Why create your own record label as an independent artist? 

par Hannah Rees
Why create your own record label as an independent artist 

As a musician, you’ve probably been told many times that the road to success starts by going through a major record label, a kind of tollbooth where you have to pay a hefty price to get on the highway. But what if the scenic route along country lanes could take you where you want to go, what if that route offers another path to success that doesn’t involve getting signed to a major label?

In this day and age, independent artists have more opportunities than ever to distribute their music to a global audience without the need to go through a traditional major label, thanks in large part to the rise of social media as well as digital music platforms like Spotify, Itunes, and Apple Music.

So if you’ve got your passion project and you want to release your independent album but you’re wondering how to make your dream a reality, setting up your own independent label could be a strategic decision to take control of your music career and get your music out into the world on your own terms.

There are many advantages to setting up your own label as an independent artist, and it could help you get your career off to the right start, with full control and greater flexibility.

With that in mind, let’s take a closer look at all these benefits and why it could well be the right move for you.

1. It gives you more artistic freedom

The main advantage of setting up your indie label to release your own music is that, as the owner of your label, you have total creative control over your music and can decide on the style, content, and general direction of your work without any outside interference.

For the sake of argument, let’s say you’ve signed a record deal with a big label to release your new single. In that case, you would have to take other people’s opinions into account. After all, let’s not forget that record companies have commercial considerations in mind and often put pressure on artists to create music that is commercially viable and likely to appeal to a wide audience.

So, for example, if you’ve released a debut album that did very well, the chances are that your record company will want you to repeat the same pattern and the same success, over and over again, staying in the same niche that worked before and without much regard for your development as an artist.

This can be very frustrating for many artists who find themselves having to leave their record company in order to be able to create the music they really want to create.

Let’s say you’re known as a folk singer-songwriter but you want to try out different genres like rap, punk, electronic, and hip-hop… by being an unsigned artist, you have the choice and the opportunity to explore different genres and change your mind.

So, by setting up your own label, you give yourself the opportunity to grow as an artist and evolve, by retaining complete creative control over your work.

In addition to calling the shots in the recording studio, you can also decide on your music videos, any promotional merchandising, and any artwork such as the cover of your new album

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2. You can follow your own timeline

As well as having greater artistic freedom, being an unsigned artist means you can follow your own schedule. This means you don’t have to answer to a record company that might want you to write a whole album in six months and you can concentrate on releasing your music at your own pace.

Let’s say you’re signed to a major label or even one of the ‘big three’ record companies, Universal Music Group, Sony Music, or Warner Music Group. If they tell you they need your songs ready by a certain date to start the recording process, you’ll have to be ready.

But songwriting and composing can sometimes be a lengthy process and we all know that rushed creative work is rarely good. By setting up your own record label, you can remain in control of your schedule, which can allow you to experiment with different creative approaches and release work that you’ve really taken the time to perfect to your heart’s content. 

That said, it’s important not to use this flexibility and lack of accountability as a reason to procrastinate. When you don’t have anyone chasing you to do your work, you need to be disciplined enough to get the job done.

3. You have greater financial independence

We all know that the goal is to make a living as an artist, and going through a record label can actually get in the way of that. Traditional recording contracts often involve a significant division of earnings, which means that when you sign with a record label you give away a large part of your income, which can end up being a lot of money and can lead to you not being able to make a living from your music.

On the other hand, when you run your own label, you can keep a large part of your musical income.

Someone putting some money in a piggy bank to illustrate artist's greater financial independence by creating his own record label

We’ll look at the question of royalties in the next section, but you should be aware that traditional recording contracts often involve a significant sharing of royalties, with the label taking a substantial share. As the owner of an independent label, you can keep your royalties and you can even negotiate royalty rates that are more favorable to you.

You can go even further by diversifying your sources of income and exploring multiple sources of revenue beyond music sales, such as merchandising (CDs, cassettes, limited-edition items…), live shows, sponsorships, and partnerships.

Ultimately, just as you have complete creative control over your career, you also have complete financial control over it, which can greatly contribute to your success as an artist.

4. You retain full ownership of your musical productions

Now here’s the biggest advantage of setting up your own limited company as an independent artist: you own the rights to your original recordings, so anything you create in your musical repertoire or catalogue is 100% yours.

Artists who agree to work with record companies sign an artist’s contract that binds them to the record company and delegates ownership of their productions to it. This may seem trivial, but it’s actually very damaging for you because ownership of your work can really play an important role in building a long and sustainable career.

Remember when we talked briefly about royalties? In the music industry, royalties are distributed to different parties depending on the rights involved and contractual agreements.

Authors and composers receive royalties for the use of their musical compositions. And record companies, since they invest in the production, marketing, and distribution of recorded music, generally receive a share of the revenue generated by the sale and use of recordings. If you cut out the middleman, you can keep more of the revenue generated by your music.

What’s more, you’re in control and can negotiate licensing deals for advertising, films, TV shows, and other media, and earn royalties on these placements.

And by owning your master recordings, you have the ability to license your music for a variety of purposes, which leads to additional royalty streams, and you can continue to earn royalties on your music for years to come, and this long-term earning potential can provide you with financial stability and support your career throughout your artistic journey.

5. You can build a better relationship with fans and listeners

Another thing to bear in mind is that by having your own record label, you can establish a better relationship with your fanbase. Again, it’s about cutting out the middleman and having a direct connection with your audience rather than going through an intermediary. 

You’re in control and you can interact with your fans through social media, newsletters, and live events, building a loyal fan base that can support your career in the long term.

And if we think back to the first section where we saw that creating your own label gives you total creative control over your music, this means you’ll most likely create more authentic work that will resonate more strongly with the people who resonate with you.

6. You can network more effectively within the music industry

Let’s face it: setting up your own label gives you credibility in the music industry, as most people pay attention to a new label. It can give you the confidence to actively seek out and build relationships with other artists, producers, and industry professionals who are also active in the music scene. These relationships can lead to collaboration and co-signing opportunities, which in turn will help you expand your network.

If we look at collaborations first, working with influential artists from different genres or backgrounds can bring fresh perspectives to your music and can attract a more diverse audience to your work, increasing your visibility within the industry. One great thing would be to get your songs on playlists and get more streams and more downloads, and collaborations can open doors for that sort of thing. Another thing they might even do for you is get your music played on the radio. 

Co-signing opportunities involve partnering with or supporting emerging artists, producers, or other music industry professionals and when you run your own label, co-signing opportunities with well-known artists can be a powerful form of validation of your work and signal to the industry and fans that your music is recognized and respected by established figures in the field. What’s more, working with experienced and successful artists allows you to learn and grow; you can better understand the industry, learn from their experiences, and apply valuable lessons to your own career.

But to get these opportunities, it’s crucial to build genuine relationships within the industry and to be proactive in seeking collaborations. A good way to do this is to attend gigs or even music events where you can network with other independent artists.

7. It can be more advantageous from a financial point of view. 

Not surprisingly, setting up a record label costs money, and not just when it comes to recording costs and studio time, but also music distribution, music licensing, music marketing, and general publicity for your brand image.

But one of the advantages of setting up your own record label is that it can also save you money. 

First of all, companies can be more advantageous from a tax point of view and you can deduct your expenses, charges, and costs (purchase of equipment, studio hire, etc.). 

However setting up your own label as an independent artist can also open up opportunities for you to apply for grants and funding, and having a label gives you more credibility with funding bodies. They see you as a serious and committed artist with a structured approach to your career, which can increase your chances of getting funding.

You should also bear in mind that the various funding bodies often deal with various aspects of the music industry, including recording, production, marketing, and touring. With your own label, you can offer a range of projects, demonstrating your versatility and commitment to the different aspects of your music career. Many funding bodies offer grant programs to artists who support innovative and experimental musical projects. 

Before applying for a grant, it is essential to carefully study the eligibility criteria, application guidelines, and deadlines. In addition, local and regional arts councils may offer specific programs to support musicians and record companies in your area.

Sprouts growing from piles of money to represent funding.

While there are advantages to setting up your own record label, it’s important to recognize the additional responsibilities and challenges that come with it. Managing distribution, marketing and other commercial aspects takes time and effort. 

However the benefits in terms of artistic freedom and financial independence can be considerable, and running your own label can be a valuable learning experience, giving you an insight into the music industry.

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