How to Start A Record Label Business

By Kari Andrews

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record studios

There are only a couple of things in the world that are universal; with one of them being music. It is something we can all understand and feel no matter what language we speak. Some people have a raw talent in either creating music themselves or finding the talent that can.

Have you ever caught yourself humming along when a song comes on or wonder how one artist (probably more like a couple) got a record deal?

Have you thought that an artist has visual appeal but think they lack the formal training?

If you would like to resolve any of these complications above, setting up a record label on your own and selling your music to people is for you.

How Big is the Record Label Industry?

The record label industry is big no matter what century it is and there is opportunity to both promote and distribute music everywhere. It is a $360 million dollar industry today. The top three largest markets to produce and sell music are in the United States, Germany, and Japan. These three countries have their headquarters all situated in North America. New artists are always getting discovered across the world. In the next few years, various new business strategies and models are expected to emerge.

Why Starting A Record Label Business Now Is A Good Idea

Society has come a long way, and this industry is a big reason we have been breaking all sorts of barriers. More and more people are prone to being accepted by a large mass of people. There is also currently little investment needed to get started. Personality is key, and a large range of connections are essential, which is easier to get today especially with social media. It is what will help you win clients and sell your music. There is no better time than the present.

Record Label Industry Business Facts

Record Label Business Startup Costs

 As little as $200 to get started at home to as much as $50,000 for a recording space.

How Much Do Record Label Businesses Make?

If you are successful enough you can make between $20,000 to millions of dollars per year. What you make will vary with the content you sell and how many people buy it. The positive thing about working in this industry is that your income will be residual, and you will get paid for what you produce years down the road so long as people continue to buy it. Whether you start full-time or part-time will also have an effect on the amount of income you make.

How Much Do Record Label Businesses Charge?

You will be charging for the music you make and set a price for people to pay if they want it. Will you sell your content through physical CDs alone or online too? Will your customers be required to buy the entire album of music or can they pick one song at a time? When you are setting a price, remember that it should include costs of what it took you to produce it and be able to pay your client, if palpable. You should also look at your competition to see what they sell their music for online or in stores. For example, you could sell an entire album for $20, whether it is bought physically or virtually, or sell each song for $1-2 online through sites like iTunes and Pandora.

What Do I Need to Make Music?

You will need to have a room or a studio where you will create songs. Other than that, you will need to set up your equipment for mixing and processing your content. You will need microphones, cables, and monitors at a minimum.

Can I Start From Home?: Yes

Average Startup Cost: $200 – $50,000

How Many People Work In The Industry (US): Over 2 Million

Average Earnings: $20,000 – 1,000,000 a year

What Skills Are Required?: You should possess an ear for music and know how to train talent or produce music for your label. The skill is often simply innate.

How Do Record Label Businesses Find Customers?: Your customers will be everywhere around the world from people who listen to your music and purchase it when it is sold.

Detailed Startup Costs

Recording Space: $500

Microphones: $100

Monitors: $300

Mixers: $800

Audio Interfaces: 1,000

Cables: $600

Total: $3,300

Record Label Business Ideas

The best thing to do is set up a plan and find out what music genre you wish to work in and if you plan on doing things solo. As a new record label artist, you should also think about whether you will sell physical or downloadable content. Remember to create a name for yourself and choose one that embodies your label. You can also establish a look, such as making a logo and a brand identity. The best way to get yourself known is to build a website afterward. Social media and websites are popular today and will be a primary way you get discovered. It will be where you want to communicate with everyone on your releases, videos, gigs, and how they can get your content. Although this should be obvious, when you are producing your music, remember that all your tracks should sound professionally done.

Starting solo

Investing in worthy equipment

Record Label Business Names

Rhythm Sounds                                                                                                       Soulful Records

Metal Rap Music                                                                                               Heavy Pop Records

Jazzy Songz                                                                                                          Power Hits Music

Smooth Sonic Jam Entertainment                                                          Young Beat Recordings

Insane Hustle Music                                                                                      Slick Box Recordings

Twisted Beat Entertainment                                                                           Sexy Crystal Music

The Thunder Cube Record                                                                 Raw Stereo Entertainment

Youtube Videos 


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How to Start a Record Label: Introduction and Basics

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