4.26.06

Starting an Indie Record Label

Okay, y'all, whole books have been written on this subject, so you should consider this more an overview than a comprehensive guide. If I'm writing a book, you can bet it's gonna be on something juicier than this. But with that said, here's the basic gist of it.
 
First and foremost, you gotta love music.
If you don't, really, what's the point? You'll end up doing it to make money, and there are a lot better ways to do that. Actually, most ways are better. But if you *do* love music, why not? At least you can enjoy what you do, even if the money isn't great.
 
Second, have plenty of money.
All businesses need start-up capital. You can't do anything without money. If you have no money and no prospects of getting any, try to find investors. No money and no investors? Go back to night school for a business degree, kid.
 
Third, enlist the free assistance of smart people that you trust.
Your friends (assuming you have smart friends), with similar taste in music. It's an uphill climb and it's easier if there's someone behind you kicking you in the ass (with love, of course.)
 

Take a long, hard look at your expectations and your resources. The road to Hell is paved with people who were sure their friend's band was the next big thing and they were all going to get phenomenally rich together. If you're starting off with fifty grand, maybe. Otherwise, you've got a lot of work and you'll need a lot of luck.
 
Now, a few words about the nuts and bolts. You have to examine the different types of corporate structures you can choose and pick one. You can either file for it yourself or get a lawyer to do it for you. If you need to keep things on the cheap, remember, the fewer things a lawyer does for you the cheaper things will be. There are plenty of things you will need a lawyer for that you can't do yourself. Why give them money for something you can do yourself? Once you get your business certificate, get yourself a tax ID number and open a bank account for your label. Keeping your money separate from the label's money is just simple good sense.
 
Now, an important step in here is picking your first artist. Yes, there are 10 gajillion unsigned bands out there, and relatively few labels to sign them. That doesn't mean a band is going to be jumping for joy to get an offer from someone with no experience. You want to pick someone that has the potential for success, but you might have to schmooze up to them a little to get them to give you a chance. Of course, after you prove yourself, everything should get easier.
 
Send your band off into the world to make you some music. Once they have a nice, well-executed finished product for you, you're gonna have to make a bunch of copies. You can either go the DIY route, or you can employ an outside company to make these copies for you. This is worth the extra cost. You give them masters, artwork and money, and you get (hopefully) professional quality CD's. Some of them will even throw in a bar code.
 
Let me digress for a moment about bar codes. You know what they are. Every product on earth has one. Why do you want one? Because there's a central agency that tracks record sales, Soundscan. Without a bar code you won't be able to find out how many things you've sold and in what places. And you won't be able to prove that you've sold anything at all. So, either get your own if you think you're gonna actually be serious about this whole business thing, or use one given to you by the manufacturer. It'll be their number, but you can still track your sales.
 
So you've signed a band, gotten them to record their music, sent their mixed and mastered final project to a replicator, and then you finally have your impressive stack of professional looking CD's. What next? Distribution. A new indie label getting distribution from a real distributor is almost as difficult as your local garage band getting a contract from an indie record label. But there's a few ways to handle it. You can do it yourself, by selling CDs on commission from stores in the vicinity of where your artist usually plays. You can and should do mail order sales from a website or the artist's website or blogspot/myspace. You can look into electronic distribution, too. And you can still try to get in good with a real distributor. Just don't let 'em screw ya cause you have no rep yet.
 
Once you've tackled getting the CD physically out there, you can put your marketing plan into play. Of course, you should have figured your marketing plan out while the artist was still in the studio. Just saying. Plan ahead. Once you have a release in stores it's time to promote it. Again, there are books on this subject. Be creative. Be your market and think about what you would notice. Get in touch with your inner!fan.
 
When the money starts rolling in, first and foremost, you have to get back the money you paid out. You're not ripping off the band. If you have no money you'll be no good to them in the future, right? So "recoup" every cent that you paid out right off the top. Any money coming in after that, you split with the artist. Again, you should work out how much that's going to be right up front. You don't HAVE to have a legal contract, but if you can afford one, it can't hurt.
 
wash, rinse, repeat...