A music label is a production company of musical artists. Its aim is to find talents, artists that it can accompany in the process of recording, marketing and in the development of their career.
The label guides artists towards the production of records, the organization of representation, the promotion phase, or even the provision of titles on legal streaming platforms. The music label is remunerated on the sales generated by the music produced, while paying remuneration to the artists according to the terms set out in a contract.
Creating a music label is also about creating a brand. Among the best-known labels, we can cite Sony, Universal Music… But more and more artists are embarking on the creation of their own independent label in order to gain autonomy.
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What is a music label?
A music label is both a record label and a brand. Indeed, an artist, singer, musician who wishes to distribute his music to the public will have to call on a record company producer at the head of his music label.
The artist then signs a contract with the label manager. This contract grants exclusivity to the manager. The artist concedes the exploitation rights of his work to the producer who is responsible for making copies of the work.
In return, the manager obtains ownership of the recording and receives part of the revenue generated by the marketing of the work.
But because it’s not always easy for an artist to get noticed by a label, many people decide to create their own music label. This self-production solution is increasingly common.
There are advantages to creating your own label:
- the artist remains the owner of his rights to the exploitation of his work;
- the artist retains the “royalties” (royalties) resulting from the exploitation of his music;
- the artist has the opportunity to surround himself and accompany other artists in the development of their career.
The steps to set up your label
The creation of a music label respects the different stages for the genesis of any new company. There is no particular or special steps to set up a music label . However, this is a particular sector that requires particular skills on the part of the founders.
Not everyone is able to discover artists, promote talent, and market works. Managing a music label requires a certain knowledge of the sector and good preparation thanks in particular to a well-established business plan.
Business plan
Your company’s business plan is the document that formalizes the strategy adopted to make it grow. It defines the positioning adopted, the editorial line, but also presents all the studies that you will have carried out to establish yourself on the market.
The business plan is the meeting of all the arguments that allow you to communicate an ambitious , but thoughtful project. There will of course always be a part of risk, however following a studied business plan also allows you to maintain the course you have chosen.
It is on this occasion that you will have to provide the financing you will need to create your music label. Indeed, this presupposes a human and material investment: recruiting artistic directors, sound engineers, renting or acquiring a recording studio, etc.
You can choose to finance yourself with your own funds or to appeal to external investors (private or bank).
The development of a well-researched and realistic business plan will allow you to increase your chances of obtaining financing, especially if you undertake an in-depth market study.
What elements set you apart from the competition? What commercial strategy will you adopt to attract artists? How will you promote your talents? Does your label have a sufficiently distinctive musical and visual identity? etc… Your business plan must be able to answer all of these questions.
Brand choice and protection
As with any creation of a company and even more in an artistic field, the choice of the brand is an essential step. A trademark is a distinctive sign. This sign can be verbal and/or figurative, that is to say accompanied by a logo.
Once your brand has been chosen, you need to protect it as soon as possible.
For this, a brand must be:
- be distinctive (the mark must identify the company and not another);
- be lawful (prohibition on the use of controlled designations for example);
- not be contrary to morality;
- be available for registration
The search is essential. Failing this, you risk using a trademark that is already registered and making you guilty of unfair competition or counterfeiting. In general, a trademark is considered available when it does not reproduce or imitate a distinctive sign already registered for products, services, activities identical or similar to yours.
You will therefore need to determine the products and services covered by the protection of your trademark. These goods and services are organized in the form of a class. You need to select the right classes (without omitting any, in which case only part of your activity will be protected).
The trademark registration can be done electronically for a selected class. Be careful not to neglect this step. It is only after examining your application and registering your trademark that it is officially protected and usable.
The formalities to be completed to create a label
You have chosen the legal form of your company, opened a bank account, deposited your share capital, drawn up the articles of association… It is only once all of these formalities have been completed that your company will receive its identity document that formalizes its existence.
Prior to this opening, however, the company may draw up quotes and make purchases on behalf of the company. It is advisable to then mention it on the statutes in order to be able to consider them in the accounts of the structure.
To make this addition correctly in the annexes to the articles of association of the company, it is advised to call on a specialized lawyer so as not to make mistakes.
Develop your business
To set up a music label , you have to be able to find and welcome artists that you can then promote. Many factors then come into play in the potential success of a piece of music. Your know-how will be the key. Remember that you must not only find talent, but also attract them.
Your business plan and the presentation of your project must be convincing. Artists are partners in your development, and gaining their trust is essential to working in good conditions.
The importance of contracts: artist contract, copyright…
Whatever happens, performers recruited by a music label remain the recognized authors of their works. This is what we call copyrights . However, in intellectual and industrial property law , there is the notion of transfer of rights .
In no case is it a question of giving the paternity of a work. It is indeed a modality that allows partners to market a work or its fruits. For example, in the case of the music industry , musicians assign the exploitation rights, called patrimonial rights, of their works in order to allow the music label to use them to produce records, put them on streaming sites, organize concerts, etc.
This operation is carried out by signing an artist’s contract. Against this assignment of copyright , the artist receives remuneration. The conditions of the latter are then negotiated in the contract between the operator (the label) and the artist.
But a label is also brought to exchange with multiple actors, other than the artists themselves. Indeed, the label uses artists’ agents and will be required to sign artistic agent contracts .
He may also be called upon to collaborate with publishers in charge of marketing the works. An exclusive license contract will have to be concluded in order to ensure the musical promotion.
As you will have understood, the specificity linked to the sector of activity of the music label requires the conclusion of a series of specific contracts.
In addition, each of the steps necessary to create a start-up or a company will have to be respected to launch your music label. A lawyer specializing in music law can assist you in the choice of legal form, the filing of your trademark, the drafting of statutes as well as the drafting of partnership contracts with artists and other actors in the artistic community.
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