Author Topic: Digital Record Labels 20010  (Read 146 times)

Jazzy Management

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Digital Record Labels 20010
« on: November 23, 2009, 01:43:56 PM »
Anyone who has a digital interest in hip hop, r&b, pop, rock or underground music is now sitting on a potential gold mine in the digital game of this business.

Before I get into the advantages of running your own digital label -- I'd like to make a comparison with anyone starting a physical label ten years ago. Firstly, a minimum investment of $350,000 would have got you started by renting a office sufficient to hold yourself plus a secretary, an a&r manager, a talent scout, a plugger/ promoter, and a receptionist. You would also need a copyright and royalty manager.

Your next task would have been to acquire good commercial recordings - with emphasis being on the word "commercial". Finding recordings was one thing, (as is the case today), finding good commercial product is something else. Unless you were able to acquire ready made masters under license from a third party, you would have had to pay for your artists to record the masters yourself. In addition to hiring the recording studio, you would also have had to pay a producer - plus a recording engineer (although the engineer's costs were usually included with the studio hire) - thus eating further into your $350,000 budget.

Assuming you could have got your team working nicely together- and sales from your first album had skyrocketed around the world, eighty percent of your income would have been taken up in overheads through royalty payments to the artist, producer and the music publisher (mechanical license). Then, there would have been your general overheads: salaries, expenses, office rent and so on. But we're getting ahead of ourselves. before selling any records you would have needed a reliable manufacturer and an effective distributor to create and disperse your cds, (and maybe some dvds to promote the records), to the shops. This, however, is where it gets tough. Distributors, ever mindful of retailers reluctant to provide shelf space to unknown artists, or should I say  artists yet to achieve a playlist position on the  radio, would refuse to represent you (the label). Not surprising when, given the choice, retailers could choose from any of the big selling artists such as Jay Z, Beyonce, Pussycat Dolls, Justin Timberlake, Snoop Dogg etc against the new artist. So, you with your new label and new artists, would be forced to put more money in to promote your record, with the hope of getting on the playlist - and thereby securing that elusive distribution deal. At this stage you would be wondering why you had started a label in the first place.

So, what enormous monstrosity of a thing happened in the music industry to change the old physical method of selling records? Enter, the Big Game of digital music. Now, suddenly every artist, songwriter, producer, engineer and, even manager who once had a notion of starting his/her own physical label but didn't have big money budget -- is able to start and operate his/her own digital label for about the price of a new laptop.

For the first time,individuals have a great opportunity of developing their own label from zero up - and making a very healthy living. Unlike the older physical system of starting and operating a label -- with all the huge overheads -- the digital label operator can start a catalog and build it at his own pace without the need to employ several people you feel me. You can begin with just two tracks - concentrating on networking in the music industry, testing your market as you go along. Measure that against a physical label spending lots of money hoping their records hits. Failure to hit would often spell disaster for many a physical independent and domestic labels - leaving only the majors to compete. Not so for a digital label. If a particular recording doesn't sell -- you simply delete it from your site and keep it moving. Updating your catalog can be done in minutes. Some digital labels regularly update their catalog every few days. A digital label, too, doesn't require the staff and individuals required of its physical counterpart.

Also get you a nice web site done for your new digital label

Some people are very creative and skillful in being able to create their own web site. Others, like me, are not. I had someone design my web site for me .

Next, make sure you have an up to date digital contract - one you can offer artists (or the owner of the masters). If you're not an artist yourself, you can enter into a license deal with any artist or production company willing to have you promotes and sell his/her product.

By knowing a particular field or style of music well, will help you  build your catalog faster than if you're someone learning as he/she goes along. However, enthusiasm will go along way. What you need to do when you start off is to ask yourself this question -- "Why would an artist license his/her rights to me and not someone else?"

Firstly, to have an artist (or production company) freely license his rights to you - you need to convince him/her that you have a powerful distribution system. Unlike other digital record labels and physical labels, with a web site, you have the ability to create your own "built in distribution system". Having a digital distribution account is an excellent idea - but you will still need to promote your product if you want to draw large numbers to your site. Having an online magazine, newsletter or blog is one of the best ways of attracting a high reading audience. Ten thousand plus is a good target to work towards. This will help you pick up more recordings from artists looking for a site attracting thousands of hits - assuming that artist's genre of music works well with your label. There are some excellent publishers, blogs and newsletters hungry for good topical articles, presenting you with another outlet. Keep your articles fresh and original, and your audience will come with each article you post.

Now, a note on your digital agreement, you can use a contract repeatedly for different artists. Keep in mind that a contract may need to be updated from time to time as new copyright laws come into effect to deal with technological changes, so to stay on top of your game you can check back every six months to see if your contract needs updating.

Next, ensure you have a terms and conditions policy on your site. Anyone starting off a digital label, should have a general list of conditions, setting out criteria for accepting product online, together with a privacy policy.

Next, if things get to rolling  you'll need a strong accounting system. No matter how effective you are selling product online - if you're not accounting to your artists accurately and on point to what it say on your contract - you're going to fall face first in the water. In my view there is nothing worse than a company with a bad reputation for paying royalties to its artist. For me, trust ,reputation and patiients is everything but dont play with the money.

Work closely and be up front with the artists who put their faith and trust in you. Your good reputation and name will spread.  (But artist also have to understand this shit dont pop over night)

Peace Lets get this money   $$$  Jazzy Management
« Last Edit: November 23, 2009, 02:38:37 PM by Jazzy Management »

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Re: Digital Record Labels 20010
« Reply #1 on: November 23, 2009, 01:50:18 PM »
True words spoken from Jazzy Management. I'm on the digital bandwagon. I know a lot of fans (particularly on here) aren't a big fan, but it really makes more sense nowadays. The production of hard copies (whether it's the artist doing it or the label) is so expensive and not worth it nowadays unless it's a guaranteed hit. I'm personally doing lots of digital distribution deals as we speak. It's the way to go y'all!
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