How is a record label set up
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
label
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
money
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
deals
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
this video useful if you have give it a
thumbs up if you want to see more music
marketing videos like this subscribe and
we'll see you in the next one
[Music]
