5 Lessons Big Record Labels Learned From Independents

Business Practices of Independent Imprints Have Proven Successful

Just like musicians, major record labels are being forced to cope with a changing music industry. It's interesting to note that the strategies they're using now have been used by independent record labels for years. Indie labels long ago figured out that it was possible to keep its musicians happy and be both profitable and fair. Here are five indie label lessons the big guys should be learning.

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Sharing Profits With Artists Works

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If the label has a distribution network and the musicians have a finished master ready to go, going 50/50 on the profits of a record's sales is a fine deal. These kinds of deals are common at many small labels and here's why: The offer of a bigger profit share is a way indie labels on a shoestring budget can attract musicians to deals without big advances. Obviously, of course, it offers musicians a chance to make more money on their sales.

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Multiple Rights Deals Are Nothing New

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Also known as 360 deals, arrangements where record labels may get a percentage of such things like merchandise sales and endorsements in exchange for actively developing such opportunities for their artists.

Indie labels have been doing this kind of thing on a much more informal basis for years, and often for no additional cash. It seems that indie labels have known for a long time that a label needs to be invested in everything an artist does for both to be successful.

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Deals Don't Have to Be Complicated

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Major labels are supersized corporations, so it's no wonder their contracts are so complicated. Contracts with indie labels can be drawn up with the label and the artists working together on terms that suit all parties. As long as you cover the terms of the deal, the music to be released, how the money will be split up, expense caps, advances, and stock issues, you're good to go. 

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Your Deals Can Be Fair for Everyone

Record Store
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Who wins when a musician is tied into a deal they desperately want out of? A record deal doesn't have to be a life sentence for a label to make money. Mutually beneficial relationships are good for business. That which is fair for labels and fair for artists are not mutually exclusive, and independent labels have had this figured out for a while. 

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Believing in Your Artists Helps

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It's easy for most indie labels to work hard because most of them love the music they produce. They're invested in their artists' success, and not just financially. When you believe in the music you're working with, your job will be easier and more enjoyable. Plus, in the music industry, people appreciate seeing other people excited about the music they're working on. It's not inspirational to work with a company that treats you like just another asset, or with producers and other executives who are going through the motions. A genuine belief in the music and musicians a label represents will be noticeable and could help journalists, radio, promoters, and others get excited about it as well.