I know given the issues with illegal downloading music sales have been hit badly over the years and will no doubt continue to get worse.
Rather then send or sign you tracks to and established label, would it be more beneficial (financially) to start your own digital outlet and distribute your own music instead?
Just wondering if there is anyone on the forums who is considering or already runs a digital label themselves, who could advise if the doing the above is worth it?
There are two ways of looking at this.
Contracts with labels will include that all charges and incomes will be split 50/50. Which means that you will only make 50% of the sale of the track.
Running your own label will mean you’ll get 100% of the sale, HOWEVER you have to remember that major labels have a very large database of DJ / Producer / Radio contacts, they use this database to send out promo’s who in turn will help build hype on the track. If your track isn’t getting heard across the globe, then it’s not getting known.
Also it’s very unlikely to feature in Cool Cuts.
“Cool Cuts is the UK’s leading tastemaker dance chart compiled from reactions from tastemaker DJs and the Cool Cuts panel, now in it’s 21st year. The Cool Cuts is exclusively published in MUSIC WEEK, the UK’s leading music industry trade publication.”
Promotion is key to good sales mate, so the way you can look at this is you may make 100% per unit doing it your own way, but whilst you only make 50% through a major label, you’re probably also getting more units sold and more people hearing your track.
i have mixed views on this subject, i think maybe its best just to give your music away sometimes keeping only maybe 4 really good ones back each year for release.
i wouldn’t start my own record label until i have had at least 10 tracks released on various labels, there are so many poor labels around now releasing rubbish that they are responsible for the drop in sales and not pirate website. put simply the guys that have paid for music in the past would continue to pay for music, but like myself i buy much less because the amount of crap i have to dig through to get to the good stuff.
lets also face facts that the really good stuff these days is still being released on vinyl, when i say good i mean tracks that will shift in numbers
roben you’ll never get 100% of the money earned running your own record label unless you own your own distribution & advertising
all of the websites like TID & audiojelly charge 25 to 50 % of the original sales.
so if you release on a digital label through TID they take 25% they then pay the record label, the record lable takes its 10 to 65% and you get whats ever left minus any remix charge or sample clearance
Jon is correct Roben. I’m working on signing a couple of my songs and it would be safe to say that you get about 20-25% of sales of your track. You will probably never see 50% unless you become an Armin or PVD or whatever. Even if you own your own label and distribute the music yourself, you dont think that Beatport and iTunes are going to post your music for sale for free on their site, do you?
[quote]jon_fisher (10/28/2009)[hr]roben you’ll never get 100% of the money earned running your own record label unless you own your own distribution & advertising
all of the websites like TID & audiojelly charge 25 to 50 % of the original sales.
so if you release on a digital label through TID they take 25% they then pay the record label, the record lable takes its 10 to 65% and you get whats ever left minus any remix charge or sample clearance[/quote]
Yes i know guys, I did work for a record label. You obviously didn’t read my post well, or I didn’t explain well. You get 100% of all incomings. I’m not talking about expenditures like costs of promo, distribution etc. Thats why i said “all charges and incomes will be split 50/50” as the artist is also responsible (50%) for out costs (deductions are made from the incomings).
For whatever comes IN from the sale (after deductions), you get a 100% of it, rather than having to split that by 50% with label.
[quote]jon_fisher (10/28/2009)[hr] the record lable takes its 10 to 65% [/quote]
You’ll find most labels work on a 50/50 contract.
[quote]roben (10/28/2009)[hr][quote]jon_fisher (10/28/2009)[hr] the record lable takes its 10 to 65% [/quote]
You’ll find most labels work on a 50/50 contract.[/quote]
yes most do but i mentioned 65% as i know that there are companies that do
Roben out of interest which record label did you work for and what did you do there. i think as i’ve never worked for a label i’ll step back from this as you’ll have more info than me on the subject.
I’m sure you know your fair bit as you’ve had a release dude?
I worked as assistant label manager for born to dance records.
http://www.borntodance.com
I was made redundant though unfortunately 
to be fair bro releasing a record doesn’t mean jack i’ve had 3 released and that doesn’t make me know anymore, i also know a lot of label owners and still wouldn’t claim to know a huge amount about this. you being an assistant manager would have given you a huge inside knowledge as you would have had contact with many more labels.
Maybe, but surely you’d have had contracts to look through yourself.
Anyways i guess it is what it is. 
yeah i had contracts, i’ll see if i can find one and upload it. for obvious reason’s i’ll ahve to delete some parts or blank them out
Hi guys, cheers for the feedback. Going by the comments made I’d have a few options if and when the time comes to take any step;
Signing over your material to a major label may generate lesser income in terms of percentage but the flipside is your name would then be associated and promoted with that label and put out to the masses. So by giving up a percentage of potential sales revenue you gain mass publicity. An aspiring DJ looking to further his career with bookings with major promoters would most likely take this avenue. Same for somebody who prefers to simply generate income DJing first and production second.
As I no longer DJ, the above may not be beneficial to me, where as for say, somebody who plays out - Roben, it most likely would. (Sorry to use you as an example but your the only person on the forum who spins) 
Another cost factor to consider would be how much are you willing to spend to promote yourself, other then distributers taking percentages from your unit sales, I suppose you have to factor in your own web design, promo, various other promotion channels as Roben pointed out. Depending how far you want to push promoting yourself on your own, you may have to spend in order to gain.
As Jon pointed out, rather then sign over everything you have, you could simply give up 2-3 of your best (or semi-best) tracks to a major label/s, let them release the material, handle the promotion and get your name out there. After that, when you have achieved a good fanbase and people know who you are, then set up your own label and go from there. You would effectivly use the major label as a stepping stone to move up the ladder.
As Roben pointed out, to generate the most profit from unit sales - setting up yourself and handling you own promotion would be the best way to go, but as an unknown, getting your material to the right people and getting hype and publicity on your own can be a long and painful process. Signing to a major can take most of the hassle away of course.
Based on all the above would you say it’s more about choosing between publicity and profit? Any one option seems to generate more of one and less of the other (or vice versa).
Tough choice! All have pros and cons…
You’ve basically hit the nail on the head mate. Major labels have ‘fans’, so people will listen to a track they’ve released even though they’ve never heard of the artist/s. Those same people may not have bothered to listen to the track before hand or if it was with a diff label for example.
You will notice that a lot of successfull artists do have their own label, as it after time has worked out more beneficial to them.
If I had to choose between the options then based on my own situation then it would most likely by Jon’s suggestion as it’s more beneficial to me from the producer’s side of things. Attempt to get signed by a biglabel/s and use the promotion gained from that over timeto branch of into doing my own thing at a later stage.
Roben, just out of curiousity as you’ve worked for labels in the past,would you know what the avarage unit sales for a good release on digital format are.Before interent piracychanged everything I was told vinyl sales for a popular underground record would sit in between 5-10,000 copies on avarage (depending on popularity). Can you tell me what the avarage unit sales for mp3 releases roughly sits around, based on working with theBornToDance label.
I know it’s a silly question, but I’m just curious as I haven’t looked into digital distribution in detail yet. Last time I sat down with a label owner and had a conversation like this vinyl was still the DJ’s choice of weapon! 
To be honest mate it varied so much on the track and how well it was promoted, as well as which artists were involved.
The problem also was that sales has increasingly gone down. Now with the recession I can only imagian it’s got worse. I stopped working for them at the end of July last year, so it’s really hard to say what todays figures are likely to be.
You could have got anything from £0- £2k a track previously. Some artists are lucky to get about £200 really. When it was vinyl (back in the day), units would indeed sell, and it wasn’t too uncommon to shift 1000-2000+ tracks. You’d be lucky to shift 100 these days.
The other thing is that it really helps to have a big name artist doing a remix of the track, it helps shift numbers, however some can charge up to £2k just to do a remix.
You’re really lucky to break even on sales these days (after costs), which is why most artists make next to nothing for a release. Unless it goes commercial (uk charts). Hence why I eventually got made redundant, they couldn’t afford to keep me on, and a guy’s gotta pay the bills right?
This is why sooooo many small independant labels go bust, ironicly, it’s usually always been the small independants who release the best music.
Now it’s digital though, there is the side of things where your not having to pay for pressing, packaging and postage, but again at the same time, because it’s digital, it means the track is usually always available for free on the internet via torrent or zippyshare
It’s performance & gigs that earn the artists any money these days, however even that is going down hill with barely anyone able to or willing to pay club door entry fee’s.
Clubs just don’t pack out - and for as long as - these days like they used too.
So again, if the club isn’t making much, the artist can’t make much either. Don’t get me wrong, you’ll still find many busy nights, it’s just gone are the days of clubs packing out by 11pm and all rooms in the club being rammed till 5am.
In Brighton it’s so rare to ever fill out ‘room 2’ in the clubs now.
I personally blame the 24 hour licensing, now that people can stay in bars till 2/3am, and most bars having DJs anyways, being free entry and having dance floors, people just stay there all night rather than hitting a club and having to fork out £10-£20 just on entry. Especially since not only are people having to pay to get in, but drinks are usually more expensive in a club.
Whilst at the same time, bars can’t make enough to pay artists a decent pay either.as they arn’t charging door fee.
I feel that programs like ‘Cribs’ has painted a very bad picture on the actual reality of the music industry. Yes some of these big artists are making loads, but they’re releasing THOUSANDS of tracks, merchandise, etc across the world.
Most artists are living on next to nothing and struggling to pay the bills. Less time in the studio due to having to take on other means of earnings, means less tunes for people to enjoy.
This is why people need to realise, that ripping music from the internet is VERY bad for the industry. Everything is a knock on effect.
Sorry I went off on a side tangent there, i’m very passionate about the situation.
[quote]costa093 (10/28/2009)[hr]If I had to choose between the options then based on my own situation then it would most likely by Jon’s suggestion as it’s more beneficial to me from the producer’s side of things. Attempt to get signed by a biglabel/s and use the promotion gained from that over timeto branch of into doing my own thing at a later stage.
Roben, just out of curiousity as you’ve worked for labels in the past,would you know what the avarage unit sales for a good release on digital format are.Before interent piracychanged everything I was told vinyl sales for a popular underground record would sit in between 5-10,000 copies on avarage (depending on popularity). Can you tell me what the avarage unit sales for mp3 releases roughly sits around, based on working with theBornToDance label.
I know it’s a silly question, but I’m just curious as I haven’t looked into digital distribution in detail yet. Last time I sat down with a label owner and had a conversation like this vinyl was still the DJ’s choice of weapon! ;)[/quote]
you might have shifted a tiesto track in that numbers but when ever we used to get data sheets in not many tracks ever went passed the 5000 unit unless the shifted over to chart music
for instance tracks like “sandstorm” i think that sold just under 2million copies when it was re released in 2000
Gents great discussion and some good knowledge on here…
Roben, great rant mate and couldnt agree more with you…
Less clubs, less sets, less people paying for underground music…
Great discussion gents and great rant Roben… totaly agree with you…
the clubs just arent there any more i think, plus there has been so many crap nights that people have had a bad experience. The market has been saturated. Less clubs, less sets, less music… end off…
Anyway my ten pence… yes 50-50 is the norm for digital labels. I personaly wouldnt set one up. The reason being unless you are pretty well known you arent going to get your music onto beatport and other sites anyway. Plus your music wont sell if you dont have the contacts to get it out there.
I asked a friend of mine who has now signed with underwater and cacoon, what advice would you give me?
He said, stick to one genre and only give your stuff to the top labels of that genre. The reason being as soon as you sign to a rubbish label or you put tracks out that are not up to scratch people remember them.