starting your own record label part pt.135

sorry for the redundant posts but i've combed over the previous threads and didn't find much info on other aspects of running your own indie label. I've checked the RAPCOINTELPRO (site which is indeed great) but no dice, either that or i'm blind.

anyway, here are some other things I'm curious about when starting your own label. this is of course assuming the artists you're signing are brought on with a handshake type deal and without proper contracts involved (as a lot of people do).

1.everyone talks about how important it is to own the masters. it seems commonplace for artists to retain ownership of their masters when releasing music on an indie. this in turn leads to a 50/50 split of profits. my question is, when is it acceptable for the label to retain ownership of someone's masters? i've heard that if an artist has their product ready to press (already produced, mixed & mastered) then it's custom for the artist to retain ownership. however, i've also heard that if you the label invest in the artists demo (mastering & mixing) then you should technically own the masters because you're paying to have the recording professionally done. what's the consensus on this?

2.what does an artist usually get in the way of royalties for compilations? remixes? again, I know a lot of artists will do this for free just for the exposure but i'm sure some expect to get paid. so what is the average fee?

3.3rd party licensing. is there a set % that your label would get if you worked out some sorta 3rd party licensing agreement? let's say you released music by DJ Shadow on your label. Company X wants to use one of his tracks from your label on their comp so they contact you and ask permission. how do you figure the licensing fee? this also goes back to who owns the masters. if you own the masters you can license any track you want to to anybody, but if the artist owns the masters then they can license the track to whoever they want.

4.if you solicited a demo from someone is it commonplace to offer to buy their demo from them? let's say you solicit 3-4 tracks worth of material from an artist, they're virtually unknown but you're willing to take a chance on them and release a 12" single. however, it'll cost you anywhere from $1200-1800 to manufacture 1000 pressings. in order to recoup your costs you'll have to have a fairly effective marketing and distribution strategy. basically, if in the off chance you manage to make your money back you'll want most of it going back into the label. so, do artists sometimes offer to sell their masters to a label? or do they just expect royalties?

5.lastly, is $5000 enough to get a label off the ground? I've heard of labels starting on less but maybe this only applies to people releasing their own material. can it be done?

1. My company owns all of the masters because everything from creating the track to paying for mastering is done by me. My artists do not pay for tracks and they do not pay for studio time. The understanding that we have is that when a cd is released, then my label will act as the publisher and they will receive royalties off of the sales. I'm real straight forward with my artists. I explain to them how they should not expect to get rich off of there first cd and how they are going to make most of they're money from doing shows and appearaces. I had them set up accounts and save money every month so that it can be used for self promotion. One of my artist just did a couple of shows in St Louis and he used the money from his account to pay for airline and hotel. Since we are just getting started he understands that he is going to have to pay for those type of expenses until we can get off of the ground.

2.A new artist normally gets between 10-12 points from a cd. But as an indie, it's up to the CEO and the artist to come up with and agreement and when the time comes (before the cd drops), get contract lawyers involved. A lot of indie artist who make it tend to make more money that major artist because they're overhead is not as much.

3. You can determing as a label how much you want to charge for the use of your material. They're is a structure, but it just depends. I wanted to clear a sample for one of my tracks and the record label that I was getting the sample from wanted to charge me $8K up front and $.12 off of each CD sold. I could not afford $8K just to clear one sample, so I put the joint on a mixtape and got mad exposure for my artist and company from it.

4.Most artist are so anxious to get in the game that they will sell they're masters to you. The thing is that you should offer them royalties as well as whatever you pay up front for the master. Also have a contract drawn to cover yourself from a lawsuit later on down the line.

5.$5K is enough to get your company started as far as tradename and logo registering and getting a web site put up. You Tax ID is free and your business liscence is between $25-50. Once you take care of those things you are a legitimate company.

logo registration and tradename? does all that cause 5gz or is there a cheaper alternative?

To get a logo and tradename registered is going to run between $500 and $750 each depending on where you live. You may have to pay someone to create you logo. If you do this make sure that you get all rights to the logo. Normally a receipt will work. To get it registered, te cleanest way is to go through a Patent and Trademark lawyer.

D-Block--cheers for the info.

btw, I don't suppose you know anything about licensing do you? for example, let's say I wanted to license an album by a Japanese artist and his album was only available in Japan. how do I go about licensing that album for release in the US?

If you are talking about sampling, then you need to find out who thier record label is and get with them. I just moved here from Japan and I have to tell you that the rules for sampling do not apply. It's very hard to collect on international royalties, especially if the album was released only in that country. That's part of the problem that the industry is having with Jamaica and Europe. Because the sampling laws do not apply, or should I say are not enforced, you can actually take someones music and put your verses over it and put it out as your own legally. They do this in Japan all of the time. But to get back to your question find out if the label has an international department and try to work with them, if they don't, then go for broke. I've made at least a half dozen tracks with samples that I've used from music that I baught from there.

i'm not talking about sampling, i'm talking about releasing original works that were released in Japan only but for release in the US. for example, Artist X releases an album in Japan only. I like Artist X's music so much I can't believe no label has released their album in the West. I start a label and decide I want to license Artist X's album and release it in the US. a lot of times you'll see albums that never quite make it in the US market but are licensed for release in Japan only, or vice versa. I'm under the impression that I would have to contact the artist or label directly and pay some sorta royalty or advance upfront for exclusive rights to release their album in the US right?

I'm not really familiar with international licensing. Try to contact the international department of a major distribution company. I know that Sony's International Dept. deals with over half of Japan's distribution. Sorry that I couldn't be of more help.

First up, this biz had no standards. With modern technology, you can start up a record label from your back room. You need to get some volunteers to help run your label. Get some folks online(modern tech ) Then find out what needs to be done and have them do it. Then start from ground 0 no matter how much knowledge or $$$ you may have because ppl don't know who you or the artist is. Start out with pressing alot of CD-Rz and passing them out at the clubs and thangz. The paper work will come as you go, but don't think to hard because it's just like mackin' down a chic, you try to hard they don't wantcha'...