Start Own Record Label?

[Diffusion]

I have been thinking a lot about this lately, and I was just wondering what it would take to start and run my own record label. Eg, how much money to start it off, any qualifications, what kind of people I would need, how difficult, etc? Any opinions on this would be appreciated.

[grn]

The only thing you need to start a record label is a desire to release records and musicians who would like you to release their records. If you want to make a profit, you should make a business plan and maybe register as a business with your city, which is like $15 or something to incorporate. Otherwise, meet up with musicians, help them distribute and promote their albums.

[Diffusion]

Originally Posted by grn

The only thing you need to start a record label is a desire to release records and musicians who would like you to release their records. If you want to make a profit, you should make a business plan and maybe register as a business with your city, which is like $15 or something to incorporate. Otherwise, meet up with musicians, help them distribute and promote their albums.

true, but I was refering to more of a "major label", not a local label...

[peritus]

Businesses are like kids.. Even Billy Gates started out of his dorm (or the guy he ripped off did prolly).... Scratch that... Steve Jobs and Woz started Apple out of a garage...

[TroyHutson]

Originally Posted by Diffusion

true, but I was refering to more of a "major label", not a local label...

In my opinion, major labels are more of a bank than anything. They give out loans to people that fit their qualifications. They pay copious amounts of money for those people to record and release (in advances) and if that person does not meet their loan payments (i.e. record sales) they are now in debt to the record company. So, if you want to start a "major label" you should probably have at least several million in the bank to get good artists, recording studio time, and another several million for advertising. Or you can be one of the lucky ones (like sub pop) and strike with a certain genre while the iron is hot (read: lucky).

[zekthedeadcow]

I'd probably put the figure closer to a half billion dollars or more... multiple good artists and enough money to "build a partnership" with Clear Channel... you don't just "start" a major lable

[Diffusion]

Originally Posted by zekthedeadcow

I'd probably put the figure closer to a half billion dollars or more... multiple good artists and enough money to "build a partnership" with Clear Channel... you don't just "start" a major lable

And you dont just "get" half a billion dollars either. If it were that difficult Im sure there would not be many major labels today.

[peritus]

Sorry man.. You can't be serious... Look up the history of Columbia...

[grn]

there aren't many major labels... there are five. there are a ton of independent labels. if you don't have billions of dollars, you don't have a major label. you have to start off independent. it takes years of work. it will probably take at least 10 to 20 years before you reach major label status. some of these companies have been at it since the phonograph was invented.

[famous beagle]

Originally Posted by TroyHutson

In my opinion, major labels are more of a bank than anything. They give out loans to people that fit their qualifications. They pay copious amounts of money for those people to record and release (in advances) and if that person does not meet their loan payments (i.e. record sales) they are now in debt to the record company. So, if you want to start a "major label" you should probably have at least several million in the bank to get good artists, recording studio time, and another several million for advertising. Or you can be one of the lucky ones (like sub pop) and strike with a certain genre while the iron is hot (read: lucky).

This is technically true, but it sounds a little misleading.

If the record company advances you $500,000 for an album, then yes, all that money is recoupable. And you won't see a dime from it until you've recouped that $500,000. BUT ... if you don't ever recoup fully, you don't owe the label the difference. They just eat the cost.

[Diffusion]

ok, I see your points... now let me rephrase my question: What would it take to run my own successful independant label?

[pandamonk]

Knowledge, contacts, luck, more than just a question on a home recording forum. Why not try your hand at an internet record label?

[grn]

it's just a lot of work. you can do it, but you have to start extremely small. contact local artists and see if you can help them put out a record. then do consignments with local record stores and promote them. you have to invest a lot of your time and your money. you probably won't make a profit at all the first year.

[mjr]

Originally Posted by grn

it's just a lot of work. you can do it, but you have to start extremely small. contact local artists and see if you can help them put out a record. then do consignments with local record stores and promote them. you have to invest a lot of your time and your money. you probably won't make a profit at all the first year.

Here's a good article.

http://www.musicbizacademy.com/artic...tartlabel1.htm

[lexluthor]

Buy a book on it, there are lots of good ones out there. You are going to need some money though. Unless you have money to put into a band (Recording, distribution so on) there is no point (from the bands point of view) doing business. If you have the money to put out a record and be able to push it then your set. I guess maybe like $1000 for a band. Depends how far you want to go with them.

If your really serious you should look to take out a loan and shit. Get some legal advice first. Its a serious business, you cant just blag your way through and hope for the best. IF you break even your doing well. There is no money in it, most people who run indie labels do it for the love of music not the rewards.

[RAMI]

I want to start a major car company...Not a minor one. Where should I start? Any thoughts.

[peritus]

Originally Posted by RAMI

I want to start a major car company...Not a minor one. Where should I start? Any thoughts.

badass post!!!

[lexluthor]

Originally Posted by RAMI

I want to start a major car company...Not a minor one. Where should I start? Any thoughts.

Haha, exactly!

[amra]

Originally Posted by RAMI

I want to start a major car company...Not a minor one. Where should I start? Any thoughts.

Yea man, that's easy you just get your business license, then build a million or so cars the first day, and then 500,000 thousand or so every day after that. BAM! Major car maker.

[LeeRosario]

Oh god, all I can say is...


If you're ready for all the bullshit that comes with it....go for it. It's more control, but with that control comes the ability to lose control of your networking, artists and your money.

Record labels are in the business of losing money in most cases. With good managment, they stay afloat at most.

You're going to need alot of things. You need

-legal advice (a good legal team)
-funding/loans (investments and those who are going to invest in your cause)
-proper networking (which often affects your funding)
-A&R to scout out good investments (your money making artists).
-a good public relations team

-what your goals and "visions" are in terms of genre. All great companys function off a main idea. For example, Harely Davidson prides themselves off of building tough bikes and being "American made muscle". If you think about it, that's a great concept because thats the american mentality.

-What music are you going to represent? Hows the market for that music? How much do you want to start with? How much are you going to put in? For how long? Where do you see it in 5 years? 10? 20?


-Your artists and your audience. These are the most important. Without good talent you can't hope to succeed with a record label. Even more importantly, without an audience that demands that style of music, you won't make a dime of that invested money back.




So many things to consider. Trust me, in another life, I would of loved to be a record label owner. Just not my cup of tea. Good record label owners are good business people that come with a money making background. They have a knack for the music industry network.

[Adam P]

Most importantly, you'll need a band that is looking to release a record. A band with a big local following or that plays out to new audiences fairly frequently would be ideal, because its likely that they will sell more copies of a record.

You'll need a minimum of a couple thousand dollars to get the record pressed, depending on the number of copies you want to do in a run. Starting with 500 or 1000 copies might be a good point, if you think the band can sell that many.

You'll need to spend pretty much all of your waking free time working out logistics and promotion stuff. You'll want to get yourself a domain name and some cheap or free webhosting, and get yourself a nice looking (read: devoid of cheap looking fonts and/or clip art images) website. Might want to get a Myspace profile too, but I wouldn't rely solely on that. Take out ads in magazines or fanzines that cater to the style of your release. Find a friend who is inclined in the visual arts and have him come up with an attractive looking print ad for you. Offer to pay him in records or beer, or your continued business should you achieve any commercial success.

Get a vendor's license, open a bank account, and set up a Paypal account, so that kids can order copies of the record from you over the Internet. Just add a dollar to the selling cost of the record and call it postage paid.

You'll need to work out how you and the band will split the revenue from the sales of the record. Many indie labels will split the earnings 50/50, so if you sell a CD for 10 bucks, you get 5 and the band gets 5. For the band to have copies to sell at shows, sell them to the band at wholesale cost, and let them be in charge of getting rid of them at that point.

You might want to get friendly with show promoters in your region, so that you can help get the band out there playing to new crowds as often as possible, because that's going to translate into more CD sales.

Obviously you will want to release music that you think is good, but also try to get involved with something that is at least somewhat commercially viable, at least to begin with. Save the recording of the guys playing all of the music on power tools for when you have a few extra bucks to throw around. It may be avant garde, but its probably not going to put much money in your bank account, and no money means you can't afford to put out more records.

Many indie labels' first release is a compilation of various artists. This can be a good idea in a number of ways. If you can find several bands that have recorded and have extra songs that didn't make the cut of their record, they may be willing to let you release them on a compilation. Or you might be able to find a band that can scare up a couple hundred bucks to record one or two songs in a studio to put on your comp. But the more bands you have on there, the more people you have out there pushing your product, especially if the bands aren't all from the same area. If you have 10 bands on the comp, and each one is selling 15 or 20 copies of the record per show, that's exponentially better than just one band selling 15 or 20 copies per show.

Once you've made your money back and a little extra, find another band and release another record. This probably won't happen right away. It could be as much as a year down the road. However, with the networking and promotional possibilites made possible by the Internet it probably won't be horrendously difficult to find a market for whatever it is you're releasing.

Have a lot of time to invest in the project. I've heard stories of guys that own successful indie labels who would come home after work every day and assemble 7" record sleeves and stuff envelopes with mail orders or promo kits to send to radio stations and record reviewers and do stuff like that until they go to bed at 3 or 4 in the morning.

If you can find the right band or artist, it can pay off quite well. Look what Dashboard Confessional did for Vagrant Records, or The All-American Rejects did for Doghouse records...they made them a lot of money. Hell, Doghouse wasn't going to sign All-American Rejects, but the owner's 15 year old sister-in-law took their demo to school after he'd thrown it out, and convinced him to sign them after telling him how all of her friends at school thought it was great. Dreamworks ended up buying out their contract. Now, the chances of something that huge coming your way are quite slim, but I would never say that its impossible. There are always great bands out there that no one's ever heard of. Who's to say you won't be the person that stumbles across one?

The DIY/independent music community is one of the most amazing testaments to the ambition and tenacity of inspired, motivated people that I can think of.

[Thunder33]

Originally Posted by Diffusion

ok, I see your points... now let me rephrase my question: What would it take to run my own successful independant label?

The first thing you need is a good entertainment lawyer. Or a staff of them. Then you need to get connections in publishing, distribution, and public relations. Then you hire A&R reps to find the best bands who will make your money back for you. Then you try to hold it all together for more than a year.

Yeah, there is more to it, but that is just an outline. Take it from someone who was once signed to an independent label.....there is a LOT of bullshit involved. One little slip up and you are done and any bands that you have on your label are high and dry. Even if they are out on the road when you go tits up.

[JoeBannon]

I started a private label here in Dallas. Makes me about $200K a year, almost all of it profit.

Originally Posted by grn

The only thing you need to start a record label is a desire to release records and musicians who would like you to release their records. If you want to make a profit, you should make a business plan and maybe register as a business with your city, which is like $15 or something to incorporate. Otherwise, meet up with musicians, help them distribute and promote their albums.

You incorporate with the state. A "DBA" is for the county or city. Here in Texas it's about $550, in DE it's about $100.

[kurtteej]

The biggest thing for you to do is to get a legal ally in your quest. You will need some money to run an office and to put money out for things like CD replication, artwork, production, etc. but in a royalty environment you'll need more legal advise than you'll need money.

[Bloodsoaked]

Originally Posted by Diffusion

I have been thinking a lot about this lately, and I was just wondering what it would take to start and run my own record label. Eg, how much money to start it off, any qualifications, what kind of people I would need, how difficult, etc? Any opinions on this would be appreciated.

Starting a lable is very easy. Keeping it going is the hard part.

I ran a Death Metal lable (Bloodsoaked Records) for about 2 years and released 3 CDs from 3 different bands. I also started my own distro at the same time. It jsut became to much work and I lost the enjoyment in it and that is why I gave it up. If you have the drive I say go for it. It is not that hard at all and can be allot of fun. Let me know if you have any questions...

Peter