LEGAL PAD: Start Your Own Label (Part 2 of 2)

RELEASING AN ALBUM WITH COAST-TO-COAST MARKETING AND DISTRIBUTION was once a high cost, high risk game.  Today, startup labels have access to endless low-cost resources for promoting, marketing, and distributing their acts.  Here are some of the most popular and cost efficient ways to distribute your label’s catalogue.

Spotify: After years of success overseas, Spotify launched in the United States in July and has quickly become a prevalent way for consumers to find music.  This company should be a go-to for any label and will likely be of even greater impact after it pairs with Facebook this fall.  While there are numerous ways to get your label’s music on Spotify, the easiest and fastest route is to contact an “aggregator” (i.e. middleman) that has an agreement and delivery process in place with the service.  To find an aggregator, go to www.spotify.com and click on “Labels & Artists” under Quick Links.  Basically, an aggregator works like this:  you create an account, sign an agreement, and pay a per album/song fee. In return, the company gets your song on Spotify.  Unlike the online distributor arrangement (below), many aggregators simply charge a fee to put the songs on Spotify.  Your label will get 100% of the proceeds, retain all legal rights, and can distribute and track your recordings at your leisure.  As always, read the fine print before signing up.  If you want a recommendation, use TuneCore; they’ve been around for years and have a great reputation for quick turnaround.

*  A lesser-known fact regarding promotion of your bands on Spotify:  The company gets all of its artist biographies from All Music Guide and Wikipedia.  According to the service, “If you want to add or update your biography, do it on Wikipedia and AMG.”  (Make sure to check Wikipedia’s “notability” requirements before creating a band page or you’re likely to see all that hard work deleted by one of Wikipedia’s zealous editors).

Grooveshark: At the DIY level, exposure is priceless.  Cut off the ability for someone to stream your label’s artists and you’ll severely limit their exposure.  While primarily driven by user uploads, Grooveshark has negotiated blanket licenses with nearly 1,000 record labels, and now both the labels and Performing Rights Organizations make money from the usage.  Although at a DIY level you’ll probably not yet have the clout to negotiate a license with Grooveshark, you should take a proactive step and upload/monitor your label’s music on the site.  This way you’ll ensure that – at a minimum – the artwork, titles, and names are all accurate.

*  Bear in mind that Grooveshark, like similar sites before it, remains legally controversial within the industry.  Both Apple and Google have removed Grooveshark apps from the iPhone and Android, respectfully, and its future remains uncertain.

Facebook: Start a page for the label and make sure each band on your roster has a corresponding page.  Facebook makes it easy to upload and stream music with their “My Band” application, run by Reverbnation.com (a popular sharing site in its own right).  The terms specifically state that neither ReverbNation nor Facebook’s users have any rights to sell or commercialize your music.

*  At the time of registration, you’ll be given two choices regarding the type of license your label will offer.  Option 1 allows users only to listen to the song online. Option 2 allows users to download and store your songs, effectively acquiring the same rights as they would by purchasing the music.  At the DIY level, this choice carries with it the balance of exposure vs. turning profit.

Online Retailers: To get your song on iTunes, Amazon, Napster or any other mainstream online retailer, you’ll want to get your label hooked up with a digital distributor, which is essentially the middleman required to get your songs to an online retailer.  It’s easy, cheap and your label’s songs will be available for download in a matter of weeks.  Some of the larger distributors are IODA (Independent Online Distribution Alliance), The Orchard, TuneCore, and CD Baby.  Most of these companies charge low annual fees and take 10-35% gross of each record sold.

*  For some of the legal ramifications of Online Distributors Contracts & UPC Codes, see Performer’s Legal Pad from January 2011.

Pandora: Pandora is an excellent way for people to find your music without actively seeking it out.  The company’s “Human Genome Project” allows targeted listeners to find your music who have already expressed an interest in similar genres or artists.  With 40 million active users and growing daily, Pandora is a no brainer for your label’s distribution plan.  For a step-by-step guide to submitting your label’s catalogue on Pandora, go to http://submit.pandora.com.

* Unlike many other sites, you are specifically required to have a UPC and the albums must be available on Amazon as a physical CD (not just as MP3s).  This may be an issue for labels going strictly digital.

Adam Barnosky is a practicing attorney and writer specializing in entertainment law and business development. He has worked with musicians, actors, and playwrights in Boston and New York City. Find him on Twitter @adambarnosky.

DISCLAIMER: The information contained in this column is general legal information only. Any use of this column does not create or constitute an attorney-client privilege. Consult your attorney for all specific considerations.

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