September 19, 2020

Typical Record label Expenses in 2020

record label expenses

Are you considering the idea of starting your own label? The following post will take you through the common record label expenses.

Running a label is hard work but you also need funds to make an impact especially as an Indie. Without wasting time, let’s get into it.

Sound Recordings

Studio Costs: Studio time costs money, for example is your genre is Jazz or Rock you might want to hire a more advanced studio.

Producers and session musicians: In some cases the artist might request a live instrument to be added to the production. And as a label you will most likely foot the bill.

Equipment rentals: Depending on the studio set-up and genre, additional instruments such as bass guitars, drums might be required.

Mixing: This is inevitable. Every song recorded has to go through the mixing phase.

Mastering: Same as mixing, mastering a project is a must and good engineers cost money.

Marketing & Promotions

Graphics & Artwork: Hiring graphic freelance graphic designers, photo shoots, etc.

Public Relations: This will include hiring Radio Pluggers, securing TV and radio interviews, etc. All this comes at a cost (Unless you can them yourself).

Music Video Production: You need to choose the location, hire the director, wardrobe, editing and pay for the catering.

Online Promotions: You should expect to pay for things such as website design or development, domain registration, hosting fees, Social Media Sponsored Ads and Google Ads. All these tasks can be outsourced to a Digital Marketing Agency that has experience of working with artists.

Offline promotions: Posters have to be printed, promotional merchandise such T-shirts should not be excluded (especially for a big release).  And the duplication of promotional CD’s which you can send to music compilers.

Distribution

Manufacturing fees: If you have an old school distribution deal (distributing physical formats); expect to foot the bill for manufacturing and distribution.

Digital Distribution: Data costs to upload songs, distribution fees (pay-per-release).

Affiliation Fees

Mechanical Fees: If you manufacture physical products like CD’s, you are required to pay collection societies such CAPASSO a mechanical fee. CAPASSO membership and registration will also cost you 200 ZAR

RISA membership: In order to become a RISA member, you have to part with an annual fee of 500 ZAR per year.

Logistics

Courier fees: Physical products such as replicated CD’s and merchandise have to be shipped to your storage or warehouse.

Maintenance costs: If you are using your own vehicle to conduct business, the maintenance costs will increase significantly.

Car Hire: If you don’t have a car and want your artists to travel and perform, hiring a mini bus or van might be the solution. But this doesn’t come cheap depending on the make of the vehicle.

Additional Expenses:

  • Data and airtime
  • Rent
  • Office Supplies
  • Accounting costs (Bookkeeping, Tax filing, VAT registration, etc)
  • Business registration

Summary

Running an Independent record label doesn’t come cheap. As a label owner, you have to foot the bill for every expense listed above and hope to make a profit (if you’re lucky)!

Of course record label expenses can increase or decrease depending on how your company is set up.