Starting a record label - advice needed please

[tedmanzie]

I have plans to start a small record label, releases will be digital and vinyl. I have experience with recording, mastering, pressing, packaging etc. What I don't have any knowledge of is distribution and how payments work with distributers, shops etc. There are undoubtably other things I don't know, but I don't know that I don't know them yet..!?

Does anyone here have experience of running a label?

Any advice much appreciated.

Edited January 18, 2015 by tedmanzie

[lojo]

Can't help but your local to me so is be interested to know who and what you are planning to record if you have any thing planned yet?

Edited January 18, 2015 by lojo

[taunton-hobbit]

Talk to an existing setup that (for a fee) might let you piggy-back their existing model?

[DaveFry]

[url="http://www.bemuso.com/musicbiz/"]http://www.bemuso.com/musicbiz/[/url]

Hth

[tedmanzie]

[quote name='lojo' timestamp='1421577468' post='2662763']
Can't help but your local to me so is be interested to know who and what you are planning to record if you have any thing planned yet?
[/quote]
Thanks. Initially I'll be putting some of my own stuff out and also looking for other music that I think is interesting, original, unusual or has something to say. I know that sounds a bit vague right now but it will become clearer

[Drax]

Sounds great.

We've just done a Production & Distribution deal direct with a distributor. They pay for the physical pressing, and have the exposure to get this the necessary digital audience. We split sales revenue, but retain the copyright.

Initially we intended to pay for the pressing ourselves, but one distributor liked it enough to propose a deal.

There's probably BCers doing this on a bigger (and more established) scale who can give wider advice. This is just one way of doing it, that's working for us.

Good luck, look forward to hearing how it develops.

Edited January 18, 2015 by Drax

[Old_Ben]

Be careful what you promise bands / artists, don't say anything that 'could happen, or might happen'. Only discuss things that you can definitely deliver on!

[tedmanzie]

Thanks for the replies everyone.
I'll keep you posted.

[BigRedX]

Unless they offer you a serious amount of cash up front, I wouldn't bother with physical distribution. It will tie up your stock and if it doesn't sell, getting it back in the condition that you sent out out can be problematic.

TBH I really can't see the point in getting a 3rd party to do physical distribution any more. Do your digital distribution with whichever aggregator offers you the best deal based on projected sales and sell the vinyl via sites like Bandcamp and your own band and record label websites.

[tedmanzie]

[quote name='BigRedX' timestamp='1421663959' post='2663635']
Unless they offer you a serious amount of cash up front, I wouldn't bother with physical distribution. It will tie up your stock and if it doesn't sell, getting it back in the condition that you sent out out can be problematic.

TBH I really can't see the point in getting a 3rd party to do physical distribution any more. Do your digital distribution with whichever aggregator offers you the best deal based on projected sales and sell the vinyl via sites like Bandcamp and your own band and record label websites.
[/quote]

Thanks BigRedX
You've got a good point, I'm not fussed about the big chains, but I would like to get some vinyl to places like Boomkat, Norman Records, Rough Trade, Bleep, Sounds Of The Universe, Sister Ray, Soul Brother etc as well as selling direct via Bandcamp. I expect vinyl editions would be something like 300 12"s. (This isn't a money making venture!)
Do you get any of your vinyl to small retailers or do you sell it all at gigs & bandcamp?
Ted

[BigRedX]

IME unless your record sells so well that the distributor needs to order some more stock from you with a couple of months of getting the first batch, you are never going to see any stock you send out or any money ever.

If you want to get your records into the specialist shops I'd start by approaching them directly, and only go through a middleman distributor if you are desperate to sell through that particular shop and that is the only way they will take any of your stock.

As a music consumer, these days I prefer to buy direct from the artist where possible, or failing that from their record label. I would only buy from a shop if it was cheaper (most likely because it was local and there were no postage costs) or because it wasn't available otherwise.

We only deal with local record shops where it is possible to turn up in person to get the money or the unsold stock back. All the other sales are done at gigs or on line through our web site and Bandcamp.

[fretmeister]

I can't see the demand for a new label TBH.

The big boys are there because of their advertising clout. The new artists release their own work directly or through aggregators.

Bands that might want your service will be the ones that can't be bothered to do the aggregator leg work themselves - you might be better off doing that as a professional service with your product being doing the work for them, rather than you being an actual label.

Anyone can get on iTunes / Amazon etc now by using the right aggregator, but iTunes and Amazon still take a chunky percentage - I can't see a new band wanting to pay you a percentage as well.

If I couldn't be bothered to do it myself, or didn't have time to learn the process I would certainly prefer to pay a flat fee where I give you my fully recorded product and you deal with the bar-coding & registrations and getting it to an aggregator, and then your task is over.

[tedmanzie]

I'm not aiming to compete with the big boys at all
This is small and interesting. There are lots of new labels springing up at the moment, labels can have a distinct personality and attitude. This would be very much hand picked music that I feel is interesting (some of it will be my own). A service to get stuff onto iTunes not what I want to do, but I appreciate your thoughts

[BigRedX]

TBH anybody who hasn't got the nous to get their music onto iTunes, Amazon etc. on their own is going to be too much hassle for a small record label to be worth bothering with.

[Low End Bee]

Good luck. If nothing else you'll give the bands you approach a bit of a confidence in what they're doing.
It's a nice thing to have a hub that has an identity to make bands feel like they're part of something bigger than just themselves.
There should be lots more of this sort of thing.

That does not include the fantasists I 'signed*' with a couple of years ago though! I'm sure you will be clearer and more realistic with expectations both ways than they were.

[size=1]*I had my fingers crossed so it didn't count.[/size]

[tedmanzie]

[quote name='Low End Bee' timestamp='1421670989' post='2663739']
Good luck. If nothing else you'll give the bands you approach a bit of a confidence in what they're doing.
It's a nice thing to have a hub that has an identity to make bands feel like they're part of something bigger than just themselves.
There should be lots more of this sort of thing.

That does not include the fantasists I 'signed*' with a couple of years ago though! I'm sure you will be clearer and more realistic with expectations both ways than they were.

[size=1]*I had my fingers crossed so it didn't count.[/size]
[/quote]

Thanks

[Thurbs]

I would go the direct sales route, visit each shop, pitch the concept and then try and flog them some of your records. I would target maybe 3 albums of each release and then schedule monthly followups. Dont forget to make it clear how they contact you WHEN (see what I did there) it sells out.

I would also back it up and offer the band to play acoustically to promote the album in the store (witht he band bringing more stock along for that event + signing the records etc).

Try and get them to buy them outright, then if you have to, go sale or return.

Work on the old 100% margin rule for retail, e.g. wholesale for £5, retail for £10.

[thebassist]

I run a vinyl only/digital label myself - the digital side of things, as has been said already, is easy enough to do. Get a Bandcamp, iTunes, Amazon account, etc.

Physical distribution is a much trickier proposition in my opinion.

I started out distributing directly to stores, some of the ones mentioned, but because I was a new label, they would generally only deal with me on a sale or return basis which was a pain in the arse but to be expected quite frankly. A few of the shops never paid up and the ones that did pay were generally a nightmare when coughing up the cash. Barring one store, I ALWAYS had to chase five or six times before they got tired I guess and finally paid.

Frustrated by this, I then approached and did a deal with a known distributor. Another major pain in the arse awaited. When everything was said and done and I'd paid for shipping, they'd taken their 25%, etc., etc. it really wasn't worth my while. Plus, the distributor was like the shops. I always had to send constant chaser emails and call them to pay up what they owed me. It really sucked the fun out of it.

Now all the vinyl released via my label is sold via the web site, the Bandcamp page, etc. Overall I much prefer it this way and don't intend to ever work with shops/distributors again. You're dealing with the end consumer yourself and minimise the amount of outsiders you have to deal with which is a lot easier in my opinion.

Like you, the label isn't my main source of income thankfully - it's a hobby and I'd much prefer to spend my spare time dealing with artists, customers, design, playing bass than chasing shops for money they owe me.

Artist payment structure - I don't deal with contracts at all. It's all done with a handshake, a virtual handshake too generally seeing as the artists can be anywhere around the world. The artist receives 10% of the physical stock and then get 50% of all digital sales - they're also 100% free to release their music via their website, Bandcamp, etc. themselves whereby I get nothing at all. I'm not sure how many other small labels operate this way but I've found this to be a good approach. In fact, I've never needed to tweak this method.

[tedmanzie]

[quote name='Thurbs' timestamp='1421675167' post='2663800']
Dont forget to make it clear how they contact you WHEN (see what I did there) it sells out.
[/quote]

Ha, thanks. Good tips.

[fretmeister]

Start reading

http://www.amazon.co.uk/Music-Business-revised-including-Copyright/dp/0753555700/ref=sr_1_1?ie=UTF8&qid=1421680196&sr=8-1&keywords=Music+law

http://www.amazon.co.uk/Need-Know-About-Music-Business/dp/0670918865/ref=pd_sim_b_5?ie=UTF8&refRID=1MTNPWTN7W70J6WHFEDP


Both authors are leading lawyers in Entertainment & Media.

[ambient]

[quote name='fretmeister' timestamp='1421666112' post='2663675']
I can't see the demand for a new label TBH.

The big boys are there because of their advertising clout. The new artists release their own work directly or through aggregators.

Bands that might want your service will be the ones that can't be bothered to do the aggregator leg work themselves - you might be better off doing that as a professional service with your product being doing the work for them, rather than you being an actual label.

Anyone can get on iTunes / Amazon etc now by using the right aggregator, but iTunes and Amazon still take a chunky percentage - I can't see a new band wanting to pay you a percentage as well.

If I couldn't be bothered to do it myself, or didn't have time to learn the process I would certainly prefer to pay a flat fee where I give you my fully recorded product and you deal with the bar-coding & registrations and getting it to an aggregator, and then your task is over.
[/quote]

It's another avenue for an artist to sell their music though. I sell via Bandcamp, Amazon, iTunes, CD Baby etc, but not everyone shops via them, and it's very easy for your music to get lost amongst everything else, and they're going to push for what's going to sell in big quantities, and ignore the much smaller artist.

Whereas a small and specialist company will have more time for you, and the buyers from that specialist company will kind of know what they're getting, be it a small company that specialises in selling solo guitar music, or in my case experimental/ambient music.

I had a company last week offer to release my stuff, which is great. They specialise in ShoeGaze, ambient, instrumental etc, so there's a market there already with their customers. I did a track for a compilation album that they released last year.

As an artist, you can't narrow down your avenues for exposure.

Edited January 19, 2015 by ambient

[tedmanzie]

[quote name='thebassist' timestamp='1421679663' post='2663863']
I run a vinyl only/digital label myself - the digital side of things, as has been said already, is easy enough to do. Get a Bandcamp, iTunes, Amazon account, etc.

Physical distribution is a much trickier proposition in my opinion.

I started out distributing directly to stores, some of the ones mentioned, but because I was a new label, they would generally only deal with me on a sale or return basis which was a pain in the arse but to be expected quite frankly. A few of the shops never paid up and the ones that did pay were generally a nightmare when coughing up the cash. Barring one store, I ALWAYS had to chase five or six times before they got tired I guess and finally paid.

Frustrated by this, I then approached and did a deal with a known distributor. Another major pain in the arse awaited. When everything was said and done and I'd paid for shipping, they'd taken their 25%, etc., etc. it really wasn't worth my while. Plus, the distributor was like the shops. I always had to send constant chaser emails and call them to pay up what they owed me. It really sucked the fun out of it.

Now all the vinyl released via my label is sold via the web site, the Bandcamp page, etc. Overall I much prefer it this way and don't intend to ever work with shops/distributors again. You're dealing with the end consumer yourself and minimise the amount of outsiders you have to deal with which is a lot easier in my opinion.

Like you, the label isn't my main source of income thankfully - it's a hobby and I'd much prefer to spend my spare time dealing with artists, customers, design, playing bass than chasing shops for money they owe me.

Artist payment structure - I don't deal with contracts at all. It's all done with a handshake, a virtual handshake too generally seeing as the artists can be anywhere around the world. The artist receives 10% of the physical stock and then get 50% of all digital sales - they're also 100% free to release their music via their website, Bandcamp, etc. themselves whereby I get nothing at all. I'm not sure how many other small labels operate this way but I've found this to be a good approach. In fact, I've never needed to tweak this method.
[/quote]

Very interesting, thanks.

Out of interest did you also supply the shops with digital files to sell? I have no idea how that works as yet.
Do you think it could be a reasonable idea to build some profile for the label by basically giving the retailers (small ones mentioned above) some vinyl copies of the first few releases to sell, knowing that even though the vinyl will sell quite quick (hopefully) the 'digital stock' will stay available on their system indefinitely? So as a label you hopefully get a good review of the physical release which looks good, but the sales come from digital.

As you know I'm not in it for the money, but I would like to build a good profile for the label, assuming I have music that I am proud to promote.

[tedmanzie]

[quote name='fretmeister' timestamp='1421680344' post='2663868']
Start reading

[url="http://www.amazon.co.uk/Music-Business-revised-including-Copyright/dp/0753555700/ref=sr_1_1?ie=UTF8&qid=1421680196&sr=8-1&keywords=Music+law"]http://www.amazon.co...words=Music+law[/url]

[url="http://www.amazon.co.uk/Need-Know-About-Music-Business/dp/0670918865/ref=pd_sim_b_5?ie=UTF8&refRID=1MTNPWTN7W70J6WHFEDP"]http://www.amazon.co...WTN7W70J6WHFEDP[/url]


Both authors are leading lawyers in Entertainment & Media.
[/quote]

Good idea, thanks

[mickster]

All good advice above IMO. I used to work for a large independent label & distributor in the 90's, obviously before the advent of digital sales via Bandcamp etc. I think the independent distributor route works when you're producing and selling quantities above a certain threshold...a distro can get stock into shops & outlets that you can't reach yourself, and they will chase payments on your behalf and deal with postage & packaging. We used to charge anything from 8-25% of the wholesale price for doing this (wholesale price in those days was around £7.00 for a CD that would retail at £11-12). Obviously, teh bigger the label / act, the lower the distro fee you can negotiate.

But as others have said, dealing with a distro does itself add a degree of complexity - contracts, payment terms, keeping an eye on stock levels & arranging for new stock to be pressed / delivered etc. For small quanities (ie <500 units), you're probably better off doing it yourself. You may well struggle to get stock into even independent stores like Rough Trade, Sister Ray, Piccadilly etc, and yes, getting paid by these shops can be a headache; I'd just focus on direct physical sales via yr label website & Bandcamp. You have to deal with postage & packaging yourself, but you will get more per unit and all payment is upfront. Put the effort into publicising the acts on yr label & stimulating direct sales rather than on getting a few vanity units into 'cool' shops like Rough Trade.

Edited January 19, 2015 by mickster

[thebassist]

[quote name='tedmanzie' timestamp='1421680608' post='2663873']
Very interesting, thanks.

Out of interest did you also supply the shops with digital files to sell? I have no idea how that works as yet.
Do you think it could be a reasonable idea to build some profile for the label by basically giving the retailers (small ones mentioned above) some vinyl copies of the first few releases to sell, knowing that even though the vinyl will sell quite quick (hopefully) the 'digital stock' will stay available on their system indefinitely? So as a label you hopefully get a good review of the physical release which looks good, but the sales come from digital.

As you know I'm not in it for the money, but I would like to build a good profile for the label, assuming I have music that I am proud to promote.
[/quote]

I dealt with shops/distributors in 2010. If I recall, they weren't selling digital then. But I really can't remember in all honesty so I can't help there I'm afraid.

Contact them mate - I'd start with Phil at Norman. Top, top bloke. A treasure to deal with. Very supportive. Great shop.

My only other bit of advice for you (and please choose to ignore any of the advice I've given too) would be to only release music that you're proud of promoting. I only release music I love which, at the start, wasn't necesarily good commerically but I'm super glad I did it that way. Now all the physical releases on my label are sold out within a few days of being put up for sale. Generally, to people that buy everything released on the label.