How does a music label work
Many musicians and music enthusiasts dream of owning their own record label. Earning a living with music - for many a goal that is never achieved. However, some manage to turn their hobby into a profession and to be successful with it. If you are toying with the idea, make your own To found a music label, of course there are a few things you need to consider. Read more here.
How do you start a record company?
Many people are surprised to learn how easy it is to start a music label. Because in the end this is just a completely normal company that is subject to the same requirements as all the others. The synonym record company makes this fact particularly clear and underlines that a music label can ultimately be treated like any other business.
In order to be able to start a music label or a record company, you definitely have to register a business. Before you take this step, however, you should think carefully about which legal form you (and possibly your business partners) want to choose.
In the case of the music label, any common legal form is basically conceivable. The most popular include, for example:
When choosing a suitable legal form, you must of course consider various things. The sole proprietorship is particularly attractive for many founders because it does not require any share capital and involves little bureaucracy. However, it also has a serious disadvantage: In the event of business failure, you will have to be liable with your private property. The situation is different, for example, with the GmbH (which can also be founded by an individual) and the UG (limited liability). Anyone who opts for one of these legal forms is only liable with the entrepreneurial ownership.
tip: Find out in detail about the various legal forms that can be used for a music label and compare the respective advantages and disadvantages. This is the quickest way to get a sense of which option is ideal for you.
Define the direction of the music label
Another important step is aligning your record label. Most music labels focus on a certain genre in order to work specifically with musicians and to build up a certain technical expertise. Such a specialization also makes sense with regard to the target group definition.
In this section of your foundation, personal taste can play a role. The choice of a music genre that is at the center of your activities will have a major impact on all subsequent phases and should ideally not be regretted.
Establish and consolidate contacts in the music scene
Setting up a music label and making money from it means, of course, that you have to sign different artists and distribute their works. In order to enter the music business successfully, appropriate contacts in the scene are indispensable.
The development of your network can start some time before the label is founded. Long-term contacts in particular, from which friendships often develop, are extremely valuable and profitable.
tip: As a good networker, you should not only take from others, but also always be ready to give.
Selling music - you need to know that
Once you've signed the first musicians and produced their songs, sales can finally begin. As the publisher, you need some codes and numbers so that music can be brought to men or women legally. Specifically, these are:
- ISRC (International Standard Recording Code): This code is used to assign the music to your label in the digital area. Important to know: Every song that your music label releases needs an individual International Standard Recording Code. To get the codes, you have to contact the Federal Association of the Music Industry.
- LC (label code): The label code is printed directly on the finished product and is also used to assign it to your label. Record companies receive the LC from the Society for the Utilization of Ancillary Copyrights - provided they can prove that they not only want to sell music just for fun, but also run a serious business.
- EAN (European Article Number): The EAN is better known to many as a barcode. This number must be present on CDs, records and the like so that the product can be sold in stores. If you are toying with the idea of only releasing digital products under your label, then you do not need a European Article Number, just the codes mentioned above.
info: Three-digit costs are due for both the ISRC and the EAN. Many music label founders ignore this fact and are then surprised that getting started in the music business is so expensive.
Optional: Membership in the Association of Independent Sound Carrier Manufacturers
The majority of people who want to start a music label decide to enter the independent scene right from the start. So-called independent labels - i.e. independent record companies - often work together with local artists and consciously distance themselves from major competition (which they usually cannot compete with anyway).
In order to still have a chance on the market, many independent labels have joined forces to form the Association of Independent Sound Carrier Manufacturers (VUT). A (paid) membership in this association is not a must for you as the owner of a record company, but it makes sense; after all, you can benefit from various advantages such as discounts, assistance and exchange with other labels.
Music Label Marketing - How To Get Well Known
When all formalities have been clarified, you can finally get into business properly. Everyday work in a music label is very diverse and includes, for example, communicating with musicians, recording pieces of music and selling the finished products.
In order for your work to reach as many people as possible - in other words: potential buyers - it is also essential for music labels to do marketing. The good news first: a lot can be achieved even with a small budget.
As a record company in the early stages, you should focus on two areas in particular:
Both are fundamentally free, but with a little luck they can attract a lot of attention. As a local music label in particular, there will be great interest from the local media. Provide newspapers, city magazines, blogs and radio stations regularly with press releases in which you refer, for example, to a new regional artist and his album release and, if necessary, also send out CDs as review copies.
If you decide to do social media marketing, it is important to consider in advance which channels you want to use. Particularly suitable social networks for music labels are:
Info: Do not just post wildly, but come up with a suitable strategy for each social medium. This is the only way you can really reach people sustainably.
Would you like to get more information on the topic of music labels? Then stop by the start-up platform, from the idea to the start of the business, simply explained and accompanied.
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