Starting A Record Label. Part 1

HHello readers, let me give this column a brief introduction. After a brief discussion with the site Editor, it was decided that a series of columns was in order. The focus of these columns is business, a running diary of an underground label starting out in small town Kansas. I invite you to keep up with it as I hope to share some of the experiences that pop up involving everything from recording and recruiting to distributing and promoting artists.

First off is the official formation of a business. Fortunately my location allows single proprietorships without any paperwork, so I don’t have to fill out any forms to operate a business.

Next up comes the more music-specific business items. I’ve got at least one act who is interested in recording and releasing music on my label, so I’ve got to figure out what I have to do legally to protect mine and their rights. We want to make sure that any music we make is going to be protected from would-be intellect thieves, so we’ve got to register with a provider who is going to issue and protect copyrights. Copyright registration can be done electronically (copyright.gov) for $35, a fee covering all of your works (as the songwriter — form PA). If you’re the publisher you also need to fill out another form, form SR. This doesn’t need to be dealt with until you’ve produced original lyrics, but you can’t forget this step. After a copyright is issued, the next step is to register yourself with BMI, SESAC, or ASCAP. They’ll do the dirty work protecting your copyright, but again you’re going to need to pay both a songwriter fee and a publishing fee to get protected for five years.

Photo credit: El Mariachi 94 on Flickr

Now, you should be protected by copyright! What needs to be figured out next is how to record the album, physically manufacture it, and how to distribute it. Here things have become much more streamlined in the past few years. It’s quite easy to find bulk suppliers of blank CDs, cases and CD labels. For a thousand dollars you should be able to set up a mini-manufacturing facility, ready to press professional-looking copies.

Staring you in the face is the prospect of distribution. Physical distribution companies are no longer nationally-independent — all nation-wide distribution companies are owned by their respective record labels. That’s one reason the music business is so domineering and top-heavy, because distribution channels are mostly clogged up.

The good news is that online distribution is a much simpler affair. There any aspiring artist can have an album distributed for anything from $45/year to a 9% royalty. After much research, I decided to use Tunecore to put up music available for download online. Other options are Songcast and CDBaby. Tunecore also provides a free UPC generator, something we’re going to need if we sell CDs in stores.

So what’s left is the task of promoting and distributing the CDs we make. This is going to require a lot of footwork on my part, but this shouldn’t be too hard. I’ve got to work at securing gigs and talking to individual store managers to get my physical product in. This is where I’m at right now — I know what needs to be done, but I’m a long ways from engaging in the entire process yet. That’s as far as I’ve gotten. I’ll keep you updated — I foresee a company web site in the future — but until next time, stay classy.

Ben Histand is a fourth-year Business student with an interest in finding out how pop culture works, and has spent entirely too much time finding out how Marvin Gaye is the same as Led Zeppelin, and why Led Zeppelin sold a whole lot more albums.

Read more: Starting A Record Label. Part 2: Who We Are