The Do It Yourself Record Company by Donald S. Passman

By Donald S. Passman, author of All You Need To Know About The Music Business

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     Historically, record companies held the keys to the kingdom. It took a large organization to manufacture and ship records to stores, meaning things like manufacturing plants, warehouses, sales forces, shipping people, financial controls, etc. Also, in order to really sell records, you had to get your music on the radio and MTV, which took a promotion staff and a lot of money.

    In those days, the record retailers were so big that they wouldn’t bother with small players. That meant it was hard to get your product on their shelves if you didn’t come through a record company. Also, frankly, the big record companies paid retailers a lot of money to position their product prominently in the stores. So even if an artist managed to get their records into the retail bins, they’d likely get buried in the back. If, somehow, the records started selling anyway, the retailers would pay the artist late (if at all), since one little player didn’t matter to them. On top of all this, as we’ll discuss when we get to pressing and distribution deals (on page xxx), the artist had to put up the money to manufacture the records. If the stores didn’t sell them, they’d be returned to the artist, who’d lose the manufacturing costs, plus the freight costs in both directions. So it took a big player to absorb those kinds of risks.
Today, things have really changed:
1.    While it’s still difficult to get your product into stores (now it’s because they carry so few titles), physical retailers are becoming less significant as CD sales decline.  Conversely, digital is on the rise, and anyone can get their music distributed digitally.

2.    Radio is still very important for mainstream artists, but it’s become a very narrow channel, meaning it plays only a limited range of music genres, and not a lot of different titles.  Because of this, alternative ways for people to discover music are becoming more important, and the Internet (which anyone can access) is one of the keys.
3.    A direct relationship with fans is the next generation of marketing, and young artists are proving more savvy in this area than a lot of established companies. 

On top of all that, when you make a deal with a record company, you give up control of your recordings (as well as other aspects of your life, such as the ability to do music for films, commercials, concert videos, etc.), and you also give up a chunk of your income from both record and non-record areas (as we’ll discuss in a bit).
So, why would you want a record company?  Well, if you’re a niche artist (for example, a jam band, backpacker, or indie rock band), and you’re happy staying in your niche and selling to a small group of fans, you may not need or want a record deal. It’s possible (through outfits like Tunecore) to get your music to iTunes, Amazon, and other digital retailers, and you can make a living doing gigs, promoting yourself directly to your fans, and selling your tracks. Because your genre limits your potential audience, you’ll often make more money by doing it yourself than you will with a record company. For a record deal to make sense, the company has to generate more money for you (after they take their piece) than you would get by selling less product on your own. With niche artists, that’s often questionable.
If you’re more mainstream, such as pop, rock, or country, this is a much tougher question. You can of course set up a killer MySpace page, build a fanbase, and sell directly to them. Since your music has a wide appeal, if you break through, you’ll make far more money by keeping the record company’s share of the pie, not to mention keeping all of your non-record income. But here’s the problem: The same way that it’s easy for you to set all this up, it’s easy for everybody to set this up. There are over four million bands on MySpace, and that number is growing.  How’s anyone going to find your music?
There are some “virtual” record companies who can help. These companies, who were started by talented people who lost record company jobs when the industry melted down, will do everything from sales, marketing, promotion, etc., yet let you keep control of your destiny.  However, they charge pretty heavily for these services, which most new artists can’t afford.  Thus, they’ve mostly been successful with artists who’ve already released a few albums (and therefore have a fan base), but are out of their record deals.  For this reason, a lot (maybe even most) mainstream artists are still looking for record deals. 
Having said all that, young artists today are working the Internet and new media far better than the established record industry. The future of music marketing is to know who your fans are and to contact them directly.  In the past, no one had any idea who went into record stores and bought the multi-million sellers, or who was listening to the radio when they were played millions of times. Today, between the Internet and cell phones, it’s possible to know exactly who likes your music.
    Young artists have gotten very sophisticated about building a database of their fans. For example, at their shows, many artists give away something (pins, stickers, hundred dollar bills, etc) to everyone who signs their mailing list. The artists then promote their shows, recordings, and merchandise through email and mobile phone text messaging. Some artists even do lifecasting, where they’re communicating with fans a number of times each day. For example, they might iChat on the way to a gig; blast out backstage updates through Twitter or Kyte; send pictures of themselves on stage; forward videos of themselves in the bathtub with rubber duckies; etc. Even if they only build their fan list with a few more people at each gig, if they keep at it, they can get enough to generate a buzz on MySpace and similar sites. 
So these days, more than ever before, it’s possible to build a career on your own.  Or if not a career, at least a solid base from which to launch yourself and get the attention of a record company, if you decide to go with a record company. 
    Now get out there and do it!

Comments

[henrylow]

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[Dennis White]

okay... I'll be sure to start passing out hundred dollar bills at my next show. (?)

[pieter vos]

The platform Sellaband , that Mars Mertens mentions , is known for never keeping their promises , some of the worst CD's ever , and being a concentration camp of bad taste .

HAVE FUN !!! yours Pieps

[Oxana]

D.I.Y. MUSIC COPYRIGHT

The world of music copyright is evolving. Monopolies of collecting societies are under pressure. Songwriters complain about a lack of benefit, music users about non-transparent and high tariffs. Collecting societies are old-fashioned. Now is the time for online DIY copyright management.

VillaMusicRights is a website in English, Spanish and Dutch, and plays a role as a facilitator in the contacts between songwriters and users of their music. This means you can upload your music and arrange your rights. The music will be stored in a database and users can download it.
Downloads for home users are free, but business users have to pay a modest amount of money. Both songwriters and users have to register. Songwriters have to declare to own the rights to the music and users have to declare that they won’t use the music for other purposes than agreed.
VillaMusicRights takes care of payments between songwriters and business users and receives a commission in remuneration of the cost of display, advice and transactions.

A lot of music genres already are represented in the database, from rock to reggae and from blues to easy listening.

Website: http://www.villamusicrights.com

[Mars Mertens]

If you want to completely Do It Yourself and have an existing strong fanbase and need funding to make your new record, videoclip or set up that tour. Then you can use a platform like SellaBand to raise the money. The rights stay with you as an artist and you keep full freedom.
So then you still have a choice to distribute it yourself or make your deals with distributors or license your record to a label and publishers to use their network to reach more people.

[Carstereowars]

DIY way is the only way for us. Sonic Bids has been great and has helped us to get on several publishing houses books and managed to score a few sync deals from it. Our website at www.carstereowars.com gets quite a lot of traffic as does our Myspace page. I went to a seminar recently by Ariel PR who discusses solely using the internet for publicity and how to do it. It's the only way really, no-one is going to come along and discover you anymore it's really all about perspiration just doing as much as you can online.

[Rob C]

I went the DIY approach too after a lot of research. I ended up using a marketing plan based on the one at

http://www.currentthread.com

It's not perfect, but it helped me get started. Got my song on the radio and an article in acouple different magazines. Took a lot of work but hearing myself on the radio made it worth it.

That plan mixed with what TuneCore offers has been a pretty good combo, especially for the price.

Rob C

[Vivyouell]

Dear Mr Passman and Tunecore,
With impeccable timing, I'm currently jogging my way through the latest edition of "All you need to know about the Music Business"), this is a great article.

Although I have successfully licensed to an aggregator (after particularly aggressive marketing and not a little luck) Tunecore comes well-recommended to me by others and I have been able to recommend on
Thank-you both
Viv Youell

[The Psychedelic Ensemble]

Zedrick (in his post above) is dead on. I've been in this business for over 30 years, released several albums on major labels, published widely, and performed worldwide with leading performers in the largest and most prestigious venues. Make the best music you can make and, if the music is truly special and merits extensive exposure, it will find its way.

[Allan]

I think most advice offered regarding DIY Music these days is pretty poor and only seems to represent the obvious mentality and ways of doing things. It's okay informing people about 'getting out there and achieving your dreams' - but some, if not most people, seem to forget the absolute power and influence the major labels and companies have over everybody. This will never change. I've seen and heard plenty of good artists via myspace, various message boards, youtube etc, but these artists are either signed to small indie labels who can only do so much, or these artists are signed to their own DIY label set up, which lacks the kind of financial funds in order to seriously promote their music. No book on earth no matter who it's written by will ever offer you a route around the major labels whilst making a huge splash in the industry - because it isn't possible. The only real advice I can offer anybody myspace artist is to CHEAT. All of the majors and their sister labels cheat. And the DIY community needs to learn how to do this too. Otherwise, nothing will ever change in this industry. It's okay been able to sell your music digitally around the world from your bedroom, but what good is this if you cannot afford the high promotional expenses that enable music industry success?

[J. West]

I am a big do it yourselfer, self proclaimed in most cases...I actually wrote a ebook called The Do Yourself Kit which is alist of sites and info from sources that I have used to sell nearly 1000 units on Itunes....independantly.

My particular genre is Hip Hop, but I take a major approach in trying to sell records. I have over 600,000 views on myspace..nearly 50k views on Youtube and numerous online interviews, and music profiles and shows that are all used as avenues to promote and sell my music.

I have noeborn music signed with 6 songs to seek tv/film, video placements and I had a song featured on the video game midnight club los angeles. More info on me at j-mill.com.

I believe its possible to sell records without a label but it takes time and patience to build a loyal fan base that supports your music...with social networking sites and other music sites I am able to reach hundreds of thousands of fans with the click of a button.

[David Goodall]

I liked Dancingmoondog's post - it does depend on your definition of success: I make a good living from music, scoring films, TV programmes and commercials. I'm happy. The music I write for myself sells hardly anything, but I am content. If you need/want to break big in music - then go for it; but if that isn't your goal, don't feel it's the be-all and end-all.

My late uncle Joe said (in Italian): "If you want to be happy - you can do it, and you might get rich. If you want to be rich - you might get rich, but you'll never be happy" (It makes sense when you think about it).

Al the best,

d

[Dancingmoondog]

If you do your music & your music finds people who think it's good. If you don't want to make a million dollars a second, but want to do your music. Keep playing, writing, promoting & believing in yourself. Then you will "make" it. Now what does "make it" mean? That's something you have to figure out. Music is NOT free. We who make it. Truely make music do not get it for free. It cost us in spiritual currency, not to mention the actual monetary cost of gear & time spent learning to play sing etc. To he'll with how many are doing it. Honestly most of them suck & will move on to jobs. Music is my life & I'll never stop making it.

[Gustav Hoffman]

I would hope with all this savage saturation that the listening public would become more intelligent. The millions of bands out there floating in a sea of mediocrity would seem what it really is- an island of plastic refuse. Good artist, you know the ones who do it because they couldn't imagine life any other way, will always have their own kind of longevity not affected by a particular label. So the way I see it you must be smarter and make better music than the others out there. And with that it might be possible to bring music back into the realm of something not disposable. Gustav Hoffman

[LUNNOtheband]

Yeah! We did it at home too. The beauty of DIY via Jango ( http://www.jango.com/music/LUNNO ) and ReverbNation ( http://reverbnation.com/Lunno ) are all about data ( fans demography, similarity with fans, etc). By having those, it makes us easier and more sensible to make an album release campaign and link them into our online retailers.