10 Steps To Starting A Digital Record Label

Record label

When you start your own record label, you start with a blank page. From the music to the branding to the business side, you need to get it all right to succeed. Here’s how one label did it…

So you want to start your own record label. The first question you need to ask yourself is: Why? If you’re pursuing this to make money then you may want to think again!

However, if you love music and you want to broaden your scope beyond DJing, producing and running club nights, then setting up a record label may indeed be your calling. Whatever your reasons for creating a label, you are about to embark on an epic journey. So without further delay, here are our 10 steps to creating a record label.

An introduction to us
Before we get started we should say we’re not industry “experts”, nor are we high profile DJs or producers. We’re just three best mates who love the music. To give an idea of our backgrounds, we’ve been into dance music in all its guises for most our lives, and techno for a good amount of time; we’ve all DJed at various points (but nothing overly serious), and one of us has previously ran a digital indie dance label. This previous experience has proved invaluable…

You may not agree with all of these steps – in fact, they may not even be “correct” – but these are the steps we have taken in creating our label, Baptism Records. For us, it’s been so far, so good.

1. Choose a label name

This step is huge. This name will stay with you on your journey and become everything you live and breathe. Finding a name takes a lot of time and research. There are over 7,000 labels on Beatport alone! Our criteria for the name was something unique, suited to the sound we were aiming for, and easy to build a brand around. We thought of numerous names and we found one we agreed and loved; however, we had to check Google, Facebook, Twitter, Beatport, Juno, iTunes and many other sites to make sure this name was available.

Ideally you would want something that is also quite easy to identify in Google, so that when people search for the name it appears high up their list. In our particular, case “Baptism Records” has millions of hits related to Baptisms; whether this impacts us in the future, only time will tell.

2. Build your brand

Building a strong brand in this day and age is the difference between selling thousands of records or just a few copies. It shows you’re professional and take things seriously, especially when you’re trying to sign tracks from bigger artists.

We commissioned an artist to create our logo; we knew what we wanted, but none of us are Photoshop experts (if you have a graphic designer in your ranks then you’re going to save a lot of money…). Be honest: How many labels have you seen with some dodgy Photoshopped logo / artwork? Do you take them seriously? Would you take their music more seriously if they were that bit more professional?

3. Create an online presence

The explosion of social media provides many opportunities but allows you to get lost in the midst of the millions of pages. We created a Facebook Page, Twitter account, Soundcloud presence and our own website. Setting up a website is relatively easy: You find the URL and buy it from someone like GoDaddy, you find a hosting provider and point the URL at it, and you build the site. We use WordPress to administer our site which makes life a lot easier, and you can buy an off-the-peg template from somewhere like ThemeForest and slot in your logo, altering the colours so it all matches, if you wish.

ThemeForest

You can buy website themes for WordPress ‘off the peg': Add your own logo and you’re done.

You’re going to need some help with this if you’re not web development savvy, but this is a highly cost effective way of doing it, even if you do need to buy in outside help. The important thing however you do it, though, is to keep things neat, tidy and professional.

4. Build your fanbase

Arguably the hardest step and the most important. How else will you attract artists to be a part of the label and ensure loyal fans support you and keep coming back for more?

We can’t give a definitive guide on this as it’s something we are still learning every day for ourselves. It’s a bit of a vicious “triangle” so to speak: Without the fanbase how do you attract artists? But without the right artists, how do you attract fans? This takes time and is not easy.

Start by getting everyone you know to join and help promote your various sites be it Facebook, Twitter, SoundCloud etc and build from there. Try and approach blogs to do a feature or interview – anything to get the word out and try to grow your following. Ensure you regularly interact with the fans you do have on the various social network sites; don’t just spam them. We have found a more friendly, personal approach has allowed our fanbase to steadily grow.

?5. Focus on the music

This stage obviously depends on what you want to achieve. If you are looking to release your own music then you are going to need a strong fanbase already for your productions. Even though we can produce our own music, we agreed that at this stage that this was not a viable option. Loving music is why we did this and we knew the genre well. So we sat down and thought of artists we love and whose music we felt epitomised Baptism Records. We approached artists by email using a template like the following:


Hey ___________,

We’re a brand new label launching in late 2011 focusing on tech house / techno. At Baptism we are striving to create a strong brand that will enable us to push artists we have signed, and to do this we will be signing several “big names” and working extremely closely with DJs and producers.

We love your tracks and your sound and are extremely interested in signing something from you for release. If you could please get back to us with your availability it would be greatly appreciated.

Thanks etc.


We wanted to keep the email pretty informal / friendly but also convey we were serious. We received numerous “no thank you” replies, but the key is to remain amicable and leave things open; many of the artists who turned us down originally are now emailing us with demos.

You have to think about this from the artists’ point of view as well as your own. I mean, would you fully trust a brand new label with no track record and no releases? Of course you wouldn’t! So the key is to build up relationships that may allow you to work with the artists in the future. Again a lot of this depends on what you want to achieve. Do you want to sign unknown acts, known artists, would you like remixes etc?

Generally unknown artists are paid solely through royalty cuts, ie they get a percentage of profit from tracks sold. But if you’re looking to sign bigger and better-known artists to the label, chances are you will have to pay an advance of royalties or a flat fee for the privilege. The same can be said for remixes; you may get unknown artists to remix for a royalty percentage but bigger artists tend to go for a fee.

We obviously can’t divulge how much we pay our artists or if they are on a royalty split but suffice to say if the artists you are looking to sign regularly chart on the likes of Beatport you can expect them to charge for their services.

Everyone can research who you are these days so you can’t bluff it. Anyway, if you’re at this stage then you’re doing well!

??6. Set up your promos and mailing list

This is quite a hard step when you first start if you have no contacts. You can build your own promo list by approaching agents / managers / artists and explaining your goals as a label, possible signings and asking if they would like to receive your promos etc but chances are, you will either get ignored or given a generic email to send the promos too and you will never receive any feedback.

We would advise you strongly think about using a PR company, especially when you first start. This will allow you to get your tracks heard and hopefully played by the artists supporting the style of music you put out. Our distributor (see below) offers an excellent promo package that we use and it has enabled us to gain strong support even prior to release of our first track, with many tastemaker DJs supporting our tracks.

7. Get your digital distribution in place

This is how you get your music to all the different online stores. You can cut out the middlemen and distribute yourself but you may find it hard to get onto certain stores, particularly Beatport, and to be honest it is a bit of a pain making sure all your releases are sent to all the different stores, especially if you are a small team.

Press & Play

Picking a company that specialises in distributing the music you’re promoting is a smart move.

This is probably one of the most important steps, deciding on and being accepted by the right company. Research who is distributing your fave labels in the genre you intend on releasing and approach them. If you have all the above in place, ie name, brand, web presence etc, then it will show you are serious and committed.

Distributor rates vary but are typically between 15 and 30% of sales. It may seem a lot but we definitely advise you go with a reputable distributor and don’t just go for the cheapest option; we’ve heard horror stories of labels going under due to not receiving payments.

We settled on Press & Play as they distribute some of the biggest techno labels around.

??8. Keep on top of the admin

Not everything can be fun. Listening to loads of techno, creating something from nothing and seeing it grow, and listening to music only a handful of people have heard before is the most exciting thing about running a label, but without good administration skills things could easily spiral out of control.

If you are working in a group from different locations, then use the cloud. Dropbox is a great free service that can help you with storing your documents in a well-structured format. Every expenditure needs to be recorded or you will lose track. This also allows you to budget correctly before things get out of control. Every track you sign should be accompanied with a contract. There are multiple formats of contracts which we can’t be covered in this article. Google “Record Label Contract Templates” and you will soon see the daunting world ahead of you!

Manage your inboxes, reply to all emails, messages you receive on social platforms and so on. Update your website and keep it fresh, post links and find out who is talking about you on the internet and share it all with your glorious fans. You want them to feel a part of this journey too.

9. Handle the launch

If you’ve got all the above in place then this part is all about hammering the hell out of all your promotion options – Facebook, Twitter, Soundcloud, promo / mailout lists, magazines etc. The more you do here the better.

10. Plan for the future…

This is the stage that hasn’t happened, which is where we’re at! However, I can tell you that we have our next six releases ready. We wanted to be fully prepared for what lies ahead to allow us to guide the direction Baptism will take. We have a few ideas of increasing our fanbase but really we just don’t know what is going to happen? A Baptism Records showcase night with great DJs? A dastardly plan for Beatport domination? Only time will tell…

Finally…

We wish you all the best if you do decide to take the leap; please feel free to drop us a line and we’ll be more than happy to help where we can.

• Craign Aitchison is one of the founders of Baptism Records. You can follow the label on Facebook, and techno producers can send submit tracks via SoundCloud.

Would you consider setting up a digital record label to further the music you love or even your own DJing career? Have you done this yourself? Please let us know your thoughts in the comments…

Comments

  1. colin reed says:

    many thanks!

  2. I do have one question, though…

    Don’t you have to own a local company in order to run a label?
    After all, it IS a commercial business.
    And if so, what about accounting and taxes? :)

    I’m interested in opening a label for two years now, but nobody helps with matters that are under the radar such as this.

    • I can answer that – yes you really should. It’s not hard to set up a company in most places, and it’s not hard to learn basic bookkeeping (basically, keep every receipt/invoice when you spend, and issue a receipt every time you are paid). Get an accountant to file your accounts with the tax authorities – they’ll save you more than they cost in the long run. Unfortunately, NOTHING stays under the radar of the tax authorities forever.

  3. Hi 3wishes,

    We were going to include details on the company formation aspect but as the readership of this site is global we wouldn’t be able to give a definitive guide. As mentioned please feel free to drop us a line if you have any questions though and we’ll do our best to answer.

    Thanks,
    Baptism Records

    • I just wanted to know if it’s necessary. That’s all.
      I know how to set-up a company in my country, it’s not that hard. Only that it requires an additional investment, besides the label. :) Anyway, I checked out your website, looks good. If I ever make anything in your musical range I’ll be dropping by a demo.

      Peace,
      3w

    • Hi,

      Exactly how would I go about registering an independent digital label in the UK? If I were to do business as a sole trader, do I only have to open a sole trading bank account, and register with HMRC?
      Also – If I already have a sole trader bank account that was originally open for a business(which didn’t really start) would I be able to just use that account?

      Hopefully my questions make sense.

      Thanks,

      Sean

      • I am no lawyer, but as long as you fill in an accurate self assessment for at the end of each financial year, and keep all your receipts, and keep your business and personal money apart, I’d think you’d be OK.

  4. Good article.

    It is very easy to understand the role of label, distributor, etc. in the days of vinyl. Now, it seems a little redundant to have to pay a distributor to put your tunes on beatport.

    Building a brand around your label with the kind of music you enjoy sounds fun. I don’t see why you couldn’t take the additional step and distribute your stuff as well.

    • A very good point. Unfortunately it is EXTREMELY hard for independent startup labels to get onto Beatport.
      I do think we could have managed it though because we have a solid brand and the artists we have signed but can you imagine the hassle of uploading all your releases/metadata/artwork to EVERY store, on time, every month? Then having to deal with the accounts side of things every quarter? If you had enough free time or indeed a big enough team then ofcourse it wouldn’t be a problem, but like us, chances are this wouldn’t be full time and your sole source of income so you would really struggle.
      I’m not saying it’s not possible but for me the admin would just become a royal pain in the bum and all the fun would be sucked out of it. Maybe we’re being a bit naive and lazy but we will be reviewing how we run things after the first few quarters so we may well yet distribute ourselves :)

      Thanks,
      Baptism Records

  5. This post is a signal. I have been time thinking about start a digital label. I believe that the moment has arrived.. :)

  6. Slightly off topic but didn’t know where to post, sorry but… is there a decent one stop source for free downloads? I mean proper ones, somewhere that collates the giveaways rather than the unbelievably time consuming trawl of Soundcloud etc?

  7. colin reed says:

    @baptism records,i’m new in this bussines and i would like to know,just some details,about how much the record company gets and how much the artist?can u give an answer pls,thx!

    • That’s very dependent on the deal agreed between the two parties and every deal is different. Sometimes a flat fee is paid and no royalties, other times it’s an advance fee and a percentage of royalties once the label has recouped the money they paid for the advance and other time’s its a straight royalties cut eg the label takes 50% of profits and the artist takes 50%. There are looooooads of variables so i’m afraid i can’t give you a definitive answer, sorry.

      Thanks,
      Baptism Records.

  8. BelgianJungleSound says:

    Checked you out on soundcloud, and it’s nice to finally listen to some good Italian producers :-) The only guy I new before was http://soundcloud.com/i_am_arpxp

    • Great! Glad you checked us out and like what you hear :)

      There’s some awesome Italian based techno artists around at the minute and in fact our first 3 releases are from Italians so you can say we’re BIG fans.

      Thanks,
      Baptism Records

  9. @baptism records,
    Is there any significant difference in choosing “Records” or “Recordings” after your label name? Which one is more common or more professional?

    I’m looking to start a parent record label and a few sub labels. I want to set this up once and I want to go all out. With minimal expenses I want to register the business (the parent label), and also register a trademark. I did research the different business types but I couldn’t determine which type would have the least amount of yearly fees/taxes. Note that I don’t intend to make profit from this label. To start, I want to have a formal submission (including record label reference) when I send in tracks to the copy-write office. Suggestions? LLC, Partnership, Limited Partnership? I only know that setting up as a sole proprietor is risky because any debt brought on by the sole proprietor, they are responsible for it.

  10. That’s a very long path but it is the truth. Building a brand is hard work and time-consuming, and surely need a team.
    Thanks Craig!

  11. I have just started my own record label and I already got the distribution side sorted, however I am looking for a recommendation for a service provider that will send my music to djs directly that wont cost the earth. They should also specialise in House/Dance music.

  12. My best advice I can give to someone starting a label … If you can’t launch your own career then don’t expect to launch another person’s career . All of these are very good essential tips , but owning a record label is easy ; however , running one successfully is a completely different story . I would find an artist to launch first , and build your platform for success around that artist . If you can’t get him in the air then you won’t stand a chance .

  13. Wicked article, thanks!

    I’m currently collating as much info as possible before beginning my business plan on starting a digital record label. Its nice to find a coherent and strait forward explanation on how it all works!

    Thanks again :-)

  14. Great Read! Thanks! I am in the process of FINALLY starting my Digital Label and this pretty much touched on everything that I needed to know! Once again thanks and good luck..
    OH YEAH! Lets start this Promo/Mailing list : ) feel free to email me @ musik.lyfeMG(AT)gmail.com lets network!

    Nelson “NdotJay” Johnson
    Owner @Musik Lyfe Music Group/DecemberNineteen85 Publishing
    ALL Genres Of Music!!!

  15. Great informative article Before launching your business, it is essential for you to research your business industry, market and competitors. http://recordlabelhq.com/businessplan

  16. hi

    i have not set upmy label but have one problem before i get going,, contracts,,,ive never even seen a digital contract fo the artists,, can you help?

  17. Nerdys Case says:

    What was the outline of your plan of your label for one year to beatport? I don’t know where to start.Please help.

  18. Great article! I have recently set up a digital label myself and have encountered a few of the points you mention. There’s also plenty of food for thought going forward too

    Will check you out on Soundcloud now!

  19. sammsousa says:

    great great article! i have been interested in this subject for quite some time now… i hope somebody will still read this coz i have some questions! i dont know if trademarking is the correct term, but just like you (should) have the rights to the name of the label, as a producer, wanting to sell my own stuff, i should trademark my songs, so i have the rights of them aswell right? but lets say i sign some songs from another artist, does the label own the rights, or the artist? or what are the most common situations? my other question, also regarding copyright, is sampling! i think that you have to clear the sample right? but does the label (that owns the original) have the right to decide how much money they get, etc? and im shure lots more about sampling has to be said…

    any feedback on any of the subjects would be much apreciated
    thanks again por the post, really inspired me to actually start doing something!

  20. I started my own too :). AVLmusic @ soundcloud
    Im also beatport partners :D:D:D

  21. Hey

    Its been my goal for a few years now to release myself as well as current Dj/Producers/Vocalists under a Label i want to start next year for the latest. My question is directed @ Baptism Records, can I establish the Label online while the physical company registration is in progress? or do I register the company 1st.

    Well I am doing this on my own because I don’t want any funding or grants just plain myself and the team.

  22. Thank you so much for this one!

  23. Hi! Thanks for the tips!

    I’m thinking about starting a label for mainly progressive house. The reason I want to do this is because there are so many great producers out their that don’t get the exposure they deserve. The problem is that I don’t have a lot of funds. Is it okay if I just manage it from my bedroom on my computer or is their a lot more to it than that?

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