Starting a record label 101

[Barfunkel]

So, I might have some extra money in the near future and I've been toying with the idea of starting a small, vinyl only record label. I know I know, I'm probably just throwing away some hard-earned cash and will end up with an apartment full of unsold records, but still, it's one of my biggest dreams and I can deal with the possible monetary loss.

So, how do I proceed? I know some good musicians and there's a local company that can press the records, so I got those covered. My main concerns are in the marketing and distribution, particularly the latter. I know nothing about those. I can of course sell some copies locally, but Finland is a small country, the market isn't large enough to sell 300 copies, so I need some way to get my records in Decks, Piccadilly, Juno, etc.

I also know nothing about running a business (if you want to call it that), but as laws and regulations differ from country to country, an international forum like this probably can't help much in that department.

A specific question for those running a label: If you could start again, what would you do differently?

What other obstacles might come in my way?

[Barfunkel]

In before "don't do it man!" and "you're crazy!".

[Mslwte]

you're topic couldnt have come at a better time! I am currently in limbo as what to do next with regards to my bandcamp label.
My ambition has always been to release my music on vinyl, either myself or on another label. i have 2 (possibly 3) full e.p's ready to go but i dont have the guts to go through with it. It's a big expense and i have doubts if my music will sell enougha dn i dont want to have one vinyl release on my label thats failed and then decide that from then on ill just release digitally. dunno.
if it's gonna be done it has to be done properly and you have to be committed to doing release after release.

I have been talking with a friend who has offered to contribute 50/50 with the release but i am worried ill loose his money. (ive had previous with friends and family helping pay for a night i put on but we only just made enough money to pay the door staff)
I think setting up with more people certainly has its benefits.

distribution is something that confusses me. ive asked a few people about but im still not clear as to whether the distro company takes your music and takes care of everything like mastering, artwork, pressing/cutting and of course the distro but only gives back a small percentage of the sale. Or whether I arrange everything and send them the records and they just distribute.

[jordanneke]

My mate started a vinyl only label.

He was the money man, his mate was the graphic designer and the other was the talent.

They had some success with their 4 releases (big dj's playing their releases, decent reviews in RA), and they sold/ are still selling quite a few records (relatively)

But he pumped over 4 grand ukp into the venture (that I know about), and they had some proper connections throughout the scene.. (Djing in Fabric and the likes).

He lost most of the cash though, despite all of the above.

If you can wait a while, I'll ask him about the ins and outs.

[Mattias]

You dont really need to run a business for this sort of thing. Talk with a distributor and they'll fix it all for you when it comes to pressing and distribution. There are also "label managements" these days that takes care of much for you, if you wish you can basically just send them the music and artwork and they fix it all.

Also, if it's your dream then do it. You'll end up regretting it later if you dont.

[Barfunkel]

If you can wait a while, I'll ask him about the ins and outs.

No rush, I'll press my first record in August at the earliest.

[jordanneke]

Also, if it's your dream then do it. You'll end up regretting it later if you dont.

Agreed. Get that shit!

[jim_kezzle]

A few of my friends have recently set up vinyl only labels and had a few releases, it seems from talking to them that they tend to spend quite a hight portion of the cost on the distributors.
antoher of my friends is in the process of setting up his label and getting the first release out, he is thinking about going down the route of approaching various record shops himself to cut out the distro cost, and even if he only shifts half the records he will still get all his money back as the distro cost is so high. Although I would imagain the distro will get your records in more shops than you can get approaching them yourself.

[asm]

Talk to my friend Harvey at Veto. He knows all about techno vinyl distribution.

[Alume]

Also, if it's your dream then do it. You'll end up regretting it later if you dont.

Agreed. Get that shit!

[Críoch]

If I'd a stack of vinyl, I'd go down the calling into record shops route. Is that a crazy idea?

[Senko]

There's a bit of good info on the net regarding this. People tend to post their past failed or accomplished label ventures. From what I know, success comes from the actual business aspect and how it's run, in terms of finance and revenue allocation. A good background in accounting always helps.

Or if you just put out some banger tracks and get noticed

[Lost to the Void]

Well, I have some experience here, I have run a vinyl label both independently through distribution and also via P&D deal through distribution.

First thing you need to do is write off the money you are going to spend.
That`s it, write it off, expect no return, especially on your first release.

Next, don`t try to contact record shops directly, mostly they simply won`t bother, it isn`t worth it for them, if you understand how record business works you will understand why.
Somewhere like juno will maybe take 5-10 copies inititally, from a distributer (sometimes, selling this many records is all you need to top the charts at Juno, believe or not, so it makes those facebook "ooh look I`m no.3 in the charts suddenly something not worth boasting about ey?). Somewhere like juno will take x amount of records per label per distributer, and these will all be shipped together to the juno warehouse. So dealing with freight with individual labels is just not something they like to engage in.
So even if shops do decide to deal with you, you will be shipping small amounts to places all over the world, which will see your costs rocket.
Distributers send stuff in bulk, it is easier for them and you.


So, you need a distributer.
Reality check 2.
Distributers are asses. They are, primarily, salesmen, and inevitably difficult to deal with, you just have to suck this back and accept it until you make them a lot of money, then they become a little less difficult, but you have to remember you are just 1 of many labels they sell to pay their own rent, so don`t expect to be treated like royalty.

My advice is to contact some distributers first, send them the music before you spend a penny on cutting and pressing, and see if they will handle it. If they don`t think they can sell it, there is no reason to press it, you don`t want to end up with a front room full of vinyl that no one wants to touch.
If you are really lucky they might offer you a P&D deal, which will be crap, but it takes away the financial pressure on yourself.

Get a good cut, not necessarily who your distrib recommends. Some pressing plants offer mastering a pressing deals, and the deal might look good, but the pressing will probably be an almost automated process, and will probably end up flat.
Pay for a good cut, you are looking at £180 and up for an EP
For pressing you want medium or heavy weight vinyl

You are looking at around £800 for 300 vinyls plus mastering and labels (or less if you want to be another schmuck with hand stamped white label etc), not including shipping (shipping will be considerable)

You`ll need to sacrifice some of that vinyl for promotion. Don`t worry about DJ`s too much, they don`t sell records for you unless they are top of the tree DJ`s. You want to send promo`s to places like FACT magazine and other horrible but necessary places, as they seem to influence trend a lot now.
There is currently a renaissance of vinyl pressing going on, lots of new labels popping up, so I would say the market has become a little saturated again, so be really careful with your decision.
Don`t release in July/august. The market dies off during these months so it`s not the best time to release. Similarly avoid january, because everyone is skint, and too close to christmas, as people are distracted.

I can say with some experience that magazine reviews makes no difference to sales, back when I was shifting a lot of vinyl I also had reviews in places like DJ mag, Wax, M8, IDJ. And even when getting featured release or charted reviews, it seemed to make no difference than when not getting any, in sales terms.

Really, the music should sell itself. Send demos in mp3 to the DJ`s you would like to play it, ask them if they want vinyl, but I wouldn`t send vinyl by default, you are just throwing money away.

Don`t expect money back quickly. Sale or Return can take months for one release, as record shops take a while to clear sales and so on (and these days can go out of business quickly). So any returns you might expect, will come back way down the line.


You need to hit the ground running, so you`ll need the money for your first 3 releases, say £2500, and then you can release to get some presence, say, one release every 8-12 weeks, to keep momentum, if things look good by this (3rd release) point, hopefully your distrib can offer a P&D knowing your sales record, if not, well.......

I am not sure what the dealer price for vinyl is any more (what the distrib pays you). I think it is about £1.50 per record, maybe £2 But your costs on a 300 pressing will be likely to come to around £2.50 or more, depending on all the shipping charges, so you can see why you shouldn`t expect too much of a return.

Money can be made on repress, as you have already had your metal masters made, and pressing therefore will be cheaper, but I`m not sure how many releases go in to re-press these days, it seems that buyer attention spans are much shorter these days, so I`m not sure how much legs a decent release has before it becomes irrelevant, you`ll need to research that.

If you don`t mind committing your money in this way, then go for it.
My partner in Singularity keeps talking about pressing vinyl but these days whenever we get to the point of actually booking the cut, I just look at that money and find it is better spent on kit, and pull out at the last minute.

My feelings are only do it if you really really want it badly.

You don`t need accounting skills, it`s very simple, the shit either sells or it doesn`t, if you want real success then you need to engage in some form of hype to help draw attention to the releases.

[Contort]

Sticky? Would be a shame for info like that ^ to vanish in a month or so.

[Alume]

Very interesting LttV.

Only thing i can say as a vinyl buyer. Creativity and effort in the release as a concept gets me enthousiastic. You need to have something to say, and that shouldnt only be recognizable in your music.

[Lost to the Void]

Yeah personally I think it is worth making the release a collectors piece. Vinyl is so niche I think it is worth having nice art, or full print sleeves, or packaging with art inserts or something (I did this with the first singularity pressing.
Obviously this adds a lot to the cost, but if you are gonna throw the money away you might as well do it properly.

[TheBinaryMind]

Nice topic, I'm also doing some research on this. I sent an email to a distributor a while ago to ask what they needed if I'd like to release my own music on my own new label. They replied: send over some music, we'll talk from there. So I'm making some music now

I think it's the easiest way to start through a distributor that is willing to release your music and can also take care of pressing for you. The fact that they actually want to distribute and press it is also some sort of quality measurement I suppose.

Or maybe we should do some crowd funding on Subsekt and start a vinyl label from here Initial X releases need a buy-in from the artist, which will in return become one of the owners of the label and can therefore become jury member for future releases. Oh and we need a graphical designer for the artwork of course

[Planar]

No experience with this, but if it were me I'd have to be 100% sure the music I was wanting to press is exceptional.

Also, vinyl only is the cool thing to do and all, but please consider a digital release further down the line once sales have tailed off. Some of us have enough vinyl already

[Mslwte]

Thank you for that very informative post Steve! It has certainly got me thinking.

I think the next thing for me to do is to contact distributors and go down that route. Please if anyone can suggest decent distributors (especially in the uk) that would be cool! I've heard of "veto"

If we can get a list of all things label related here and there is enough info then we'll sticky this topic.

[Barfunkel]

Thanks for the detailed writeup Lost to the Void! That was very helpful.

I do expect to lose money.I will have some extra money next summer, money that I can afford to lose. I could always of course buy some new gear, but releasing music, not even necessarily my own (my music ain't quite that quality yet) has been a dream for a long time.