For this post, we welcome Guest Contributor, Nick Sadler; author of “The Label Machine.” Nick has produced, remixed, and toured as the artist Mobscene and co-founded Never Say Die Records, and Disciple Recordings, two of the most successful independent record labels in the rise of the modern electronic music movement. For more information about Nick, see his full bio below.
Why start a music or record label? It’s a good question, and to answer it, I’ll give you 7 benefits for starting a label that will help your music career succeed in the long term.
1. It’s the best business structure for a music artist
You need to have a record label mentality because if you don’t, there is a high chance you won’t have a successful career.
Many of you won’t get the success you deserve because you don’t look at the big picture.
You focus on all lots of individual things, hoping it will make a difference. You take a ‘Get 1000 Instagram followers in 7 days course. Or you sign up to the next music-marketing platform that promises you explosive growth. You think I just need to sort out my Facebook advertising campaign or get on the right distribution deal it will fix all my problems.
The problem here is that you’re chasing all these individual parts when you need to have one whole system that brings everything together.
And in the music industry, that is a record label. A record label is everything together as one system.
And that’s why ultimately, all artists dream of being signed to a major record label because record label takes care of all these things for you.
However, times have changed, and you want to grow your career fast, you don’t have to sign to a record label.
But you do need to have a record label mentality.
Because you need to easily manage all these individual parts of your career as one system.
And that is what starting your own record label to self-release your music will do.
It will solve the problem of managing all the different parts you need to get the success you deserve.
2. Gives you flexibility with your business opportunities.
Starting a record label or music label allows you to have a media hub for all your entertainment ventures.
As a media hub, you can run your merchandise shop. You can sell your own artist and label branded merchandise such as t-shirts, caps, bags, stickers, etc.
You can run live shows through the label, not just your music gigs but as a vehicle for putting on other artists at your shows.
This is a tried and tested way of doing collaborations with more prominent artists. Put on a show, book the artist you want to collab with, and you get to hang with them at the show, swap music, and create the start of a relationship to eventually collab on music together.
If you want to branch out into artist management, you can put this under the label, too, again, a very popular way of growing income streams for your label.
Many great modern artists started their own music companies and record labels. They thought of themselves as a music business, and they made sure they understood everything about the industry.
Lil Nas X, Jay Z, Kurt Cobain, Deadmau5, and Billy Joel are all artists that made sure they understood how the industry worked and used their music labels as music hubs for their various music business opportunities.
3. Knowledge is power.
Starting a label is going to make you understand the business side of the industry. For instance, knowing how all copyrights work will allow you to understand how to claim all the music royalties owed to you as an artist.
As you will likely release your music on an international stage, you’ll need to know how copyright works in the US, UK, and Europe.
And, if you do, if you eventually get signed to a label or publisher, you need to understand the different types of copyright to know what rights you are negotiating when looking at a recording or publishing contract.
It will give you a deep understanding of the power of marketing and branding and the different ways you can use your music to reach new fans and convert them into listeners.
By starting a label, you will learn how all the different parts of the industry work together, which will allow you to understand how you plug into the industry yourself.
Book Recommendation:
In this ultimate guide to starting, running and growing your independent record label, you will learn all about the music industry business and how to navigate the tricky dos and don’ts. You will finally understand and take control of your music copyright and get to grips with the legalities involved. You will build your label effortlessly, learning how to professionally market your music and artists – allowing you to reach thousands of fans.
4. Legal protection and tax benefits.
If you set up a record label as a business entity, you can protect your personal assets if you have an accident that’s music-related.
For example, if on the way to your studio you have a car accident, or injure someone at a gig, your record label is liable, not you personally. Your personal assets are protected.
Depending on what country or state you are based in, there are tax benefits to setting up a label. You can put many expenses through a company that will lower your taxable income, ultimately leaving you with more money at the end of the day.
5. Gives you a distribution platform for your own music.
With the exception of signing young teenage acts, many major and large independent labels are looking for artists that are self-starters, artists that have proof that they can make good music, and most importantly, show they have a sizeable genuine fan base.
They are looking to sign acts that already have some momentum. An established record label wants to be the petrol on the fire.
And it is not just the labels. Music managers, agents, and other successful artists want to work with artists that have momentum and a fan base already.
However, when you are starting out, you need to release music for potential fans to listen to and for possible labels to check out. It’s a bit of a chicken and egg situation.
However, starting your own label to self-release will give you a distribution platform for releasing your own music to grow your audience and show the industry that you have the momentum to succeed.
6. Share in other artists revenue streams.
Once you know how to run a label and release music successfully for yourself, you’ll be able to sign other artists and do it for them!
You’ll have all the processes set up, and you can plug other artists into the machine and share in their revenue.
A typical indie label will split royalties 50/50. So if you sign two artists to your record label, then that’s the equivalent of collecting 100% of an artist’s income.
You can essentially double your music output and thus revenue streams by signing other artists and helping them distribute, market, and sell their music.
7. Teaches you to think like a business.
This is an extension of ‘knowledge is power’. When you understand how to run a record label, you learn how to run a business.
Running a business is a skill in itself and will help in all parts of life beyond your music career.
It will teach you to be organized, how to budget, how to plan, and how to be accountable for your actions and efforts.
So, in conclusion, there are many reasons to start a record label.
You may not be signed to a label yet and want to, but you need to get your music out with a label mentality to get signed.
Or you’ve been signed to a record label already, and you realize you want to take control of your music and all your royalties.
Either way, starting a label is one of the best things you can do for your music career. So what’s the next step? Find out more at www.thelabelmachine.com.
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