Running your own record label: Three good things and three less good things...

The Good:
1. You have 100% creative control over music, artwork, packaging, design, budgets, promotion, etc. You're in control!

2. There's a personal enthusiasm and pride in your work which is rarely demonstrated by third party.

3. While a major (or even big indie) label will require an act to sell tens of thousands of copies of an album, an artist-run label can generally cover its costs, survive and even grow by selling just a few thousand copies. Ultimately that means an act may be dropped from a major label despite reasonably successful sales... that same level of sales for an artist-run/small indie is the opposite - it's a success and helps the longevity of the artist.

The less good:

1. Profile - major/bigger labels have purchasing power, persuasive budgets and mass-market appeal. An artist/self-run label needs to be creative and willing to work hard to be seen in a market dominated by the big players.

2. Costs - it's hard to compete with expensive marketing and advertising campaigns run by majors/big indies and the money they can put up for tour support, etc. However much of these costs come out of the artists' pockets in the long run.

3. It can take a while to become a recognised label, so getting decent distribution and developing other partnerships can be hard at first. But time, hard work and committement always win in the end, so it's a bad thing that turns into a good thing!

Dave Arcari, Buzz Records




Basically the function of a record company is to release sound recordings made by its signed artists and to promote these recordings in a bid to sell as many as possible.


There are a handful of major record labels left - Sony, BMG, EMI (soon to become Virgin in UK & Capitol in USA), AOL Time Warner & Universal. None of them are owned in the UK, although all have London offices. They are the masters of our mainstream universe.

They also provide and cater for niche markets via their range of smaller labels (or imprints) so if you're considering signing to any of these, make sure you check out the mothership first. The appealing thing about signing to a major is that they have worldwide clout, tons of money to invest and rosters full of acts you have mimed into your hairbrush for years. The downside to all this is the perceived lack of control afforded to artists on major labels whereby they're turned into a product and marketed not so much on the basis of their music but on the basis of their general appeal to certain sections of the record buying public. Majors are, after all, catering for their shareholders and not necessarily for music fans. It might also be argued that due to high levels of staff turnover the majors don't afford their artists much in the way of personal service.


Contrary to popular opinion, an independent record company is not one that only releases guitar driven three-piece bands with silly haircuts. Rather, it is a record company not affiliated in any way to the majors listed above. There are thousands in the UK and, in theory there's nothing to stop you from forming your own small label in order to get your records out. As with the majors, there are advantages and disadvantages in signing to an independent record company. Because they're generally in it more for the music than the money, indies usually don't have quite as much to invest which means you will probably have to work with wee budgets and minimum advances (if any at all). It also means that the promotions budget is likely to be smaller and you might have to do as much as possible on your own. However most indie labels will allow you a high level of creative freedom and therefore the opportunity to get your music, rather than your intimate body parts into the public domain. They are also likely to be much more focused on developing and nurturing your act in the longer term as their livelihood is more likely to depend on it.


A recording contract is a legal agreement between you and a record company. It outlines the terms and conditions under which you have agreed to 'sell' your recordings to the company. The most basic issues outlined in a contract are as follows:

Your payment. This is calculated on the basis of royalties from record sales. You agree on a percentage of these sales, (new bands can expect around 12% (12 points) on the published dealer price (PDP) NOT the cost of the CD in retail shops). Because royalties are paid out only twice a year in arrears and can take up to 18 months to go through the accounting system, you will also agree on your advance payments, lump sums paid to you by the company in each option period to cover living expenses. Advances are recoupable which means you won't earn a penny from royalties until the company has covered the cost of your advance. If your sales never cover this amount, it is the record company's loss.

The company should pay up front for your recording expenses, sleeve artwork, advertising, promotion, videos, marketing and distribution and these are also usually recoupable from sales. Most companies will 'lend' you money for tour support if you are making a loss from gigs in the early days.

. The length of your contract. The 'minimum commitment' clause sets out how many albums or singles you will be expected to deliver to the company and in what time frame.

'Obligation to release'. This is the promise the record company should make to release your recordings. Otherwise you could find yourself delivering your end of the bargain but having none of the work released.

The record company may expect you to work exclusively for them and not to release any material originally recorded for them on another label for a stipulated time period (this is not necessarily the case with dance labels though). You'll also have to be up for promotional work which can be extremely arduous and time consuming, consisting of several press interviews per day or a radio tour, visiting 2/3 cities in one day.

Record contracts can vary from 5 to 50 pages.

NEVER EVER SIGN ONE WITHOUT INDEPENDENT LEGAL ADVICE
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