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Run Your Own Record Label (part I)

We take you through the ins and outs of running your own record label

Nowadays it's easier than ever before to set up an independent - and potentially lucrative - record label. However, with over 5,000 labels registered in the UK alone, ranging from one-man-and-his-dog outfits to the majors, competition is fierce. So what does an independent record label do? Well primarily it cultivates a number of acts, and these acts will sign a contract that allows the label to manufacture and distribute their singles and albums. In exchange for recording (and sometimes publishing) rights, the act will be paid royalties on every recording sold. The label may also provide money to promote the act as well. This might sound a bit complicated or expensive, but apparently it isn't as difficult as you might imagine. Sure, there's lots of hard work involved, and the phrase 'the longest overnight success' often applies. The big idea First and foremost will be the initial idea. Digby Pearson, owner, founder and managing director of Nottinghambased Earache Records, offers some insight from his decade-long experiences running an independent record label. "I had a 'Eureka' moment and thought, 'Why don't I put out a record?' Independent record labels aren't that difficult to set up. Get yourself a logo and a band that you're friends with who will give you a product to release, then basically you can call yourself a record label." Once you've got the initial idea to set up your own label it's imperative to register your label name. It could save a lot of potential legal hassles if things begin to take off, and registering your label as a company should only cost you a couple of hundred pounds. From this point onwards your record label is a fully-fledged small business. It's worth remembering that this game will be much easier if you're a fan of the music genre you will eventually be releasing, and can talk about it from an expert's standpoint, a sentiment that Digby cannot stress enough. "For an independent label to survive beyond the first few months you've got to be an absolute specialist. You've got to be into your scene 24:7. Pick a scene and be the best at it. This is the only way to survive nowadays, because everybody else is having a go at it." As with all small businesses, it's helpful to have some form of relevant legal grounding - in this case, a working knowledge of musical and copyright law. It's essential that anything you release, license or distribute (more about these subjects next month) complies with the Copyright, Designs and Patents Act 1988. If the songs recorded and released are not original, then permission will be needed from the publisher. The Mechanical Copyright Protection Society (MCPS) can provide the relevant documentation. You will also need adequate insurance for your premises - if your label expands and you want to employ staff,

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then Employer's Liability, Public Indemnity and other types of insurance will become necessary. Again, a solicitor or small business adviser will be able to assist here. "I would advise people to deal with the legal side of the industry very early on in their record label career," states Digby. "The best thing I ever did was see a specialist entertainments lawyer. They can advise you on all aspects of getting bands signed up to your label." Contracts and cost A recording contract is vital before any album is recorded, pressed or sold, and solicitors representing band and label will usually be responsible for this task. Once again, it's important to stress that having some form of legal advice is fundamental to setting up an independent record label. It may seem costly at the time, but when things begin to take off it could be incredibly advantageous, especially should a major label wish to sign an act you have on your roster. "Most people think it costs a fortune to set up an independent record label," says Digby. "This is a common misconception. You're in your bedroom, you've got your logo, and you've got this dream of releasing records. So I saved up and scrounged the money to get it [Earache] off the ground." There are government grants and loans available. A small business adviser at any local high street bank should be able to bring you up to speed in this respect. There may also be certain enterprise initiative schemes specific to your own local area. Yet again, an adviser can shed some light on these. The question you are probably asking yourself is, 'How much is it going to cost me to set up my label?' It's almost impossible to give any sort of exact figure for this. The following figures are just a few of the initial costs that you may be faced with after taking the plunge with your first signing. "Anyone can pay to have 1,000 records pressed," Digby volunteers. To manufacture 1,000 12" singles will probably cost between 600 and 1,500, with colour sleeve printing making up the majority of your initial outlay. For your first release it might be possible to cut costs by sticking to basic colours like black and white, or looking abroad to get your albums or CDs manufactured. On average, a CD single, complete with packaging, will cost around 1.50 to produce, and will retail at anything from 99p to 4.99. Your return will depend on what kind of contract you've negotiated with your act. Chances are, as an independent label, you won't have as much money to offer your artists upfront as a major like Sony will. The accepted practice is to offer a larger royalty than the usual eight to 15%. People power So you've made your first signing and organised the manufacture of 1,000 12" records, but running a label requires a multitude of functions to be fulfiled. When you are just starting out, it's more than likely that all of the work will be done either by yourself, friends or anyone else you can cajole into helping you out - at least until things really start to take off and you can employ 'proper' staff. So what roles can you expect to find on an independent label? Over to Digby for a breakdown of the Earache lineup. "There's me, the Managing Director and founder. I basically have an overview of what I want our music and bands to sound like. Next, there's the label manager Dan [Tobin], who does the real day-to-day work on the label. He organises the pressing of the records, gets them into the stores and hypes the records to the press and distributors all round the world. "Then there's the PR co-ordinators," continues Digby, "who ring up magazines to get our bands coverage. Also, there are the production guys who are responsible for the back catalogue, an accountant and a sales manager. And, not forgetting one of the most important roles, the A&R co-ordinator [who is responsible for signing the acts]." Once you have set up your label and signed your first act the hard work really begins, because you will then be faced with puzzles like creating a reputation for your act(s) or, more importantly, getting their recordings into the shops. We'll be covering those subjects and more in part II. Rob Turner & Phil Strongman 09/00 Read Part 2 here
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