, and be professional about EVERYTHING, it'll all pay off.
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