How to Start A Record Label in 2022

What is a record label?

Record labels carry out a number of different functions in the music industry, but in its most basic form, its role is to market trademarked music recordings, songs and videos. A record label–also called a record company–functions as a brand in and of itself and represents the music and artists that it owns. From publishing the music it owns, enforcing its own copyright, ensuring artists receive royalties and recruiting new artists, there are many activities that record labels engage in.

Why start a record label?

There are many reasons why you might want to consider starting a record label. This will largely depend on you, your career aspirations and interests.

While you don’t need a lot of money to start your own label and a very successful model can be built with a tight budget, starting your own company is no easy feat. A lot of time and energy (as well as financial investment) will be required.

To that end, if your only goal is to make a lot of money perhaps it’s best to reconsider. While record labels that are phenomenally successful can be equally financially rewarding, the industry is extraordinarily competitive. 

Your personal reasons for wanting to start a record label may be among any or all of the following:

1.To create a new niche or market for a particular type of music and artists. 

2.To build a platform for publishing and marketing your own music.

3.To capitalise on your love of discovering new artists and music.

4.To work in an area that you’re genuinely passionate about.

How do you start a record label?

1.Talk to people

The not-so-secret truth in any field is that no one goes the distance alone. Make sure you speak to other people, artists and producers in the industry to understand more about what it means to start a record label. Even getting in touch with other companies can be very helpful as most will be happy to share their knowledge and tips. 

Observe the activities of other record labels and start to build a network of people with experience and helpful advice. Whether you reach out to others in person, via email or on social media is up to you. 

2.Pick a name

Picking a name can often burn a lot of time and energy unnecessarily. The reality is that a name is not that important and that it’s better to simply choose something simple and straightforward, meaningful to you or even quirky rather than go in circles and circles trying to think of the perfect name that doesn’t exist. Consider what you want your record label to represent and see if your name captures the essence of your brand.

On a practical note, it’s worth spending some time checking social media platforms to ensure the username you want is available and jump on the internet to search for the relevant URL as well. You’ll also want to register the business name so no one else can claim it, so make sure you’ve checked whether it’s been claimed yourself first.

3.Determine your goals

Like any company, keeping your record label on target is the best way to achieve success. But this requires you to commit to goals. Having set goals gives you a blueprint by which to work and sets out the path ahead.

Make sure your goals are SMART i.e., specific, measurable, achievable, relevant and time-based. Whether you choose six-monthly goals or yearly goals, write them in a notebook, on your phone or in a computer document and use them to motivate you and keep you on track.

Many business owners choose to encapsulate their overarching goal in a mission statement. While not essential when you’re a one-man-band and just starting out, for some it can be a good way to formulate what their general motivation for the record label is. 

4.Choose an audience

Choosing an audience, and being specific about it, will help you avoid wasting time, money and effort marketing to the wrong people. Your promotional efforts will be most effective when they’re as targeted as possible.

Select a niche audience and determine what sort of preferences they have in music and artists. Think about what sort of content they consume and merchandise they are interested in. Are there subcultures or related cultures that can further inform your efforts? 

5.Create a visual brand

The visual representation of your brand is important in that it should encapsulate the core message, feeling and personality of your record label. The visual nature of your brand should be aimed at resonating with your target market. 

It’s often worth engaging a professional to help you create a logo, font or colour scheme that’s recognisable and true to your label’s vibe. If you want you can even include a tagline or slogan, though this is certainly not a necessity.

Some people even choose to print a limited run of merchandise or promotional material to experience their visual brand in a tangible way. 

6.Invest in your company

Up until now there hasn’t been much of a need to sink your hard-earned money into the company. However, if you need recruitment for recording, software, production materials, computers, websites, licenses and even business insurance (think liability insurance specifically) now’s the time. 

You’ll also want to set up a bank account for your record label and ensure you’re familiar with your tax obligations. It might be worth considering engaging an independent bookkeeper and/or accountant, though perhaps that’s for a little way further down the journey. 

7.Sign artists

Now it’s time for what’s called in the industry A & R. Standing for artist and repertoire, A & R mostly refers to the development of a relationship between the record label and its artists, or soon-to-be artists.

Signing up artists can be intimidating and difficult at first. It can be helpful to trial your process with friends who are in a band. That way you can iron out the problems in your process and get into the groove properly. 

Finding artists is another story and each record label develops its own custom strategy. Your approach may include using Spotify or other streaming platforms, open mics, community forums (online or otherwise) or open calls on social media. Instagram and Tik Tok are particularly useful for this. 

When it comes to signing the artist up contractually, avoid a world of pain by always insisting on written (though fair) contracts. There are plenty of online templates you can download and copy, but be careful that you don’t sign yourself into a corner. It can be worth engaging a lawyer to help you put together a custom contract. Rates can vary, but there are experienced copyright and contract lawyers who offer special discounted rates for budding artists and record labels. 

8.Create a royalty management system

Paying your artists royalties is a central responsibility of a record label. While the accompanying bookkeeping and financial legwork can be overwhelming it is really important. The better and cleaner your royalty management system, the better.

Ensure your records are accurate and detailed so that everything is completely above board and transparent.

The specifics of your arrangement will be up to you and your artists’ contracts. The common split for independent labels is 50/50, with many artists being paid quarterly. The more popular artists may need to be paid monthly however. 

9.Create album release marketing campaign

Creating and producing music and albums is very important, but planning a release marketing campaign can be just as critical.

To start off, create a realistic timeline and plan your launch calendar in advance so you don’t cannibalise your own musical assets and artists. Once you have a date, you can start arranging all the nitty gritty details, such as:

• Press photos
• Album artwork
• Social media campaigns
• Coverage and promotion in local media outlets
• Booking gigs
• Organising promotional items and assets

Lining up digital distributors, such as iTunes, Spotify or Bandcamp, is also important. While distribution is far easier nowadays than in days gone by, we still recommend investing the time and effort looking for the right affordable and reliable Digital Service Providers (DSP) to provide digital aggregator services for uploading your labels’ music.

You may want to consider record manufacturing too. It’s good to note ahead of time that producing physical vinyl records is costly and often an arduous process. Long production times and backlogs in manufacturing are part and parcel of the industry, but it can be worth it depending on your target market. 

If you are going to go down the physical records path, whether vinyl or even CDs, make sure to engage an experienced and skilled artist or graphic designer to help produce the visuals. 

10.Expand

As your record label begins to grow you may find yourself needing to expand. This can take the form of sourcing outside investment to fund the growth, or simply hiring people to take on roles you no longer have time to do like procuring new artists, PR, marketing album release campaigns, grant writing and more.

You may need to consider your business structure as well if you’re transitioning from a sole trader to a partnership or even a company. 

Research the development and growth of major labels and competitors to give you some idea of how other people and companies have done it in the past. And, of course, make sure to network in the industry and ask around for advice. 

Your new label starts here… at DJ City

Starting your own record label can be exciting, daunting, rewarding and exhausting. If you need any assistance with any and all things DJ and music gear and equipment, make sure to come on in to a DJ City store near you. Otherwise good luck and we’ll keep an ear out for your artists!