For music lovers the world over, operating your own record label may be a dream come true—or it could be a nightmare waiting to happen. As is the case with starting any business, starting a record label requires more than a mere love of your wares (in this case, music). However, South Africa presents its own hurdles and opportunities when you start a label. While South Africa’s rank as an emerging player in the worldwide music market may make globalization of your albums more difficult, according to Music Industry Online, it may also prove a more hospitable market for emerging labels. Indeed, the Association of Independent Record Companies South Africa (AIRCO) claims there is a growing appreciation and demand for independent record labels.
Build a Business
File necessary documentation. In South Africa, according to Doing Business, you will first need to reserve the name of your record label; this is done by filling out the CK7 form, which is available from the Companies and Intellectual Property Registration Office (CIPRO) website (http://www.cipro.co.za). Plan to list alternative names on the CK7 form, in case your preferred name has already been claimed.
Once you have registered with CIPRO, according to Doing Business, you need to register with the South African Revenue Service (SARS) for taxing purposes, the Department of Labor for unemployment insurance, and the Commissioner in order to comply with the Compensation for Occupational Injuries and Diseases Act.
Put your paperwork in order. Install an accurate accounting system (or hire an accountant) to keep track of all tax and income information, and prepare the necessary legal documents. Music Industry Online recommends consulting a music lawyer about contracts for artists as well as for any labels and publishers with whom you choose to work.
Join AIRCO (Association of Independent Record Companies South Africa) and RiSA (Recording Industry of South Africa), two organizations in South Africa dedicated to helping the recording industry succeed.
Consider your target market and choose a genre. Don’t be scared into thinking that only pop music sells. If you love the sound of traditional South African instruments like the ramkie and mamokhorong, chances are other people do too. But research what music sells and make sure your business plan can survive.
Find and sign musicians. Get out of your office and walk the streets of Cape Town and Johannesburg looking for street musicians who have a solid sound and captivated audiences. Go to music festivals and nightclubs. Hit up talent shows. Find them.
Record. You’ll need a good producer. While some musicians will already have a producer they prefer to use, others will not. Similarly, some producers will have their own studio you can rent; others won’t. Consider using AIRCO or RiSA's resources to find and develop relationships with South African producers and studios. According to RiSA, they have more than 800 members, so they should have the professional contacts you need; AIRCO also has a large membership, all of whom are available through an online database.
Market and distribute. Again, use your AIRCO and RiSA contacts to find quality designers (for the cover art) and distributors. It’s tough to get a distributor, so plan to do a lot of legwork at first.