How to Start a Record Label in Ohio
Record labels are businesses that oversee the promotion and development of musical talent. Record labels are divided into two groups: major labels and independent labels. If you have a substantial amount of money to invest, you can create a major label in Ohio by applying for the necessary business permits and licenses; however, if you have little start-up money, creating an independent label can be just as fulfilling and profitable.
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Things You'll Need
- Required licensure/permits
- Incorporation application
- Application fee (varies)
- Tax EIN (Employer Identification Number)
- Attorney
- Artist contracts
Instructions
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Find a location to establish your record label. You can easily run an independent record label from a home office; however, if you wish to establish a larger label with various departments and employees you must secure office space. Check with local jurisdictions regarding zoning permits for operating a business out of your home. The amount of office space required is dependent on whether you're operating a major record label or an independent label.
Major record labels often consist of numerous specialized departments (legal, accounting, A&R, artist development, sales, street teams, publicity, etc.), which are overseen by a board of directors. Major labels have millions of dollars in capital to produce and develop artist careers. Independent record labels are much smaller in comparison.
While the basic duties of an independent label are similar to a major label, the number of employees and signed artists are much smaller. This allows for more intimate connections between the artists and the label, as an indie label is more personally involved with the development of an artist.
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Establish your record label as a legal business entity within the state of Ohio. Search the Ohio Secretary of State's Name Availability Database to ensure your record label name is available to register. After you have verified your record label name is available, incorporate the label by filling out the appropriate Domestic Business Entities application forms. If you're starting a standard for-profit record label, fill out the For-Profit Corporation Form 532 Initial Articles Of Incorporation; however, if your label is a partnership with several individuals, fill out Form 535 Statement of Partnership Authority. Speak with an attorney regarding the appropriate incorporation form to submit. Each application requires an application fee.
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Apply for an EIN (Employer Identification Number) through the IRS. You may apply for an EIN online through the IRS website, by calling 800-829-4933 or by mailing Form SS-4 to the IRS. You must have an EIN to create business bank accounts, set up business credit cards and prior to paying employees or artists.
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Review demo CDs from musicians with the specific genre(s) you represent. You can find potential artists by attending local concerts, musician venues or by browsing online music portfolios. Selecting artists to represent should not be rushed. The talent of the artists you sign will determine the success of your record label.
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Hire an attorney and have her draw up artist contracts. Although every recording contract can vary, there are several basic questions you should ask yourself when creating a contract: Will you split the recording costs for a CD? Do you expect musicians to deliver finalized master albums? Will you pay any advances to the artists, if so how much? What is the royalty structure? Will the label and the artist split profits 50/50, or will the label only pay royalties after all investments have been repaid? Speaking with an entertainment lawyer can help answer these and other vital contract questions.
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Promote your artists by contacting local and national radio stations, TV networks and print venues (such as magazines, newspapers, industry trade papers, etc.). Set up performance dates by contacting nightclub and concert promoters. Ohio is home to several music festivals throughout the year. Contact the development department for music festivals to place your artist(s) on the festivals' performance roster.
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Continue to develop the career of your artists. Only take on a new artist if you feel you can handle the load of another client. Be prepared for long workdays and constantly communicating with promoters, artists and performance venues.
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Tips & Warnings
If you are starting a record label to promote your own album, you must have another employee promote your music to the media and venues. Promoting your own content is not well-received within the music industry.
Clearly outline the financial responsibilities your record label has over an artist to avoid any confusion and potential legal recourse.
References
Resources
- Photo Credit record player image by jeancliclac from Fotolia.com
