Starting A Record Label

A&R (ARTIST & REPERTOIRE)

The ones in charge of finding and signing new talent. They also have a hand at choosing album cuts and studio selection.

AIRPLAY

Airplay is very competitive. There are two ways to get airplay. One is through money and the other is through buzz. Either you pay a hired radio promoter a bunch of loot, or get buzz. Buzz can be obtained on college radio and other indie radio outlets like mixshows and late night specialties enough to generate public awareness. Buzz can also be made announcing your release date or distribution or gigs. There is one third way. Luck.

ART DEPARTMENT

They are in charge of artwork like album covers and advertisements.

BARCODES

These are parallel lines that vary in width and represent a 12 digit number called the Universal Product Code number or UPC. When they are on your album and scanned the store digitally stores data of what album is being sold. You don't need a barcode if you're selling in mom & pop stores and gigs, but once you sell in retail and online retailers you do. You can get one from http://www.uc-council.org. The fee for a professional barcode is around $750.00 plus the cost to renew it every year. If you want your sales to count on charts then you must register your barcode with SoundScan. There is a way to get around the $750.00 price of a barcode and that is by signing up for Cdbaby.com and buying one for $10.00 there, but this type of barcode only counts for your first 10,000 sales, after that you must buy a new one.

BUSINESS PLAN

In this document you will show your plans on budget, marketing, your absolute strengths and weak points and any problems that you face.

CONSIGNMENT

Consignment is when a store takes your product and you are paid when they sell. Usually by contract you promise to promote your album and they keep it on the shelves. You must keep vigorous track of sales or you the store may keep your money. It is very wise to use consignment as a sales backing so you can present a clear picture of your history to a distribution company.

Online Distribution

- The two driving forces of online distribution of indies are www.amazon.com and www.cdbaby.com, also first and second in that respective order. Amazon.com will make your album receive a lot of traffic through little promotion but costs a bit. www.CdBaby.com is a one time fee of 35.00 and they handle the shipment, mp3 links, picture uploads and credit card transactions.

Packaging & Artwork

- Artwork is totally a personal taste so hire someone who fits your needs. In packaging think of your budget first then perks. Diskmakers.com and cdman.com have the exact guidelines you need to follow to have your artwork printable as well as prices on packaging and pressing of your albums.

PAYOLA

- Payola is illegal. It is taking something in order to play songs. Most radio people have a limited salary, but some at the top have very nice cars and houses even beyond their means. Radio promoters use secret words through cellphones offering money, tickets, cars, houses and fixing radio budgets in order for a slot of airtime.

PERFORMANCE ROYALTIES

- Performance royalties are from performances of your song based on how much you own. If you own 100% of the song you get all the money. If you own just the lyrics you get 50%, or just the music 50%. If you sample, the sample would take 25% of what is left so you get 25%. Through ASCAP and BMI you are paid when a radio station, concert, dance hall or club plays your music.

When your records sell you receive two types of royalties, mechanical and record royalties.

QUICK TIPS

Be on time always
Never get sprung off your own albums
Don't ever trust the media, only use them as a tool
Don't trip off your really big songs
Don't buy anything you can get for free
Don't use outdated mailing lists and addresses
Be truthful
Be professional, look professional, talk professional
You are what you think you are

RADIO PROMOTERS

- Radio promoters make a ton of money. Major regional promoters cost a lot and somehow use your money to influence radio stations to play your songs. Independent radio promoters cost slightly less and can pitch it to college and other indie outlets. Getting in contact with these people are hard and may require an updated list of numbers due to their shadiness. They do not like working with newbies. Finally, after giving these people 20,000-200,000 they may just take your money and do nothing.

START A LABEL

- To make your business legal, look in the business section of the phonebook for business license officer or treasurer. Have them mail the license to you and remember you are a wholesale company run out of a private home or facility. Non-profit means you don't plan on money being any focus of the label. Corporation means you will personally take no loss financially. Sole proprietorship means one person is responsible financially for everything. Partnership is equal responsibility. Then go to an IRS office and apply for a Tax ID number. With this you are responsible for taxes unless you can show a loss. An accountant should be hired when you make profit.

TYPES OF RECORD DEALS

- Through a distribution deal or pressing and distribution deal an indie can be signed to an indie yet have a major label press and distribute the album for a cut of the profit.

- A production deal is for indie producers and production companie to develop talent and offer their artist to a major label, but get a cut of profit from sales.

- A major label deal is a deal through either Sony, Universal, BMG, EMI or WEA. You will be promoted with more money and very heavily and most likely sell more, but the artist will receive a very minor percent of profit. Majors are professional when it comes to advertising, financing, legal, merchandising, promoting, sales, shipping factors of an album.

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