I’ve been thinking of starting a record label for some time. Nothing big, I have no illusions of becoming a mult-millionaire over this, but its something serious. My pockets aren’t that deep but I’m a lot better off then the founders of Def Jam were when they started. Unfortuently, I don’t know the first thing about launching this thing. I only have a couple questions but I’m gonna have a lot more as I run with this.
I know there are a TON of independant record labels made by people just like me. How do I copyright the name of my label?
How should a contract for an artist be handled considering that my label is not a big one?
By an attorney. You might be able to find a template for a contract out there, but if you’re serious about doing this you ought to invest in the services of someone who knows what they’re doing and understand the nuances of the business.
Regarding contracts, if you want to go it alone, at least hire a laywer to look over them at the end and give you some final consultation.
Here are some other things to research:
UPC/Bar Codes (Get your own/or get a subsiduary code)
Registering the CD in catalouges & Soundscan and BDS
Pressing of CDs & printing of inserts
Mastering/Remastering/Recording
Sales via iTunes or similar services (some artists won’t do this)
Sales via record stores - 3rd party distribution vs. Self Distribution (some major record stores do not accept or order CDs from independent labels and distributors).
Promotion & marketing plans (CD release parties, advertising, getting reviews, etc.)
As a label, these are all generally your responsibility.
There are some book stores online with books that may help you understand the industry.
If you are off to start a record label, I highly recommend This Business of Music by Krasilovksy and Shemel. It’s loaded with information, definitely a dry read. My husband’s particular copy is the revised 7th edition; a quick search on amazon reveals that 9th is out, so go with the most current. Also All You Need to Know About the Music Business by Donald Passman. These will get you off to a good start as far as the law end of things are concerned, but as always, IANAL, please get a real one
There are quite a few other things I forgot to mention - which involved starting a label.
A label is a business, and you will need to incorporate as a business (perhaps a retail licence and through your city a business licence for your home if that will be your office - depending on where you are) - you will have to have a business number for filing taxes.
And regarding a lawyer, you will need to hire the services of one for many things.
Contracts with artists are only one aspect - but those have enough nuiances - such as royalties & rights - or percentages of profits, advances on royalties, and when all these payments to artist are to be made.
These are only some of the contracts you may need - and I wouldn’t trust buying them online, because some artists have lawyers in the family and may ammend contracts and you will need a lawyer to look them over at different stages of the signing process:
Mechanical License
Master Use Agreement
Master Sale Agreement
Production Agreement
Recording Agreement
Release Forms for Mastering/Re-Mastering/Publishing
Distribution Contracts
Non-Disclosures
And so on - there are so many legal forms!
I hope I am not scaring you, it is fun - but lots of work!
Want to point out that there are attorneys that specialize specifically in music - same way some specialize in copyright, realty, divorce, etc. So if you can get a music lawyer you might be giving yourself a big leg up! My brother used to work for one, seemed like a really interesting line of work.
And when you’re ready for the “create a great web site” call me
Trademarking your name and getting a lawyer for contracts are the least of your concerns. Lawyers are highly over-rated for generating/reviewing contracts anyway, if you know what you’re doing. If you don’t know what you’re doing, you don’t want advice from a laywer, you want advice from someone else who’s built this sort of buisness before.
The most important things to worry about are:
a) finding acts that are going to go somewhere (finding acts is easy, you need great acts)
b) convincing them that you can build their product and sell it.
c) build their product and sell it.
I read that 75% of the small businesses started in the US fail in the first year and 90% within 3 years. And the reason is lack of knowledge of the business. My suggestion would be to go out and get a job in the recording industry and learn all you can about it. After 5 years or so, then consider going into business for yourself. With your apparent lack of knowledge of the business, I would bet your chance of failure is mighty close to 100%. I doubt anyone that has had success in the recording industry woke up one morning and decided to start a record company that day.
Racer: Funny thing with the music biz is you need to already be in the business to be hired in the business. For example, all the people I know who work for major labels were promoters, or ran their own labels first.
99% of all labels are started by musicians who are sick of other labels rejecting them or giving them bad deals. So in a way they do wake up & decide to get a label going that day.
Most indie labels are bands doing nothing more than self publishing when they start, but then they start to help out friends as well.
The most successful indie labels are usually ran as artist collectives, and the artists help with the work involved because they have a share in the label.
The ones which succeed also are the ones with the largest network.
Like Bill H. said, you need to find great acts and sign and promote them. One of the keys to the music business is being in the scene. That means going to every gig, hanging out in smoky bars even if the bands are unknowns, and meeting other people in the business both on a social & business level.
Your contacts, and the music scene are your clients and partners, and dont expect to get rich off of creating a label. I read somewhere that before Eminem was signed by a major label, he sold less than 7000 copies with the exact same CD and songs which were later released on a major label. If you are signing other indie bands they will jump ship on you the moment a major label comes knocking, because a major label can promote them far more. An indie label hasn’t had a gold or platinum album in decades because the machine behind the major labels will always have more power to advertise and you just can’t compete. But as an indie label, you can have quite a bit of fun, make a little bit of money, and like some friends of mine maybe after a few years get a job at Sony under artist management.
