How to Set Up a Record Label

Entertainment Lawyer Question and Answer Forum:

Welcome to this week's Entertainment Lawyer Q&A, published by The Film & Television Law Quarterly and the entertainment law firm of BLAKE & WANG P.A. Each week an entertainment lawyer will respond to reader questions and publish the best discussions.

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Question:

How do I set up a record label? How do I sell my music?

Answer by Brandon Blake - Entertainment Lawyer:

I represent a lot of record labels as an entertainment lawyer and this is one of the most common questions I get when helping to organize a record label for clients. This is a multi-part question, but I will start with what an entertainment lawyer does in setting up a record label company, and then address music representation and sales.

Over the past few years the dominance of music delivered over the Internet, versus through retail stores or music clubs, has opened up access to the music business to both recording artists and clients seeking to start their own record labels. Most simply a record label signs recording artists who record music, which the record label then sells.

Sounds easy. But looking at it from a business standpoint the first thing that makes a record label is a record label company, which might be filed as a music corporation or music LLC (limited liability company). Besides hiring an entertainment lawyer to set up the company, the record label should consider whether music investors are going to be a potential. Many of my record label clients are organized to raise a certain amount of investor money, and there are many music investors looking for opportunities to get involved in a record label. So when the entertainment lawyer sets up the record label company, consider the possibilities for music investors.

Once the record label company has been filed, it is time to consider contracts with the people that are going to make music with the record label. The different parties involved will be music producers, the music studio, sound engineers, recording artists, musicians, as well as songwriters and others. Each of these parties will need a different contract prepared by the entertainment lawyer. If these parties want to participate in the sales of the album or tracks then a music royalty or music percentage will need to be worked out as well.

The most critical music contract will be the recording artist contract. This deal might take on several different shapes. A “360 Deal” is when a record label decides to manage all parts of a recording artist’s career. A 360 Deal would include music management, music publishing and recording, allowing the record label to position the recording artist’s career for success. However, that is also a tremendous amount of work for the record label and the record label should remember not to stretch its manpower to thin.

Once the music has been recorded and mastered it is time for the record label to address music sales and marketing. While many record labels want to sign artists to major labels, it is now mandatory to show verifiable sales of a substantial level before approaching major labels. There are many music distributors available to work with record labels to get music out both online and also into retail stores. Of course sales and marketing online is critical and working with the right partners will ensure the success of the label and the career of the recording artist. Finally an entertainment lawyer can represent a record label and help set up the necessary connections.

As with any legal matter, please do not make a decision about complex matters without consulting an experienced entertainment attorney first. I have been representing feature film projects and television series for more than 14 years. Please feel free to contact my office about a quote.

- By Brandon Blake, Entertainment Lawyer

About the Editor:

Brandon A. Blake is an entertainment lawyer and producer who works with Academy Award winning actors, directors and filmmakers. A complete biography is available online.

About the Entertainment Lawyer Q&A: The Entertainment Lawyer Q&A does not create an attorney-client relationship, nor is the information treated as confidential. Responses to selected questions will be made public and shared with our subscribers. All entertainment law information is informational in nature and is not intended to be acted on without entertainment lawyer counsel.