How to Start a Record Lable - Indie Label Contracts - Framework and Artist Deals

Once you know the music you want to release, you will need to set up a deal with the artists. One of the best thing about indie labels is that you can essentially have any kind of deal you want. In fact, it makes life a lot easier when you create a deal that works for you and the artist on a case by case basis. Having said that, it is a good idea to know your limitations and to have some basic principles in mind. Here are some things you'll need to think about:

• Do you want musicians to deliver a master, or will you go in on recording costs?
• Will you be paying advances, and if so, how much? (If you have a very small budget, your best bet is to try and convince your potential signings to keep any advance small so there is money left to promote their release.)
• How will any earnings from releases be divided up? Will your artists get a percentage, or will you split things 50/50? Will the label recoup manufacturing costs and promotional costs before paying?
• Will the artists get to approve promotional expenditures over a certain amount? If so, how much?
• How many promos/free copies will the artist get? Over that limit, how much will they pay for additional copies?
• What is the length of the deal?
• Is the deal for just one album or several?
• Will the musicians be entitled to audit your books? How often, and what kind of notice do they need to give?
  
  

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How to Sell Your Music Online Independently

Two aspects that have developed recently have created a dramatic shift in the way music is distributed: the first is the falling costs of music production equipment and software, allowing many more individuals to become involved with making music, and the second is the increasing ability and range of the internet.

These simultaneous changes have virtually destroyed the old plan where you had to be on a major record label to have your music distributed or even recorded. Now many people are producing their own professional music independently, and this article will talk about how those same people should be able to distribute it on their own as well.

Thanks to the demand caused by the rising number of independent music artists and their desire to sell music online, several websites have risen to support this market, but before you consider any of them, there is one thing you need to think about first.

Any music you sell online independently must be copyrighted to ensure that you have legal ownership of it. You can copyright your music online with the federal US government by filling out a form and sending them a sample of your music. It will cost a small fee, but you will then have full legal control of your music and this will help you if someone tries to use it or sell it without your permission.

Now that your music is ready to be sold online without worry of legal issues, you can start looking at the different sites to see which one would fit you best. For most cases, the best first place to look will be CD Baby.

This site allows users to sell hardcopy albums or digital downloads of their music, and can even get your music listed on itunes. It will cost some money to get this all set up, but it is a reasonable fee and with some good online music promotion, you should have no trouble making a profit. Many well known artists sell their music on CD Baby so it has a very well established reputation.

Another option besides selling you music on some other site is to sell it from your own website. This will benefit you in that you will keep all of the profits and not have to pay a setup fee, but it will require much more work out of you to get an online store operating on your site. If the store breaks down for some reason it will also be you that has to spend time fixing it.

Another disadvantage to this is that your site will not get the added traffic that CD Baby receives through search engines and other artists. This means that you will have to be even more adept at online music marketing and promotion. However, for certain individuals, it makes sense to use your own site if you know how to set up an online store and you want the satisfaction of doing it all on your own.

These are just a few of the ways you can sell your music online. Make sure that before you commit to anything you research everything in depth and find out what works best for you. With some great music, and a little bit of promotion and marketing, every musician should be able to make a profit with their work online.

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Website Design for Musicians

It would be wise for any musician to take full advantage of the promotional and marketing power that the internet can have, and in order to do this, you need a website. True, you can have MySpace accounts and pages on other similar sites, but there is something more legitimate and professional about having your own site. This article will show how any musician can design their own website to feature, promote, and even sell their music.

The first thing that you need for a music website is a domain name, provided that you already have some hosting to put it on. It would be a good idea to try and get a domain name that is, or is close to your own name, or whatever name you or your musical group go by. This will help with search engine rankings later on.

Once you have a domain to locate the site, you will need some sort of content management system. The days of putting together websites one page at a time are over, now there are free software programs like Wordpress that will allow you to create professional looking websites that can be updated easily even by people who are not familiar with website design.

A Wordpress setup will let you choose the name of your site, and again, it should be the name of your musical group or your name as a musician. You want people to be able to search for your name on an engine and find you as one of the first results, and this will help with that.

There should be plenty of themes you can choose from for the look of your site, and with some modification, you can have one that is basically unique. You should try to modify it a little bit because that will make it look more professional.

The most important thing on a music website will be to have samples of your music in an easy to access part of the site. You want people to be able to listen to your music right away, as that is what they are there for. As a secondary feature, you can add in all the text and pictures you want to complete the information available about you.

These days, having your own website is easier than ever, and there is no reason not to have one if you are a musician. They are the best way to promote yourself and they allow you access to the world music market. The internet should continue to connect musicians to their fans around the world and keep growing with time. Make sure that you are a part of it.

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Musical Opportunity in New Digital Media

Something very beneficial to all composers and makers of music has been going on as of late. The combination of the internet and decreasing costs of producing various forms of digital media has given rise to whole new areas of demand for music. This is obviously a good thing for the people who make it, but it does not necessarily mean that they will be able to find work and make a living by their art all of the sudden.

New art forms like web videos, visual music, video comics, flash animations, and so on all need music to complete their effects. Composers and producers should be able to step in and fill this void, but there are a few things working against them along with all of these benefits.

One major point is that as it has become more practical to make high quality music on your own, the number of musicians out there has also risen. This means that composers who want to get their music in films or videos face more competition.

It is also a challenge for those composers to become known to the people who need the music. With so many people producing so many types of media, making the right connections can be daunting.

Sites such as thing one can help with these facts, and over time, it should become easier to deal with these problems. In the general sense, it cannot be seen as a bad thing that there is so much more demand for music out there, and more ways of fulfilling that demand should appear.

As things progress, video content and other forms of media that make their way online with continue to require music, this means that composers may find themselves more and more in need if they can master some basic marketing techniques and make their name stand out enough to be seen.

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How to Start a Record Label: Find Your Music

For most people starting record labels, the idea to get a label going in the first place came from hearing some great music that no one else was putting out. If that's the case for you, fantastic - move on to the next step. If you just have the idea for the label and need some music to get going, now is the time. You will need to have a release - or even a few releases - lined up to move on to the next steps, like finding distribution and PR.

Finding music to release can be harder than it sounds - it's a bit like finding the proverbial needle in the haystack. One of the easiest thing you can do is to start locally. Go check out some local musicians and see if you can find a few artists you'd like to work with. You can also listen to some music on MySpace, Bandcamp, ReverbNation and other sites that featured unsigned acts.

An indie label is a labor of love, so it is really important to hold out for some music you *really* believe in. When you've decided to start a label, you can feel like it's pretty urgent to go NOW. In the long run, waiting until you have a record you love and can't wait to bring to the world is worth it.

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How to Start a Record Label: Choose Your Business Structure and Label Name

Many indie labels skip this step, at least initially, but it is a good idea to have your record label set-up as a legal business entity from the start. You will need to be an actual, legal business if you want a business bank account or credit card, and it certainly makes tax time a lot more manageable. Likewise, if you are applying for business loans or other kinds of funding, you will need to be a legal business.

The names and specifics of various business frameworks differ from country to country, state to state and city to city (for example, sole proprietorship, LLC, Corporation, etc). You will need to spend a few hours with your computer or at the library to learn about the law in your area and to print up the forms you need to set up your company. There are a few general guidelines to keep in mind that apply everywhere:

- If you are starting the label with other partners, you will need a partnership agreement that details the percentage of ownership each partner has, how each partner can leave the business, how decisions will be made in the partnership and so on. Depending on where you live, the laws associated with your business structure may dictate your partnership agreement, or you may need to devise a separate agreement.

- For most indie labels, the best business structure is one that is simple and that protects the partners from personal liability should something go wrong in the business.

This is also the time to figure out how the company will operate, such as who will be responsible for which tasks and how people will be paid. If there are issues not addressed in the paperwork to set up your business, then write up a separate contract detailing this info.

Of course, now is also the time for a label name. Do a little online research to make sure your name isn't already taken.

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How to Start a Record Label: Introduction and Basics

Do you want to start a record label? Many a label has been started by someone saying, "ok, I've got a record label!". In some ways, it really IS that easy. Some of the best labels have made it up as they've gone along. However, if you really want to give yourself the best chance of success, not to mention protecting your investment, going through a proper set-up process is important. This guide will walk you through getting your label up and running.

Before we jump in, though, let's make sure you've thought this whole label thing through. Running an indie record label is fun, but it takes a lot of commitment and a ton of money. It's critical you go into this with your eyes open. Here are a few things to consider:

*If you are starting a record label with the sole purpose of releasing your own music (see Should I Release My Album?), be aware that being both label owner and only artist on the roster brings some limitations. Even with the best intentions, your label runs the risk of coming across as a vanity project. That means that some distributors may be hesitant to work with you and some funding sources may hold off on investing in you. If you are planning to do promotion in-house, remember that it can be a little uncomfortable for everyone for you to be calling up journalists asking them when they think of your album. This isn't to say that you shouldn't start a label to release your own music. It just means you need to be aware that it brings along a few complications other labels don't face.

*You will almost certainly have to work on your label every day, even if you have a full time job. Do you have the time to invest in making the label work?

*However much you are budgeting for your label - it will cost more. Can you start a label and cover your bills?

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Are downloads really killing the music industry?

The music industry does like to insist that filesharing - aka illegal downloading - is killing the industry: that every one of the millions of music files downloaded each day counts as a "lost" sale, which if only it could somehow have been prevented would put stunning amounts of money into impoverished artists' hands. And, of course, music industry bosses' wallets. But we won't mention that.

Take the story that appeared in this paper last week:

At least 7 million people in Britain use illegal downloads, costing the economy billions of pounds and thousands of jobs, according to a report.

Shared content on one network was worth about £12bn a year according to the research commissioned by the Strategic Advisory Board for Intellectual Property.

David Lammy, minister for intellectual property, said: "Illegal downloading robs our economy of millions of pounds every year and seriously damages business and innovation throughout the UK. "It is something that needs tackling, and we are serious about doing so."


Well, up to a point, minister. Ben Goldacre took apart the rather dodgy calculations behind the claims on Saturday.

But it left me wondering. Why does the music industry persist in saying that every download is a lost sale? If you even think about it, it can't be true. People - even downloaders - only have a finite amount of money. In times gone by, sure, they would have been buying vinyl albums. But if you stopped them downloading, would they troop out to the shops and buy those songs?

I don't think so. I suspect they're doing something different. I think they're spending the money on something else.

What else, I mused, might they be buying? Hmm... young.. like the entertainment industry... ah, how about computer games and DVDs? Thus began a hunt for the figures for UK sales of games and of DVDs and of music to see if there was any consistent relationship between them. And since this was about filesharing, it seemed sensible to analyse it since 1999 - when Napster started and blew up the CD business model.

(It's surprising how hard it was to find these statistics. You'd think someone like ELSPA, the European Leisure Software Publishers' Association, would have them. Nope: instead initially I had to track them via press releases. The BPI, representing British record labels, said that it didn't have numbers going back before 2004, which seemed a bit 1984-ish to me; it turns out the BPI doesn't like to release those figures because it changed the methodology for recording sales in 2004, effectively reducing the number. At least DVD data are easily obtained from the British Video Association and the UK Film Council. Thank you.)

The first clue of where all those downloaders are really spending their money came in searching for games statistics: year after year ELSPA had hailed "a record year". In fact if you look at the graph above, you'll see that games spend has risen dramatically - from £1.18bn in 1999 to £4.03bn in 2008.

Meanwhile music spending (allowing for that * of adjustment in 2004 onwards) has gone from £1.94bn to £1.31bn.

DVD sales and rentals, meanwhile, have nearly doubled, from a total of £1.286bn in 1999 to £2.56bn in 2008.

If we assume that there's roughly the same amount of discretionary spending available (which, even allowing for the credit bubble, should be roughly true; most of the credit went into houses), then it's clear who the culprit is: the games industry. By 2009, the amount spent in games and music is almost exactly the same as 1999 (though note that the music industry changed its methods from 2004).

Yes, downloaders aren't spending money on the music industry, and in that way they are hurting it. But I'd argue that the true volume of "lost" sales is nowhere near the claims made. Assume that music couldn't be copied (as many games can't). I don't think that the volume of music sales would equate to all those downloads. At best, it would be £600m larger.

But the reality is that nowadays, one can choose between a game costing £40 that will last weeks, or a £10 CD with two great tracks and eight dud ones. I think a lot of people are choosing the game - and downloading the two tracks. That's real discretion in spending. It's hurting the music industry, sure. But let's not cloud the argument with false claims about downloads.

(guardian)

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Who Pays for the Recording Costs?

There are no real rules about who should pay for recording costs. If you’re an unsigned band who goes into the studio to record an album with your own money and you get signed to a record label who releases that album, then those costs stay with the band.

The label does not have to pay you back the money you spent on recording the album, although that expense you have taken on can be considered when you’re negotiating an advance with the record label. If you get signed to a label on the strength of demo and the label wants you to record an album for them to release, often the label will pay for at least a portion of this recording. However, a smaller indie label that simply doesn’t have money to spend on recording costs might say, “well, you record an album, and we’ll release it,” leaving those costs up to the band.

If the label pays for the recording of an album, they have a right to withhold earnings from the band until they recoup all of the costs they have put into the album. Also, if the label pays for the recording, they generally have more of a say in how the album sounds. The extent to which the label exercises this right varies from label to label.

If you sign a multi album deal with a record label, make sure the contract clearly states who is responsible for the recording cost of each album (and if you sign a multi album deal, ideally the label will take on the bulk of the recording costs).

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How Record Companies Make Money

Record companies make money by selling recordings. It is a high-risk business. According to the Recording Industry Association of America (RIAA), approximately 90% of the records that are released by major recording labels fail to make a profit. Independent labels have to be more careful in their choices and in their allocation of expenses because they do not have the resources to cover many failures. However, they can make and promote records for far lower costs than major labels and be profitable with far fewer sales. The budgets for making and selling recordings are tied to what labels estimate they will sell. Knowing how many recordings might be sold makes it possible to budget recording costs. Most profitable labels have histories of selling and promoting that enable them to estimate gross income.
Recording Costs

Recording costs are borne by artists, not record companies. Record companies commonly make loans to artists (all-in advances) for these costs and recoup them from royalties.

With the exception of jazz and classical artists, new major label artists can spend between $100,000 and $500,000 to make a record, but recording budgets of one million dollars and more are not uncommon. Many independent artists will spend less than $15,000.

Manufacturing Costs

Manufacturing includes replicating recorded material and packaging. The costs depend on the number to be manufactured. Manufacturing costs are generally borne by recording labels, although labels try to deduct packaging costs from the base price on which they pay royalties.

Major labels pay approximately $.50 to $.55 per CD. Independent labels that order more than 100,000 CDs a year pay approximately $.65 per CD. Labels that buy less than 10,000 CDs a year pay approximately $1.20 per CD. These costs include the printing of 4-page package inserts and tray cards.

Royalty Costs

Record labels pay two royalties: The first is a record royalty to the performing artist(s); the second is a mechanical royalty to composers and publishers.

Some companies pay record royalties on a percentage (8% to 16%) of the suggested list retail price (SLRP) less a packaging cost, generally 15% to 25% of the SLRP. Others base royalties on the wholesale price to distributors. For a CD with an SLRP of $16.98, a common packaging deduction of 25% is $4.25 and the amount paid to the artist will be calculated as a percentage of $12.73. Thus, at a 10% royalty, artists will receive $1.27; at a 14% royalty rate, $1.78.

Record labels pay composers and publishers mechanical royalties. They try to cap mechanical royalty budgets at ten songs payable at 75% of the statutory rate ($.80 per song in 2002), which equals $.60 per song under the controlled composition clauses of recording contracts.

Promotional Costs

Major labels budget approximately 20% of annual gross income for promotion and selectively allocate the funds according to sales projections for each artist. Independent labels generally budget 10% of projected gross sales of all recordings annually and selectively allocate that budget.

Promotional costs include designing and printing promotional and packaging materials for recordings; press kits and Web sites; and advertising, radio promotion, videos, public relations and mailing costs. Some or all the costs for packaging, video production and radio promotion may be recouped from artists’ royalties, depending on contractual agreements.

Distribution Costs

The record companies decide on the suggested list retail price (SLRP) of each format. The SLRP helps stores to determine the discount price they charge customers and helps performers determine the price to charge to fans at gigs and by mail order.

The price at which distributors buy from recording companies (distributor wholesale price) is also set by the record companies. This is commonly 50% to 55% off the SLRP. If the volume is high enough, the discount can go to 60%.

The price at which stores buy from record distributors (store wholesale price) is determined by the distributors. This is commonly 55% to 65% of the SLRP. Stores return unsold product at 100% of their cost.

The price at which record stores buy from record companies that own their own distribution warehouses is approximately 75% of the SLRP.

Potential Profits

How do these costs relate to a million selling album?

At common discounts, record companies receive approximately $10.00 per CD ($16.95 SLRP). Thus, projected record company gross income is ten million dollars.

Out of this the record company will spend approximately $625.000 in manufacturing costs; approximately $1,000,000 in promotion (another $1,000,000 will be charged against artist royalties); $1,780,00 in royalties to the artists (at 14% of the SLRP of $16.95, less packaging); and $600,000 in publishing royalties (at 75% of statutory). After subtracting $4,005,000 from its ten million gross income, the record company has a gross profit of $5,995,000. It will recoup its million- dollar advance to the artist and its promotional costs. (Diane Rapaport)

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How to Start a Band

Starting a band may sound pretty straightforward, but it can actually be one of the most frustrating parts for many people. If you don't go about setting up your band right, you'll be caught in an endless cycle of trying to replace this player or that, trying to get the new people ready to play the songs, and so on and so forth - not to mention the fact that a dysfunctional band can out-drama any group of middle school girls. Save yourself the hassle and get your best band going right from the start.

Know Who You Need:

Before you can start finding band members, you've got to figure out exactly what your band needs. Say you and friend are playing together, and you play guitar and she plays drums. Well, you're set on a drummer, and whether you need a second guitarist will depend on your songs. Sounds obvious, right? But, it's easy to end up trying to fit in an unexpected keyboard player or extra guitarist just because you like that person. Remember that your goal is to get a band that can play shows together. Figure out the roles you need filled and match the people to the roles instead of the other way around.


Find the Musicians:

Now that you know what kind of musicians you need, you can start looking for them.


Figure Out The Ground Rules:

When you're just getting started in your band, there's no need to get too overly complicated and start fighting about your future royalties (if you are - consider it a huge red flag). If you're serious about your band, however, there are a few basics you should consider - it will help keep everyone on the same page:
* What is the practice schedule?
* Where will you practice?
* If there are any expenses (practice space, etc), how will you pay for them?
As your band grows, the things you need to figure out together will increase.


Who's the Boss:

Most bands have a natural leader, usually the songwriter and/or the person who formed the band. Exactly how much you want to exercise this whole "boss" thing is up to you - for instance, is it your songs, your way or the highway, or can others have some input? More importantly, when you start booking shows and promoting your band, it's good to have one person who is the main contact for the band. This can be the person who runs the show musically or someone else good at taking care of details.


Start Playing!:

Obviously, of course, the most important part of starting a band is just getting together and playing some music. Even with the best laid plans, this is the only way to make sure your band really clicks together. This is also a good time to figure out who is taking things seriously and is committed to the band, and who is not. If you have ambitions to make a living through your music, and your other band members view the band as a hobby, now is when that difference will rear it's head. If you and your band aren't a music love match, no problem - just return to step one!

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How to Start a Record Label: Introduction and Basics

Do you want to start a record label? Many a label has been started by someone saying, "ok, I've got a record label!". In some ways, it really IS that easy. Some of the best labels have made it up as they've gone along. However, if you really want to give yourself the best chance of success, not to mention protecting your investment, going through a proper set-up process is important. This guide will walk you through getting your label up and running.

Before we jump in, though, let's make sure you've thought this whole label thing through. Running an indie record label is fun, but it takes a lot of commitment and a ton of money. It's critical you go into this with your eyes open. Here are a few things to consider:


If you are starting a record label with the sole purpose of releasing your own music, be aware that being both label owner and only artist on the roster brings some limitations. Even with the best intentions, your label runs the risk of coming across as a vanity project. That means that some distributors may be hesitant to work with you and some funding sources may hold off on investing in you. If you are planning to do promotion in-house, remember that it can be a little uncomfortable for everyone for you to be calling up journalists asking them when they think of your album. This isn't to say that you shouldn't start a label to release your own music. It just means you need to be aware that it brings along a few complications other labels don't face.

You will almost certainly have to work on your label every day, even if you have a full time job. Do you have the time to invest in making the label work?

However much you are budgeting for your label - it will cost more. Can you start a label and cover your bills?

Read The Entire Story Here..