I will chime back in with something more tailored to your questions and the convo @mattlowery and apologise in advance for this being a copy/paste post. I run two labels which are pretty different from each other and our digital distributor asked a while back “I’m speaking on a panel at [redacted] regarding whether to sign to a label or not…” in the context of being an artist run label. This is what I sent him back, which is pretty raw as it was just material for him to use in creating his talk:
So I’d say for me, like anything music business related - releasing independently, signing with a label, forming a label, etc - has two main components. One side being the creative aspects and the other being the practical/logistical side of things. Fundamentally, if you are releasing music and hoping to make a living from it, or a least increase the listenership of it, there is a certain amount of unavoidable labour which comes along with that, the path you take just potentially shifts who does it. One of the outcomes of the decision of which route to market to take, will be a shift in the balance of the labour you have to put into the logistics and the time you have to spend making the music. For me (ironically), I’d rather maximise the time I can spend simply making music, but that’s not always practical.
Forming a label with other artists can in theory serve a few purposes:
- Division of Labour
- Shared Resources
- Shared Network
- Diversifying Skillsets
- Increased bargaining power with suppliers/rest of industry
FAR started out this way. An exchange of skills playing to people’s strengths. Victor (Sun Glitters/CLD.RAN) is an incredible graphic designer and video producer for example, so he handles all of that for FAR. Chris (CNJR) has years of experience as a booking agent/artist manager so he can take on those responsibilities for others. Everyone has an area they take more responsibility for, based on their skillset. This doesn’t necessarily decrease anyone’s individual time commitment to business stuff but it can make that time more effective and hopefully more interesting.
There is a tipping point however. If you take on releases for say, friends or projects you are really into, that are not from the core group and who do not contribute in like (with skills/labour as opposed to a percentage share). You quickly start to accumulate more labour than perhaps you can handle in the time allocated, or is just generally worth it. At some point you might end up spending much more time on the business end of things. That’s the point where you either pare back or… embrace it and go full label.
There are advantages a “full” label can have which simply amounts to resources (or more likely, the potential to have resources). At the end of the day though, starting a for profit label is the same as starting any other business and should be approached as such. Does it make financial sense? Do you have a business plan/capital/skills/resources/etc/etc? It’s also a point to definitely stop and think, do I actually want to spend my time running a record label? Because unless this is now a very busy full time job, you probably aren’t giving it what it needs to survive (exception being hobby level, small scale, specialist, etc).
I guess to come full circle at that point is to think would a better transition be from fully independent to signing for a label. I think the answer for me there is, depends on the label. A cost benefit analysis of time saved vs money out vs potential increase in “success” can be pretty hard to do. But it’s the best way, in my opinion, to make that decision. Assessing the intangible “fairness” of a deal can also be somewhat difficult as in all likelihood (in fact, hopefully!) the label will engage with other sections of the industry (distribution, fulfilment, PR, etc) at a level above what artists releasing their own music tend to. These other parties get first cut in most cases and from the gross revenue, not the net. So you and your label are both at the end of a chain in which you get a smaller percentage of the overall (hopefully much bigger) pot of revenue. I would definitely ask them to justify their cut if it seems like a lot, they shouldn’t have a problem doing so.
Basically, wouldn’t it be nice if we could just write music all day and still eat.