How to Start a Rap Record Label

A&R (ARTIST & REPETOIRE)

The ones in charge of finding and signing new talent. They also have a hand at choosing album cuts and studio selection.

AIRPLAY

Airplay is very competitive. There are two ways to get airplay. One is through money and the other is through buzz. Either you pay a hired radio promoter a bunch of loot, or get buzz. Buzz can be obtained on college radio and other indie radio outlets like mixshows and late night specialties enough to generate public awareness. Buzz can also be made announcing your release date or distribution or gigs. There is one third way. Luck.

ART DEPARTMENT

They are in charge of artwork like album covers and advertisements.

BARCODES

These are parallel lines that vary in width and represent a 12 digit number called the Universal Product Code number or UPC. When they are on your album and scanned the store digitally stores data of what album is being sold. You don’t need a barcode if you’re selling in mom & pop stores and gigs, but once you sell in retail and online retailers you do. You can get one from http://www.uc-council.org. The fee for a professional barcode is around $750.00 plus the cost to renew it every year. If you want your sales to count on charts then you must register your barcode with SoundScan. There is a way to get around the $750.00 price of a barcode and that is by signing up for Cdbaby.com and buying one for $10.00 there, but this type of barcode only counts for your first 10,000 sales, after that you must buy a new one.

BDS & SOUNDSCAN

BDS tracks your radio airplay. Registration to BDS is free (although it costs to get back data), send them your song name, label and genre of music.

Their address is:

8100 NW 101st Terrace

Kansas City, MO 64153

ATTN: Encoding Department

BUSINESS AFFAIR

Takes care of any financing and payroll issues.

BUSINESS PLAN

In this document you will show your plans on budget, marketing, your absolute strengths and weak points and any problems that you face.

CONSIGNMENT

Consignment is when a store takes your product and you are paid when they sell. Usually by contract you promise to promote your album and they keep it on the shelves. You must keep vigorous track of sales or you the store may keep your money. It is very wise to use consignment as a sales backing so you can present a clear picture of your history to a distribution company.

COPYRIGHTS

Fill a Form SR (sound recordings) copyright at www.copyright.gov . Sending a copy of your material to yourself might not hold up in court playa, be legit...

DISTRIBUTION

Distribution companies are the ones who put your album in stores. In order to have distribution you must have a strong sales history or strong buzz through radio or promotion. You must also have a business plan and be able to have more than several albums to be distributed in the future. If you are an indie, the pressing of your album and materials will be your responsibility so most distribution companies will not take you on if you are not extremely financed.

LABEL LIAISON

This is the person who talks to distribution and record labels on the specific date an album is released and if it conflicts with other releases.

LAWYERS

Musicians hire a special lawyer called a music or entertainment lawyer which specialize in handling record label problems any legal questions can be resolved with this person. Also music attorneys many times act as people that can get you through the door as far as your label getting a distribution deal from a major so you can sell nationwide, never be scared to ask anything and find out a few quote of their prices before hiring a lawyer.

LEGAL DEPARTMENT

Handles lawsuits and contracts

MARKETING DEPARTMENT

Organizes the plans of the promotion, publicity and sales department on every album.

Marketing/Publicity/Hype

– Marketing is to promote your artists by using means other than cds, like t-shirts, benefits associated with your record label and such.

– Advertising is tv, radio, commercial and other media base promotion.

– Publicity is getting people to talk about you through media like

newspaper clippinsg and word of mouth.

– Hype is the momentum until your album is released. A local publicist should be hired if you need the buzz.

Mechanical/Royalties

Mechanical royalties are about .0715 cents per song and you can be paid up to about ten songs, but in due to a statutory clause a record label only pays 75% of the .0715 royalty.

So if you album goes platinum (sells a million records) you would get paid 1,000,000 times 10 (ten songs) and then take that 10,000,000 and times that by 75% of .0715 or .06639 to get $663,900

1,000,000 records

* 10 songs

----------------------

10,000,000

* $.06639 royalty percent

----------------------

$663,900

This cost is without recoupment costs of the album and assumes you own 100% of the publishing. If the record label owns 50% of the publishing the record label gets paid 50% of this sum. All cost of the album are then taken from the artist’s portion of this sum including studio time, promotion, producers, retail, distribution, mastering and anything that costs money.

Online Distribution

– The two driving forces of online distribution of indies are www.amazon.com and www.cdbaby.com, also first and second in that respective order. Amazon.com will make your album receive a lot of traffic through little promotion but costs a bit. www.CdBaby.com is a one time fee of 35.00 and they handle the shipment, mp3 links, picture uploads and credit card transactions.

Packaging & Artwork

– Artwork is totally a personal taste so hire someone who fits your needs. In packaging think of your budget first then perks. Diskmakers.com and cdman.com have the exact guidelines you need to follow to have your artwork printable as well as prices on packaging and pressing of your albums.

PAYOLA

– Payola is illegal. It is taking something in order to play songs. Most radio people have a limited salary, but some at the top have very nice cars and houses even beyond their means. Radio promoters use secret words through cellphones offering money, tickets, cars, houses and fixing radio budgets in order for a slot of airtime.

PERFORMANCE ROYALTIES

– Performance royalties are from performances of your song based on how much you own. If you own 100% of the song you get all the money. If you own just the lyrics you get 50%, or just the music 50%. If you sample, the sample would take 25% of what is left so you get 25%. Through ASCAP and BMI you are paid when a radio station, concert, dance hall or club plays your music.

When your records sell you receive two types of royalties, mechanical and record royalties.

PRESS KITS

– A press kit is a professional package representing you that is sent to all media before every album release. A press kit will contain quotes, newspaper clippings, bio, fact sheet, cover letter, photos and song lyrics. These then are put in a fancy folder and expensive envelope in hopes of impressing media heads.

PROMO TOUR

– A promo tour is a tour from a selection of cities where you promote yourself by gigs, retail appearances or interviews.

PROMOTION DEPARTMENT

– Makes sure albums are getting radio play and video play on radio and TV stations.

PUBLICITY DEPARTMENT

– They make a buzz for an artist, get newspapers and magazines to write about the artist and set up appearances with radio and TV stations.

RECORD ROYALTIES

– Record Royalties are from record sales taken after the recoupment costs at rates agreed upon in contract in points (a point is equal to a percent), usually by 10%-20% percent or 10-20 points of the retail sale.

SALES DEPARTMENT

– Works with record chains and other stores to get new albums into retail.

START A LABEL

– To make your business legal, look in the business section of the phonebook for business license officer or treasurer. Have them mail the license to you and remember you are a wholesale company run out of a private home or facility. Non-profit means you don’t plan on money being any focus of the label. Corporation means you will personally take no loss financially. Sole proprietorship means one person is responsible financially for everything. Partnership is equal responsibility. Then go to an IRS office and apply for a Tax ID number. With this you are responsible for taxes unless you can show a loss. An accountant should be hired when you make profit.

TYPES OF RECORD DEALS

– Through a distribution deal or pressing and distribution deal an indie can be signed to an indie yet have a major label press and distribute the album for a cut of the profit.

– A production deal is for indie producers and production companie to develop talent and offer their artist to a major label, but get a cut of profit from sales.

– A major label deal is a deal through either Sony, Universal, BMG, EMI or WEA. You will be promoted with more money and very heavily and most likely sell more, but the artist will receive a very minor percent of profit. Majors are professional when it comes to advertising, financing, legal, merchandising, promoting, sales, shipping factors of an album.