Here is How Others, Just Like You, Have Made a Lot of Money by
Starting a Record Label
by Ty Cohen
Published on this site: May 24th, 2006 - See
more articles from this month
A virtual Renaissance is going on right now in the record label
industry, because space, volume and distance are no longer obstacles.
Recent changes in technology have opened the playing field to Indies.
The Internet age has made life easier for Indie record labels. One
can take orders over the internet, distribute songs in MP3 format,
which makes it easier for street musicians, small rock bands, or
Indie label owners to make their music available to the masses.
Recording equipment is decreasing in size and price daily. One can
put together their studio right in their own home, or in a rented
space, for surprisingly little money. Fully equipped studios for
rent are also available in most cities. Priced at approximately
$150 and up per hour, one can use a local studio without having
to establish one of their own.
So why wait. Today, starting a record label is easier than before.
With sufficient preparation on the industry, one should be able
to break into and succeed in this highly lucrative field with confidence.
How lucrative is the field, one may ask. Lets just say it is very
lucrative. The global music market is approximately $40 billion
to $48 billion in gross worth. Thirty percent of this worth belongs
to the Indie record labels. That is approximately, $12 to $16 billion.
The Indie record label is not only attractive to entrepreneurs,
but to artists. Artists signed by major record labels typically
earn approximately $1 per copy sold. Whereas, an artist signed by
an Indie record label typically earns approximately $5 per copy
sold. The end result is more artists wanting to work with Indie
records labels, which equal greater profits to the Indie record
labels themselves, due to a higher volume of sales. Case in point,
last year Indie record labels sold over 900 million units. Simply,
being an Indie record label, one will have a higher rate of return,
because the artist will see more profit per unit sold than they
would if they were with a large record label.
Breaking into and succeeding in the Indie record label industry
is becoming easier by the minute. Once one has established himself
as an Indie record label, he should do the following in order to
take his business to the next level: outsource the duplication master
copy; find a major distributor to distribute your label; start your
own studio; and scout for creative talent. Once one has accomplished, the prior four steps, than he is on his
way to a lucrative business.
Just remember like any new business, there will be bumps in the
road. That is why it is important to do your research beforehand
so that you can prevent many bumps.
Before starting your new Indie record label, make sure you have
considered the following points:
- Answer why would someone want to buy your music.
- Prove that there is a current market for your music.
- Learn the basics about copyright law.
- Learn about mechanical royalty.
- What is your goal for starting your own label?
- Have you registered your new company?
- Will you need any record producers/engineers?
- Know beforehand where you will get financing for the start-up
costs.
- How will you market your label?
- Learn the distribution costs.
- Learn about the costs to manufacture CDs, etc...
- How many copies will you need to manufacture per release?
- Are "package deals" right for you?
- Do you know how you will go about finding new acts to sign
to your label?
- Do you know of any graphic designers?
- Do you have your own barcode?
- Do you know how to write a music-marketing plan, a distribution
one-sheet, and other promotional materials?
- Who are your customers?
- What specific information should go on the cover, back cover,
spine, booklet, and on the CD itself.
Once you have answered the above, then you are on your way to starting
your own Indie record Label. Have fun and good listening!!
Ty Cohen is the acclaimed author of over a dozen best-selling
music industry "How to" books and courses. Grab a copy
of Ty Cohen's latest book title by visiting http://www.MusicBooksByTy.com
and to learn more about starting or turning your existing record
label into a world wide, profit pulling record label visit: http://www.TheUltimateRecordLabel.com/landing_page.htm
Start a Record Label Today!
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