An independent record label handles almost everything when it comes to producing and selling an artist or group’s music. It oversees and coordinates the production, manufacturing, distribution, marketing and promotion, along with managing trademarks and enforcing copyright.
Some delve into talent scouting and the development of emerging artists, too. While the major labels, such as Warner, Sony and Universal, always used to rake in all the cash, independents – covering all genres – are now popping up everywhere.
Recorded music is a sector that’s still growing. According to a Goldman Sachs study, annual global revenue from recorded music (physical, streaming and downloads) is set to rise to $45 billion by 2030, up from $21.6 billion in 2020. The same study showed that Gen Z and millennials spend more of their budget on music than any other age group. Although a lot of that goes on streaming, formats like vinyl continue to experience a resurgence. The latest figures from the Recording Industry Association of America show that the value of vinyl sales in the US rose from $479 million in 2019 to $620 million in 2020.
One of the advantages of launching an independent label is the ability to carve out space for yourself by focusing on specialist and niche music. ‘Independents are positioned as tastemakers that build whole genres and communities around releases,’ says Sara Al Hamad, business affairs manager at the Association of Independent Music and co-founder of record label Rika Muzika. If you have the passion for and knowledge of a specific genre, artists and groups are pretty receptive to working with you – especially considering that they’re likely to be offered a lot more creative freedom than at a major label.
Knowledge: First and foremost, you’ll need a deep knowledge of music and the genre you’re hoping to move into. Seeking out industry expertise will be essential for the more technical elements.
Cost: Record labels can start on a shoestring budget, which will vary depending on the equipment required and functions performed. Online business advisor Profitable Venture suggests a small label can get moving for about $20,000.
Space: This is a business that you can actually start from your bedroom – all you need is a laptop.
Before you start looking for unsigned artists to tap or begin to design record sleeves, there are a few important considerations you’ll need to be clear about.
How are you going to fund it?
When it comes to capital, you’ll need to figure out your genre and audience, and look for relevant organizations that can support you. ‘Networking and staying in touch with industry trends are the first and most important steps to finding funding,’ says Sara.
What functions will you perform?
There isn’t one playbook to follow, but you’ll be expected to diversify the roles you do. For example, UK label Black Acre, co-owned by Eva Greene, acts as an artist management company, publisher and label all rolled into one.
What will your revenue streams be?
Direct sales might be one of your biggest income streams, but you’ll need to find others. Streaming on a platform such as Apple Music or Spotify is likely to be an essential revenue source – then there’s digital downloads; licensing your music to TV, film or games; merchandise; brand partnerships; and live events.
What formats will you release on?
Streaming might be a no-brainer, but getting noticed among the 60,000 tracks uploaded daily to Spotify isn’t easy. As noted, vinyl sales continue to rise – but demand is now outstripping supply, resulting in long turnaround times to get records pressed. Even cassettes are growing in popularity as artists seek formats to suit their sound.
Who will be your distributor?
The next step is to find a distributor that can get your music on streaming platforms and your vinyl in record stores. A good distributor is someone who is experienced in shifting a musical product and has established connections within a chosen genre.
How will you promote it?
PR companies will get your music into the hands of journalists, DJs and tastemakers, but the costs of campaigns can vary wildly. You’ll need a set strategy on how your music will reach the most influential people.
Young is an independent record label launched in the UK in 2006. Leaning towards experimental forms of electronic music and pop, its roster of artists includes Jamie XX and Sampha.
Launched in 2009, Mixpak has almost single-handedly taken modern dancehall and dub into the mainstream American charts thanks to its signees Popcaan, Jubilee and Vybz Kartel, as well as its founder, Dre Skull.
Founded by the musician Flying Lotus, Brainfeeder has long been an influential label within jazz, hip-hop and electronica circles, helping to launch the careers of Thundercat, Dorian Concept and Kamasi Washington.