It can’t have escaped your notice that the music industry is going through a rocky period of change at the moment. Quite aside from the fallout of the pandemic on touring, the infrastructure of the industry itself is in a state of flux. While streaming represents greater accessibility to audiences for musicians, there is also a lot of uncertainty around how to generate income in a way that can make for a sustainable career.
This creates an opening for new music labels that are less rooted in the traditional methods and committed to developing methods that are relevant to the current business landscape. The rise of the digital age also means that music entrepreneurs have access to more resources and the ability to connect with musicians from around the world than at almost any other time.
That said, starting your own label is not something you’re likely to succeed in without any preparation. Let’s take a look at some essential elements you need to have in place as you set off on your journey. How can you give your business and the musicians you represent the best chance of meaningful and sustainable growth?
Funding
In the beginning, investments, grants, and loans are likely to be necessary to provide startup capital. The good news is that there are an increasing number of federal, state, and private programs that support small enterprises. Many are aimed squarely at entrepreneurs from minority backgrounds in efforts to break the cycle of poverty, racial, and disability discrimination in business circles. Part of your initial planning should include researching what grants and loans fit your circumstances. In preparing applications, it’s also important to assert not just why your background qualifies you for funding, but also how your music label will be working to affect meaningful change in the challenges the scheme seeks to address.
That said, simply gaining access to grants, loans, and investments is just the beginning. It’s also important to make plans that utilize those funds in ways that help you to become self-sufficient. Make a sensible budget plan, identifying priority expenditures, and stick to it. Do you really need an office, or can you work from home? Can you liaise with artists remotely, rather than frequently traveling across the country?
Vital too is making arrangements to generate revenue for both your label and your artists. Royalties are likely to be the lifeblood of your business, and they can often take upwards of 6 months or more to collect. Therefore identifying the various sources and platforms in advance can ensure efficiency from the outset. Register with performance rights organizations (PROs) such as the Performing Right Society (PRS) and the Mechanical-Copyright Protection Society (MCPS). Understand how to log tracks released on your label with them and make arrangements for receiving and distributing payments.
Research
The music industry today is complex and diverse. As such, winging it when it comes to your business plan is not advisable. While you probably want to represent a rich variety of clients, it also pays to do some initial research to better understand where you can focus your efforts and your capital.
Some areas to consider include:
- Contracts
The legislative aspect of running a label shouldn’t be neglected. It helps to ensure that both labels and artists are treated fairly and have protection. Research the different types of arrangements you can have with artists — ownership of masters, payment of advances, deal periods. Select which approach is most suitable for your business goals. Getting advice from a lawyer here can help to ensure there are no important considerations you’ve missed.
- Mastering and Distribution
It is becoming increasingly the case that artists are recording in their own home studios, and this may be the best route as your label starts out. However, you should certainly research the potential for professional mastering services you can partner with for the tracks to sound their best. You also need to consider what distribution structure you’re going with. It can be most cost-effective to go with a purely digital model and set up accounts with Apple, Google, and Spotify. However, if you plan to also produce physical media, it can be wise to explore companies that offer manufacturing and distribution (M&D) deals, so that your label doesn’t bear the brunt of the manufacturing costs.
Presence
The success of your label is dependent on trust. Especially early on in your career, you need to make sure that artists can trust you to act in their best interests and get their music noticed. Industry partners have to trust that you’re able to deliver on your deals. The public must trust you to bring them a great product. In the planning stages of starting your label, you need to consider how you can build your presence most effectively.
For the most part, this revolves around developing your brand. It might seem like a small thing, but even choosing the name for your business can have knock-on effects. A title that is descriptive of your services might limit you if you want to expand in the future, and if it’s spelled differently to how it sounds that could cause confusion. Take time and care to design a brand that reflects the values, ideas, and approach of your company. You want your business to immediately communicate to all stakeholders what you’re about, and why you can be relied upon.
As soon as possible, you should start building a web presence. This includes website, social media channels, YouTube, and streaming service profiles. These are going to be the primary ways in which new artists and the public can connect to you, particularly if you don’t have an office or aren’t going to be traveling a lot initially. Create content on these channels that helps to reinforce your expertise in the industry, and what your goals are.
Conclusion
Our digital age has opened up some great opportunities for music entrepreneurs. However, before starting your own label, you need to dedicate time to sufficient planning. Consider avenues of funding, research the industry, and create a digital presence. This will put you on the right footing to assert a positive influence in a changing music landscape.
Courtesy of Indiana Lee.
