Encyclopaedia Metallum: The Metal Archives • View topic - Want to start a label. Need help!
Want to start a label. Need help!
I have been tossing with the idea of creating a label lately.
But, I have some doubts about the contracts. Which benefits for the artist/band does a typical contract contain? Here, in Sweden, the royalties for the artist/band are paid through NCB but it feels way too low.
If you are signed to a label (you need not to mention it) please share your experience and please comment on how things can be done in a better way.
I want to focus on helping artists/bands get their music out.
I've worked with a few labels, and just recently started my own label as well, so I can give a quick overview of how things generally work in the underground (not talking about bigger names like Nuclear Blast or whatever, those might have different arrangements).
Let's a say a band wants to release their new album with some label. Typically, they will receive royalties in the form of free copies of their album, in most cases 10-20% of the total production. So if the label wants to press 500 CDs of the album, the band would get 50-100 CDs for free, which they can sell and make money that way. That's the preferred way of working for most underground labels, and it kinda works for bands as well, since they can sell these copies at shows, on bandcamp, and so on... If the band needs more copies, the label can sell it to them at some low price.
In addition to this, some labels also add a promise of paying a cut on the benefits they would make on this album, after they have recouped their expenses. So, if the label spends 1000€ on album-related expenses (pressing CDs + promo + ???), and after x years, they sold enough CDs to get 1200€ in total revenue from this album, the band would get some percentage of the 200€ net benefits (can be as high as 50%). That's a nice to have if the album sells very well, but in practice there's a lot of underground albums which never reach break even.
Lastly, in some cases the bands refuse to work with free copies as a form of payment. This is mostly the case for solo projects who don't play live, and don't want to be bothered shipping out CDs and stuff. In these cases, a flat fee can be arranged. The fee is typically paid upfront to the band, and is negotiated on a case by case basis. I don't have a lot of examples for this so I don't know the typical sums involved.
You can make trades with other labels to carry x amount of their stuff in your distro while they carry x amount of theirs if you have a distro. My label does not record any music for bands unless it's my own personal projects and I will let the band record things however they want if we agree to a release. The only deal that was made before the music had been completed was the first release, but I prefer when bands have stuff already and just want to have it released so that the music is genuine and not rushed.
Everything I've done was as a hobby and for my passion of music, if you want to look at making a job out of a label listen to Jabawock, but if you care more about doing it as a hobby still listen to him, but remember that a lot of things have to do with clearly written emails and messages to the bands/musicians that state the terms of releases. I never sign bands to the label so that the bands have a little freedom.
One important thing to keep in mind is promotion, your sales rely on how well you market the release and get the word out. If you or someone you know can make you release quarter sheets and leave them around at record stores, coffee shops, venues, ect, that's a great way to get the word out, but also having an email list is great as well. Don't be affraid to put your ads anywhere you see possible. There's always some death metal person who wants something cool to look at when their friend's drag them to the laundry mat or something. I will admit that promotion isn't my strong suit but I do great with site sales and face to face promotion.
As a manager you might be put in a tough spot where $180 worth of CDs got lost in the wrong country via transit and you have to step out of your comfort zone to get those CDs reprinted and made within the next couple days to get them to a band in time for a tour, I've been there and it was rough, but I kept to my responsibility as a manager and the terms I made with the band. On that note learn your country's postage rates and remember that it will differ when you ship out of country. I've used discogs as my primary distro front for years until recently and it actually equates postage prices for you which is great.
Good luck and don't let small numbers bring you down, it takes a while before you start seeing a profit with a label unless you can tag along with the band of your first release on shows and work the merch booth.
Thank you so much for your extensive replies Jabawock and Big_Grand! I will probably start the label in february next year.
If I get it right the label has to pay royalties to the band per quantity pressed. This is about 240-350€ for 500 CDs. How many CDs should I give to the band apart from the amount mentioned above? I would say that 10% is fair. What do you think?
From what I understand it is prefered to sign a contract so that the band can get 20% of the copies and then a certain percentage of the profit after break-even when working with bands outside Scandinavia.
I have mostly thought about working per release with most bands as described by you guys.
I would ask the band how many they want for their shows or tour. Some bands might want 100 of the 500 CDs for their tour, some bands might want more, some bands might want 30 CDs because they only play a few locals shows here and there. Especially for bands outside of Scandinavia they may be willing to take a larger portion to put around record shops where they are from, it really comes down to what you agree to do with the band. Do take into consideration to work with your local record shops as well, they will take a stack of CDs generally and then keep a portion for themselves, but while you might not make as much as if you sold them in your own distro you will get the promotion.
1) What happens with the sales for digital format? I mean, if the label prints the album, will the band still be allowed to sell the mp3's online?
2) If the band gets it's share of cds, would the band be allowed to sell them online?
Proof of my forum addiction: I've been member since 2004, and yet my forum status says "Metal Newbie".
The general answer to your questions is : it all depends on the agreement between band and label. I mean, labels can work in many different ways, and offer different conditions to bands.
If you're talking about selling digital downloads on Bandcamp, there are very few labels in the underground that would prevent you from doing this, so in general this is perfectly fine. If you're working with some major label, there could be such restrictions though.
Same as above, in most cases that's a clear "yes".
In general, that's not how it works. If your Italian label says it will release your CD, they intend to release it worldwide, and will do their best to distribute it as far as possible. If you would like another label to release the same album in a specific geography, you'll have to ask the Italian label if they're ok with it, but I would expect they decline. Unless it's another format, for instance if another label wants to do vinyl or cassette, then depending on your agreement with the Italian label, it could be perfectly fine.
Or they could also do a co-release with two or more labels involved, but those things are decided beforehand, and not after the album is out.