I was last at an event with some big record labels and at first, I was thinking “who would want to set up a record label?”, but as time went on i began to think that if the label was positioned as a leader and it developed “niche” artists, it could be quite exciting to start a record label.
How would it be possible for a label to survive in this climate?
Some of the label bosses were detailing deals that they have been doing - mainly 360 or 270 type deals.
- 360 and 270 being descriptions of numbers of degrees of a circle.
- 360 meaning they get a share of 360 degrees (100%) of the artist’s income.
- 270 meaning they get a share of only 270 degrees (75%) of the artist’s income.
So the new record label, instead of just getting a share of the record sales of an artist, they can now get a share of merchandising, touring, publishing and all manner of potential income streams. These labels recognize that there is still a lot of money around as for example live music, merchandise and publishing continue to generate revenue, and they are building and restructuring their businesses around this.
So if you want to start a record label it important right now to not be scared of all the doom and gloom, but its also important to begin to think about your role as a label and what that’s going to be. Yes, people are still buying music, but they are not necessarily buying albums. Most artists just need 2 or 3 songs to get going.
What else is going on that’s going to change the role of the label?
People are gathering in groups via the Internet and engaging with one another. They like to meet up, exchange ideas and conversation. These groups are called tribes. Due to the increased connectivity of the planet, they are ever more prevalent. Groups of like-minded individuals that have things in common. The role of the label will be to serve the tribes that have an interest in its output. The label should be a leader, in effect, of the tribe’s musical taste.
So if you want to start a record label, be sure to research and find the tribes that will be into what you are putting out, and then begin to engage with them. People don’t want to be told what to consume, they want to be involved, they want to be lead, they want to be entertained and they want to share all of this with their fellow tribesmen. There are plenty of fans of music and plenty of good musicians playing good music, the role of the label will be to connect the two and lead the conversation.
