Start Your Own Record Label

Have you ever dreamed of starting your own record label? Maybe you are an aspiring entrepreneur with a passion for music. Or perhaps you are a songwriter or recording artist looking to cut out the middleman, taking advantage of the modern age of low-cost digital distribution and the rise of successful indie labels. Either way, running a record label can be a fun and rewarding way to be a part of the music industry.

Being knowledgeable about current trends in modern music can help you devise a plan for your label’s niche market. But maintaining a financially successful and sustainable record label takes a well-developed understanding of how to start and run a business. The Frost School of Music’s online Master of Music in Music Business and Entertainment Industries (MBEI) uses coursework and hands-on experience surrounding business management, budgeting, planning, marketing and promotional strategy, copyright law and licensing, publishing, royalty revenue, and other such subjects to help degree candidates become fully versed in the many aspects of starting a record label.

Why Are Indie Labels Taking Over the Industry?

If you want to start your own label, you are probably not (at least not initially) planning for it to become a major label like Sony or Universal. This is a good thing, as starting a new major label is both unrealistic and not a very good idea.

The business model of the giant record label has all but become outmoded by the digital age of music. Once the heart of industry revenue, record sales have plummeted since the turn of the century. The $15 CD people used to buy has morphed into a $1.29 single download or $10 a month for a streaming service subscription.

Physical manufacturing and distribution of music used to be extremely expensive on both large and small scales. Indie labels simply could not compete with the budgets of the majors. But with digital distribution being widespread and cost-effective, the indie label model has become much more viable. So, although it is still a large and high-risk investment, diving into the label startup game can now be much more than a passion project.

What Are the Basic Aspects of Business Management Involved in Starting a Record Label?

Simply put, a record label is a business, same as any. Therefore, starting and running a record label successfully requires mastery of (or the willingness to delegate out and pay for) every aspect of effective business management. Registering the business is probably a good first step. Then you will need a well thought-out business plan — short and long-term strategy, budgeting, and forecasted investment returns (not to mention startup money from either yourself or others).

Marketing and promotion are essential to a label’s success. So you will either need to study the various methods used effectively these days or hire a company to do it for you. You will need a solid understanding of legal contracts involved or have a good music lawyer handle these things. You will need distribution if you aim to have physical releases of CDs, cassette tapes (yes, they are having a comeback), or vinyl.

Unless you are planning on going it alone, you will want to assemble a group of people to help you run the label, whether as employees or as partners. Or, in that vein, you may want to develop a plan for when to hire on more people as the label grows.

What Kind of Label Do You Want to Start?

Along with the business know-how, this is really the center of your record label startup adventure. Your label’s brand will in large part determine its success. What kind of music do you want to release? What is the perfect name for your label? Do you want to go old school and press vinyl to cater to the resurgence in that specific media type, or simply release songs and albums digitally? Do you want to be genre-specific or eclectic? Really, what do you want to be known for?

What Makes a Record Label Successful?

Beyond incessant hard work and luck, many things can add to a record label’s success. Some labels aim for a very narrow slice of the market, developing more cult loyalty to their brand, while others aim for a broader market share.

Increasingly, labels look to diversify how they bring in revenue, such as embracing the rise of music streaming and learning how to capitalize on higher-earning exclusive content opportunities. Licensing and publishing revenue is essential. Some labels are changing the purchasing model altogether to ideas like subscription-based monthly releases. Even some huge mainstream artists are electing to give their records away for free or a fan-determined donation.

Essentially, the modern record label has to stay current, exploring every developing opportunity. But with the decline of the major record label and the shifting revenue base of the music industry, smaller labels have perhaps more of a chance at success than ever. With a penchant for smart business, a passion for music, and a lot of creativity, starting and running a record label is a real possibility for the determined, well-educated entrepreneur.

Learn more about Frost’s online Master of Music in MBEI program.


Forbes: The Records Labels of the Future Are Already Here

Loopmasters: 10 Steps to Setting up Your Own Record Label

Forbes: Major Record Labels As Dinosaurs?

The Balance: How to Start a Record Label

Forbes: How to Start Your Own Record Company

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