September 19, 2020

What I learned from No Limit Records

no limit records
Image Credit: Crackper’s Blog

No Limit Records was one of the most successful Independent labels in Hip Hop during the mid and late 90s.

The label was founded in 1990 by Percy Miller better known as Master P as a small record store in Richmond, California.

In 1991, Master P decided to produce and release his first album, titled Get Away Clean under the newly formed No Limit Records label in partnership with the now defunct In-A-Minute Records.

However progress was slow in the beginning but Master P soldiered on and stayed consistent by releasing follow up albums and selling them from the boot (trunk) of his car.

His efforts as an Independent artist and record label owner started to pay off and by 1995, Priority Records (famous for breaking NWA) and other major labels came calling. He signed what was then regarded as a risky but yet lucrative manufacturing and distribution deal with Priority Records.

The deal made sense for Master P from a financial standpoint because the profits would be split 85/15 in his favour as soon as his records started selling.

Priority Records was comfortable with that deal because that meant no marketing and promotions spending on their part. And the executives initially thought Master P would sell a few records. But little did they know what was in store.

As soon as the deal kicked in, Master P and his No limit roster were on top of the world and the money was rolling in.

But as the saying goes “what goes up must come down”. By the early 2000’s the label started to lose market share, artists were jumping ship, etc. And to add insult to injury, the label’s in-house production team Beats by the Pound sued Master P and No Limit Records over alleged unpaid royalties.

As “spectator” and music lover I learned so much just by watching and reading how this label rose to prominence.  And I will share some of those things with you just now.

Develop your own product

If you want to make good or great profit margins you have to make your own products from scratch.

When you manufacture your own product, effectively you will have control over the margins and the RSP (Recommended selling price) and supply chain (in most industries).

Between 1991 and 1995 Master P released seven projects independently (including TRU studio albums) without the support from a recognized distributor or label.

He sold his albums directly to the end-user and the big margins allowed him to manufacture more CD’s/ tapes and invest the proceeds back into marketing and future projects.

Own your masters

In the 90’s most prominent hip hop artists were signed to major labels but that came at a heavy price.

When you are signed to a traditional record deal, you would have to relinquish all rights to the music that you record. Yes that’s right and it is completely legal.

Record labels spend money on production and studio sessions, marketing, promotions, manufacturing, in order for artists to look like superstars – with the hope the music sells so they can get a return on their investment. It’s a basic business principle.

But owning your master recordings is a better option (at least in the long-term). In order to own your masters you have to do what the label does. But this time you will be investing your hard earned cash in your own career. That’s how it works.   

Know when to get out

Come on let’s face it, nothing lasts forever. And in business it is important to have an exit strategy.

When No Limit Records was at its peak in 1998-99, Master P invested his profits from music into a wide range of unrelated businesses, from Sports Agencies, a marketing company, real estate, to retail shops.  

However it was also reported that a major label wanted to acquire No Limit for a whipping $120 million but Master P turned it down.

By the early 2000’s P and No Limit was dealing with multiple lawsuits from former artists, which eventually forced the label to close shop and declare bankruptcy.

Conclusion

No Limit Records is long gone but the lessons above still apply to the modern day artist, label owner or entrepreneur.

If you followed Master P and his label, what is your favorite No Limit moment? You can leave your comments below.