How to Start a Record Label

a you an artist or music fan looking to

find the next break out track imagine

having monthly royalty income coming in

while you sleep all because you found

the next big hit here's everything you

need to know to start your own record


let's tell what a record label actually

is a record label is essentially the

venture capitalist of the music industry

what they do is invest in artists and

hope to make the money back so they look

for artists where it's a good business

proposition and they sign a contract and

invest money in them hoping to make it

back over the long term that could be

royalties through streaming radio play

it could be through getting a sinc deal

where the track gets licensed or it

could be through selling merch or

sponsorships or selling tickets to live

shows so all of these possibilities for

them to make their money back but the

skill in it is is being able to find

those answers advise them and push them

to the next level by using their

experience by using their money and by

using their contacts previously part of

a record labels job would be to collect

the royalties on behalf of the artist so

there'd be a record label and a

publisher but because of distributors

you don't really need to do that the

distributor's do all the work for you to

collect the royalties using their

advanced systems which can detect where

all of the songs have been played across

digital streaming platforms across

sync'd on YouTube for example and then

collect the royalties on your behalf so

really a record label now is just

someone who's investing in an artist in

order to get their money back when

starting a record label you really need

to know that you are in it for the long

run you need to commit to finding

artists signing them and being able to

push them to the next level but also

have a five to ten year plan there is no

point starting a record label calling

yourself the CEO of that record lip put

it in your Instagram bio put it on your

LinkedIn and then go around telling

everyone you CEO of a record label and

then actually doing nothing it is so

hard and so difficult to get an artist

off the ground there are millions and

millions of tracks released every single

year who says that yours is going to be

one of them and why is it going to be

one of them so you need to have at least

a five to ten year plan even when an

artist breaks out the money doesn't come

back straight away it

can actually take years for you to

actually start making decent money from

these artists as they break and get

bigger and bigger and bigger so you need

to have a five to ten year plan and

understand that in the short term you're

not going to make any money from this

first we're going to start off with

setting up your record label and the

first thing you're going to need is a

brand and a name and don't worry about

the name don't worry about the brand

just pick something you could always

change it later down the line a lot of

people when they're starting a company

or a record label or an artist

they will think so long I'm talking

weeks months about choosing their name

just pick one

you could always change it and if you

don't like it you just become it anyway

and it just rolls off the tongue and

people refer to you as that name

whatever you've chosen it is what you

stand for and what you do that does the

talking look at companies like Google

Yahoo Oba burst mo when we first started

this company Maddy didn't even like the

name but you end up just becoming the

name and we gave ourselves five minutes

to come up with a name and that was it

because once that five minutes is up

that is your name and it is done and you

roll with it and move on to the things

that matter move on to the things that

move you forward and then it becomes

your brand and that is you and people

don't even think that deeply about what

you are called and don't worry about

having a fancy website having a fancy

brand record labels don't tend to have a

strong brand in fact I've noticed that a

lot of record labels they don't even

want to have a good website all they do

is if you go onto their website they

just have the dot-com and you go on and

you look at their logo and that's their

website and the reason for that is that

don't even want submissions there are so

many artists out there trying to get

signed that they are inundated with

submissions of tracks and they want to

get their submissions from sources that

they trust so don't even worry about

having a fancy website because most the

big players in

don't even have a website and the same

goes for location yes you're back in the

day you'd have to be in either London

New York LA to be in the music industry

now everything is digital anyway you

send all of the contracts across email

you send you have all of your meetings

on skype so it doesn't really matter

and once you as long as you can

communicate with your artists and you

can hear their tracks

then it really doesn't matter where

you're located of course face to face

meetings will be helpful but you don't

need them every single day so don't go

moving premises to these big expensive

cities just because you want to be able

to have that city on your website and

say I'm based in New York and I have a

record label that's a complete waste of


understand where you are and don't try

to look bigger than you actually are

because you're going to look to sign

artists who believe in you and you

believe in them for the right reasons

not because you have glitz and glamour

surrounding you the first thing you're

going to need to do as a record label is

have your preferred distributor at first

of all we recommend district 8 or CD

Baby they're reliable and they've got

great customer service and we're not

endorsed by them and we're not

affiliated by them but they are the best

that everybody uses and they pay out

royalties regularly and they have great

platforms and great technology so we

recommend those two if you are starting

a record label and what the distributor

will do is collect all the royalties for

you on behalf of your artists they will

also help you with Spotify submissions

and getting on to Spotify for artists

and all of the admin stuff that you need

to essentially make money as a record

label so make sure you've got a good

relationship with your distributor and

you've signed up to the right one that

you like because that is going to be the

heart and soul of your company and

essentially all of the revenue will come

via the distributor also if you haven't

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then we are uploading music marketing

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like this do subscribe now the next

thing I'm going to get onto is actually

approaching artists and finding artists

but what I want to discuss first is

getting everything in line before you

approach them and that's going to

involve contracts you're going to need

to get all of your contracts in a line

and know that they are watertight

because if one of your artist blows up

and they can get out that contract as

good and loyal as they are and you've

you've got a strong relationship

sometimes money can sway people so be

sure to have a watertight contract now a

solicitor or lawyer will charge you so

much money for a bespoke contract you

don't need that there are tons of free

resources out there that will help you

create a contract you've got the music

site calm you have lots of good

contracts and templates you can use or

you can use Lord depo comm which I think

costs about $40 for a contract and it is

like a step-by-step process where you

just fill in all of the blanks and

choose the options you want and out the

other end will come

your bespoke contract so you could

potentially save hundreds if not

thousands of dollars by using low depo

calm and I'll link them both down below

so you can go and check them out after

this video in terms of how much to take

from artists and how you structure your


it's kind of up to you so if you want to

take 50% of your artist royalties you

can do it if you have an artist that

accepts that deal then they are happy

with that deal then that's fair enough

most labels will take somewhere between

15% and 20% of royalties some of the

major labels would go as high as 30% of

royalties and overall income but it just

depends on the artist and also what you

are going to offer the artist the artist

will want to see in that contract what

you are going to do for them and the

timeframe normally it is around a three

year to five year deal they'll be

signing and you will sign to say what

you will

be doing how much you will be investing

and what you'll be providing them and

then they will also sign to say what

they will be doing and providing you to

honor their side of the contract so you

have to know what you'll be doing for

each other are you going to give them an

advance are you going to give them a few

thousand dollars up front to go and

create good music and get it produced

and mastered or are you going to pay for

that promotion their music video or some

kind of radio plugger

to try and get them on the radio it just

depends on what that artist needs at the

time how big the artist is and what you

can offer them to set up your record

label we do recommend having a social

media presence if you're able to prove

that you can grow your own social media

you could probably help by growing after

social media and every time you approach

an artist saying let's work I want to

sign you and they look at your social

media and there's nothing on it then

they're probably not going to be

attracted to signing a deal with you but

if they see that you are growing and

they see that you're putting out content

and you really mean business and you're

serious about your label they are more

likely going to take you seriously

so get creating social media content and

you can watch tons and tons of our

videos or other marketing videos that

will tell you exactly how to create

content for your social media in the

music industry and then you'll find that

you'll start to attract better and

better artists and you need to make sure

that you are finding the right artists

you need to make sure that they've done

everything organically don't be fooled

by all of the engagement that get the

number of followers they get and sign an

artist just because they have a high

social media following a following is

easy to fake if an artist has 40,000

followers on their Instagram doesn't

mean it's real if they've got tons of

likes but it's not consistent it's

probably not real you have to make sure

that everything is organic a good way of

doing this is go to their stories and

see how many views they get on their

stories if it is organic and it's a real

artist in you

to sign them they will show you how many

story views they get if you've got

40,000 followers you should get about

2,000 to 4,000 views on your stories if

you just see a couple of hundred the

chances are they've been faking their

numbers to make them look bigger and

there are tons of services out there

that will fake the numbers and fake the

likes so look for consistency look for

organic comments as well on each post

they will have organic comments if

they've managed to build a full

community and a lot of artists do fake

it because they panic when they think

that it doesn't look right if they don't

have thousands and thousands of

followers and they will happily let you

give them money and invest in them based

on those numbers so investigate

thoroughly before you sign them you also

need to know that this artist is a

viable business opportunity because good

music doesn't necessarily mean good

business opportunity you need to find an

artist who has a brand the potential to

blow up and also be able to get you your

money back whether they can build an

audience on social media and be able to

pull an audience to their shows and sell

tickets whether they've got a good

social media presence and able to sell

merch or whether simply they've got such

good music that has a lot of sync

opportunities so you can sell and

license the music for adverts on TV

movie soundtracks or video games are

great ways of getting money back through

sync but you have to make sure that this

all works if you don't have an artist

where you can make your money back and

you're hoping just to make it back on

streams it's not gonna work streams

won't get you your money back but those

other places will now that you've signed

your artist you need to work with them

working with them can be so difficult

you signed a three to five year deal and

you've got to now work with this

personality alongside them and push them

and push them to be able to take them to

the next level and also push themselves

you need to find the tracks that are

going to work and what you

to release whether you've signed them

you already know the tracks on now

they've got to go and write those tracks

and you've got to have full approval but

also don't kill the artists creativity

the best artists that blow up they know

what they want and they know what they

want to release if you ever seen

Bohemian Rhapsody the Queen movie you

will see that famous scene from that

movie where they say that bohemian

rhapsody' was too long of a track and it

would never blow up

nobody wants some kind of weird pop

opera hybrid it was in the movie trailer

and go check it out it's an amazing

scene and you know the story it became

one of the best songs ever released in

history so you need to understand that

these artists if they like what they're

putting out and they can create it every

single day then they will continue to do

it for you and your label if you put if

you pressure them down for a certain

genre and the genre is wrong for them

then they won't know how to replicate

that success if they are successful and

you end up with just a one-hit wonder on

your hands you also need to put the

right team together you need to employ

the right people for this artists you

need to find the right promotion

companies the right social media

companies radio pluggers PR you need to

find the right team for them find the

past successes of those companies I

think the best measure of how good a

company is is how well they've done in

the past year ask that company what

artists have you worked with in the last

12 months and being successful with if

they're a good company and they get good

results they'll be able to tell you a

mistake often made is record labels will

employ producers with big names

songwriters with big names or get the

truck mixed and mastered by someone who

did a big album ten years ago and hoping

that that name carries but it really

doesn't what happens is these guys are

just cashing in on their name they don't

necessarily have money coming in anymore

or any more talented than anyone else at

that point sometimes you can end up

dating your music and make it

like it was from ten years ago because

you picked the wrong songwriter or the

wrong producer so don't get attracted by

the shiny things that are going to come

your way when you start flashing the

cash because trust me people know how to

take your money and it is incredibly

expensive to get a big name to produce

your track when it doesn't improve the

track or add anything to the artists

credibility as a label Spotify are big

supporters of independent labels they

can give you your own platform for

Spotify for artists

there's the artist side of things and

there's the label side of things and

once an artist has released through you

you then get your own label profile and

this gives you priority submissions to

the curators because obviously you've

spent money on these artists and you are

promoting them so they want to know who

are the next big artists so make sure

you get on Spotify for artists because

if you get added to a Spotify official

playlist or new music Friday it could

blow up your career I hope you found

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