There are attractive reasons for the independent approach, such as keeping artistic control and retaining copyright of your recordings and songs. Then there are new incentives, like the possibility of distributing and selling on the Internet. However what they often forget about is some of the main issues surrounding setting up an independent recording label which are worth careful thought at the very outset, often leading them to make serious mistakes which cannot be recovered. Unfortunately these mistakes seem rather common in cases of independent labels, a brief overview of which is given below.
1. Insufficient Capitalization
Probably the single biggest mistake made when planning to start an independent label; it is often the most destructive one. With little cash in reserve and long-term needs for them, labels often go burst!
2. Poor Planning
Every aspect of how a label operates needs to be planned out in detail with a grand plan that looks ahead at least two to three years. Lacking this, most independent labels find that they’re reacting to events rather than making things happen when and how they want them to, eventually getting tangled in a whole mess too complicated to get out of.
3. Poor Budgeting
Budgeting is the financial roadmap for the success of any independent label; because, for all its artistic qualities, music is eventually a business, and with lack of proper budgeting, the business falls apart.
4. Weak Marketing
The music business is much more about marketing than music and unless the marketing goes up as the labels go along, the labels never succeed. Unfortunately by the time most of the independent record labels realize this, it is often too late.
5. Improper Distribution of Music
The marketing and selling of music begins and ends with the label. However most labels expect their distributor to do it for them, not realizing that their expertise is in selling the music to retailers – not marketing or promotion, resulting in poor promotion and distribution of the finished product.
6. Insufficient Exploitation of Music
Most independent record labels lack the vision to exploit their catalog and copyrights to the fullest often leaving their money on the table, which ultimately results in capital problems.
7. Lacking Websites
All record labels must have a web presence. The web has been in existence for more than a decade, and not having a good site is nothing short of negligence. But what most record labels do is instead of filling the site with useful information, they pay more importance to the dazzle and the looks, failing to be creative and marketing themselves to the generation of people who know how to use computers so well.
Unfortunately it is not really about the music any more – it never was. The music business is much more about marketing than music – music is art not business. They call it the music business because it is a business. It is important to have a realistic appreciation of how hard it is to succeed in this industry, but it is not impossible. What needs to be done is to be innovative, find the opportunities, and making the most of them.
Remember luck only occurs when opportunity meets preparation.