which lawyer do i need to create a record label?

Always get legal advice from an entertainment solicitor/lawyer before signing a record contract. Who Can Start a Record Label? Anyone. Chances are, if you’re reading this, you’re more than able to start a record label.

Full Answer

Do I need a lawyer to start my own record label?

This varies depending on the laws where you live. If there are to be partners in your label, you may need a lawyer's help to draw up a basic business agreement at this stage, which is an additional expense.

Do record labels choose who they sign with?

The vast majority of smaller record labels are subsidiaries of one of the above 3. This means that while they are typically free to choose who they want to sign and control how they spend their revenue, ultimately they are answerable to their parent company.

What does a record label actually do?

It’s also the label’s job to help artists with artistic directions, find collaboration opportunities, release music videos, manage social media, get the press talking, define tour schedules and more — there are 1000 and one things to get to. 13. Divvy up royalties

How can I get help with incorporating a record label?

If you need help with incorporating a record label, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site.

How do you make a record label legal?

How to register record label in 13 stepsChoose your genre/sound/audience. ... Get your brand in order. ... File your business. ... Get an ISRC “stem” from the National ISRC agency in your country. ... Consider registering with SoundExchange and Neighboring Rights Collection Societies. ... Set up a process to pay out mechanical royalties.More items...•

What degree do you need to own a record label?

No special license is required in any state to operate a record label. You may set up your business as a sole proprietor, limited liability company or corporation depending on your needs and the size of the business. Contact an attorney or accountant to determine the right structure for your business.

How much does it cost to start my own record label?

The record label business is a large industry and there is room to promote and distribute music everywhere. The average startup cost of a record label is between $200 – $50,000. But, for large labels, the average cost can be from $100,000 – $500,000.

Can I make up my own record label?

Many indie labels skip this step, at least initially, but it is a good idea to have your record label set-up as a legal business entity from the start. You will need to be an actual, legal business if you want a business bank account or credit card, and it certainly makes tax time a lot more manageable.

Do I need an LLC to start a record label?

Yes. An LLC will give you personal liability protection against potential business risks as well as give your record label more tax options and credibility. It is relatively inexpensive and simple to form and maintain an LLC.

Is owning a record label profitable?

Is Owning a Record Label Profitable? It can be profitable, but it's very hard to get to that point, especially as an indie record label. The majors are all making a profit, but they have the biggest and most successful acts on their rosters, and they have business practices in place that ensure the money keeps coming.

What insurance does a record label need?

General Liability Insurance For Record Labels. All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance.

How do small record labels make money?

Record labels make money on recordings by investing in the release cycle — whether it's the entire cycle, from recording to marketing (as in a traditional record deal), or only a specific portion of it (as in a licensing deal) — and then taking a stake of the revenue generated by that album to recoup their investments ...

How do I start my own independent record label?

How to Start a Record LabelCreate a Record Label Business Plan.Choose Your Record Label's Business Structure.Determine Your Business Costs.Create a Unique Name for Your Record Label.Register Your Business and Open Financial Accounts.Purchase Equipment for Your Record Label.Market Your Record Label.

How do I start a LLC record label?

Start a record label by following these 10 steps:Plan your Record Label.Form your Record Label into a Legal Entity.Register your Record Label for Taxes.Open a Business Bank Account & Credit Card.Set up Accounting for your Record Label.Get the Necessary Permits & Licenses for your Record Label.Get Record Label Insurance.More items...•

How much do record labels take from artists?

Music labels take as much as 80 percent of those earnings as part of traditional record deals. Bigger stars who negotiate a more favorable royalty split still usually share around 50 percent of music revenue. Music legends and pop superstars have even complained of how little they make from music streaming.

What does it take to start a label?

Get a Distributor As a label, your key function is selling records. So, you will need a distributor to deliver your artist's records to the stores. Most new labels can start off with a digital distributor. This will ensure that your music is delivered to all the major online stores/streaming sites.

What are the costs involved in opening a record label?

Recording -- Zero to $15,000 or more. Producing a record at a commercial sound studio can cost hundreds of dollars an hour. If you’re going this ro...

What are the ongoing expenses for a record label?

Your largest ongoing expenses are likely to be the costs of pressing new physical units (CDs and/or vinyl, mostly) and promoting new releases. Most...

Who is the target market?

Go to bars, clubs and other performance venues where your signed bands are playing and find out who your customers are in terms of age, fashion, ed...

How much can you charge customers?

Prices are pretty much determined by the market. Vinyl records generally sell for $18 0r $20, while compact disks sell for a bit less. Streaming se...

How much profit can a record label make?

Consider XL Recordings, the small British indie label that discovered and released music for the likes of Adele, Radiohead, Vampire Weekend and oth...

How can you make your business more profitable?

Consider producing compilation albums as samplers of your label’s artist roster. Also, explore opportunities to record music or other indie labels...

Is this Business Right For You?

You must love and recognize your definition of good music. Your communications skills are equally important since you’ll need to get unsigned bands...

What happens during a typical day at a record label?

There are many facets to this business, so each day is exciting and different. Here are a few of your key responsibilities. Creating a social prese...

What are some skills and experiences that will help you build a successful record label?

You must have an ear for music and not be easily discouraged. You’ve got to be your talent’s biggest fan and be tenacious at getting the word out.

What is the growth potential for a record label?

Today’s music market is splintered, with more channels and sub-genres than ever. The cost of entering the market is also relatively small, with onl...

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What is a record label?

A record label is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.

How much does a vinyl record cost?

Prices are pretty much determined by the market. Vinyl records generally sell for $18 0r $20, while compact disks sell for a bit less. Streaming services such as Spotify might pay a fraction of a penny per play and iTune downloads might sell for $7 or $10 for an album or a dollar for a single.

Why does a label make a dollar a unit?

Because manufacturing and packaging costs are so high for physical units, the label might only make a dollar a unit once the manufacturer, artist and music composer/publisher are paid. On the other hand, the label and its talent can snag more than half the cost of an iTune download.

Why is it important to record expenses?

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Starting Your Own Record Label

The exact steps you'll take to start your own record label depend on the state you're in. Each state has different requirements, although they tend to have many similarities. You can usually complete an application to create a business within a few hours, especially if you have help from a professional.

Deciding on a Business Entity

You can legally operate a recording business alone as a sole proprietor, but there are other business structures that provide personal liability protection. The business structures that give you this protection require more time and effort to run.

Pros and Cons

The main advantage of forming most business types is the limited personal liability the owners enjoy. In the event the company was sued for a substantial sum, your personal liability wouldn't be more than what you invested or any outstanding amounts on any share capital.

What to consider when starting a record label?

Here are a few things to consider: If you are starting a record label with the sole purpose of releasing your music, be aware that being both label owner and only artist on the roster brings some limitations. Even with the best intentions, your label runs the risk of coming across as a vanity project.

What is the process of running a record label?

It has been said before, but it bears repeating: running a record label is a learning process. When you commit to starting a label, commit to riding out the ups and downs. Sometimes things are going to go wrong, even if you do everything right. The trick is not letting the disappointments derail your overall progress.

Why is it important to have an indie label?

An indie label is a labor of love, so it is really important to hold out for some music you really believe in. When you've decided to start a label, you can feel like it's pretty urgent to go NOW. In the long run, waiting until you have a record you love and can't wait to bring to the world is worth it.

What is the best business structure for an indie label?

For most indie labels, the best business structure is one that is simple and that protects the partners from personal liability should something go wrong in the business. This is also the time to figure out how the company will operate, such as who will be responsible for which tasks and how people will be paid.

What do you need to start a label business with other partners?

There are a few general guidelines to keep in mind that apply everywhere: If you are starting the label with other partners, you will need a partnership agreement that details the percentage of ownership each partner has, how each partner can leave the business, how decisions will be made in the partnership, and so on.

Can a physical distributor work with anyone?

Some physical distributors will work with anyone, but your ideal situation is to land a distribution deal with a company that is selective about the labels they work with. These companies will actively get involved in selling your releases to the stores and will often help you advertise your releases.

Is it easy to make a label?

In some ways, it IS that easy. Some of the best labels have made it up as they've gone along. However, if you want to give yourself the best chance of success, not to mention protecting your investment, going through a proper set-up process is important. This guide will walk you through getting your label up and running.

Can you start a label for less than you may imagine?

But you can start a label for less than you may imagine. The trick is realistic expectations, and, most importantly, being willing to roll up your sleeves and get your hands dirty. In other words, be ready to make up for your lack of cash by devoting extra time to the label. Let's not get ahead of ourselves, though.

Can you swing a vinyl pressing?

Vinyl - depending on your reserves - and most importantly, your audience - you may be able to swing a vinyl pressing. However, don't invest in cool but unnecessary things like colored vinyl. There will be plenty of time for that sort of thing down the line.

Do indie artists need a lawyer?

Legal Advice for Artist Agreements. Many small, indie labels write very simple contracts without consulting a lawyer, but if you're not sure where to start, a lawyer can help you draw up a standard contract . Remember, though - you're setting up a small label, so you want to keep it simple for yourself and your signings.

How does running a label work?

As you can see, running a label takes a lot of work across the different areas of the music industry, from distribution and PR to marketing, sync licensing, and royalties administration. Get people on board who have the expertise and experience to help manage the workload and navigate unfamiliar terrain!

Why do indie labels turn a profit?

There is strength in numbers: many indie labels can turn a profit because of the domino effect. Once you’ve proved yourself as a solid partner, other indie artists might join the label through mutual connections.

How to keep your brand consistent?

Keep your brand consistent and tell your story. Your brand is essential: both to your potential partners in the music business and the audiences. So, you need to tell your story, develop your brand project, and keep all brand communication consistent across the board.

Is the music industry competitive?

The music industry is notoriously competitive, so just following the steps above isn’t enough to find success. You’ll need a cohesive strategy for building an audience and managing your artists. Here’s how you do it.

Do artists trust you?

Your artists are going to trust you with their life’s work — so being on good terms with them is a must. However, never agree to have an artist record for you when you don’t have a royalty and distribution contract in hand! Life is a bumpy road — and the music industry life is an extreme off-road track.

Is it expensive to run a label?

Running a label is expensive: it requires investing a significant amount into recording, promotion, touring, and more. Acquiring investors is easier if you have music artists with a proven track record of success.

Do labels own master recordings?

Even though the labels own the rights to the (or license) master recording, they still have to secure the rights to mechanically reproduce the composition by paying out mechanical royalties to songwriters.

The Role of Record Labels in the Past

Record labels, in the past, became a necessity in the boom of the music industry in the 20th century. Skyrocketing prices of pretty much everything related to making music meant that only those with an insane amount of money (or those with a clever brain for marketing) could afford to make music.

Do I Need a Record Label?

Depending on your needs and goals, getting signed might be on your list.

Who Can Start a Record Label?

Anyone. Chances are, if you’re reading this, you’re more than able to start a record label. It can be as simple or as complicated as you want.

Is Creating A Record Label Easy?

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