With events still largely shut down, countless people in the music industry have lost their revenues, even their livelihoods. And while people aren't out dancing, they're still buying and listening to music.

While the money isn't always significant, running a record label is one of the few pathways currently open to engaging the music scene. Certain label heads suggest that now might be the perfect time to launch a new independent label, taking advantage of the current disruption in the field. Coming out of the pandemic, promoters will be looking for new music and labels to inaugurate a new era of the scene that may look very different from what came before.

This guide will serve as a starting point for people planning to set up their own electronic music label. With digital distribution and Bandcamp, it is easier than ever to start a label. However, there are still important choices to make along the way. We asked some of the scene's experienced label heads for guidance on these tricky questions.

Some of the following advice regarding copyright law and setting up a business may differ from country to country.

Before you start

Launching a label means you're going to be covering a lot of different roles. In one day, you might play manager, promoter, agent, creative director, A&R and PR, all rolled into one. Here are some things to think about before you get cracking with your first release.

Label identity

While major labels today present themselves as catalogues rather than curators, in the electronic music scene, labels remain prominent, trusted by listeners to foster fresh talent.

The first question is: what is your label's reason to exist? In many cases, passion is the motivation—you love the music and want to get involved. Maybe you have friends sitting on great unreleased tunes or a vision of where your local or online scene should be heading.

This is a common starting point. Lara Rix-Martin of Objects Limited says that at the most basic level, "a label is saying: 'I really like this music, and I think you should listen to it.'" As a label head, you are the main ambassador for your music, and your passion will shine through, contributing to its success.

Beyond this, many labels succeed because they fill a gap in the scene. Rix-Martin started her label as a response to the overwhelmingly male world of experimental music. "For me, it was born of anger," she says. "I felt there needed to be something geared towards nurturing female and non-binary artists, and I was let down by what was already out there."

Other labels identify shifting trends in the culture. Jimmy Asquith of Lobster Theremin says he was inspired to start a label after witnessing the explosion of new vinyl labels across Europe in the early 2010s and noticing their absence in the UK.

Asquith's label quickly became associated with a specific aesthetic—heartfelt house intimate with dance music history—and this clear identity contributed to its success. Other outlets like Central Processing Unit and Nervous Horizon have become known for a signature sound, turning into "buy-on-sight" labels because listeners know what they're getting with a new record, even if they've never heard of the artist. Equally, some outlets have become renowned for their esoteric curation, such as The Trilogy Tapes or Firecracker Recordings.

A label's core identity can also shift over time. Miles Mitchell, who produces as Mr. Mitch, started his label Gobstopper in 2010 as a home for the then-underrepresented genre of instrumental grime. Over the years, however, his tastes evolved, and the label's music remit expanded. Following the death of George Floyd last year, he was inspired to start signing only Black electronic artists. "I noticed that when I play, I'm often the only Black artist on the lineup, playing to mostly white audiences," he says. "There needs to be a home that gives people something to look up to. It can be hard when you look around the scene and don't see people who look like you. It makes you feel like an anomaly, but you're not."

Developing your network

Many small labels live and die by the strength of their community and dedicated fanbase. It is essential to root yourself in your local music scene or like-minded online communities since people who share your taste will be your first listeners. "Look after and work in your own community, and it'll feed back into you," advises Stephen Bishop of Opal Tapes.

While it may be harder to build a community when physical venues and record stores are closed, the internet offers many opportunities to connect with like-minded musicians and labels. Mitchell mentions that his instrumental grime community was based on forums and instant messaging long before a pandemic kept everyone home. "Today, I mostly release artists that I've found online," he says. "In fact, I've only met a few of my label's artists in real life."

Several label owners stress how much they learned by asking experienced label heads for advice. Contact the labels you love and ask specific questions. Smaller labels are often active on social media and are happy to help people who are starting out.

Finances

No matter how good your music is, you're unlikely to make a profit from the very beginning. Start-up costs for a label are not prohibitive, especially if you work with friends and release digital-only. Still, you should expect to invest a little money to get started, paying for things like artwork and, when they are permitted again, label events.

Rix-Martin started Objects Limited with £200 in her bank account and had four digital releases in her first year. "Be really good to your artists," she recommends, "but be really mean about what else you spend money on."

'It's an age-old thing," says LuckyMe's Dominic Flannigan. "Do stuff for cheap or free and just get in and try and keep swimming. It's old advice, but it's still relevant."

Alex Rita and Errol of London label Touching Bass started out by funnelling earnings from DJ gigs into the label, but there was no profit at the beginning. "You need to be aware that it takes time, and you have to really love it," says Rita. "While we can't make enough to sustain ourselves just yet, there's still so much joy in going on this journey with an artist, from making the album cover to pressing the record and finally seeing the artist hold it in their hand. That's why we do it, the joy of seeing someone grow."

Your first release

If you've decided to start a label, you probably already have artists in mind that you'd like to work with, or you know people making great music. If not, listen to independent radio or scout SoundCloud and Bandcamp to find talent. Outside of the pandemic, the opening acts of local events are often great sources of untapped talent.

Formats

One of the biggest questions for a label is how you will release your music. Will you go digital, physical, or both? Streaming through services like Apple Music and Spotify accounts for almost 80 percent of music consumption in the USA and 70 percent in the UK, so if you're not going to be on streaming services, you're missing out a big slice of listeners. On the other hand, the dance music community has always placed a premium on owning music, both physically and digitally, whether for DJs or collectors. This makes it slightly easier to stay away from streaming or release vinyl-only than in other genres.

If you want to release physically, you will probably be considering vinyl or cassettes. If you go digital, you can choose to sell music as downloads through platforms like Bandcamp, Juno and Beatport, or to make it available on streaming platforms.

Your decision about how to release music takes in many factors: how much money and time you have to invest in each release, the kind of audience you want to reach and your own values and opinions of the music business.

Digital: Bandcamp and competitors

"Digital is a no-brainer now because it's such a big source of income" - Jimmy Asquith, Lobster Theremin.

Bandcamp is the most straightforward route to becoming a legitimate label. You can create an account and have your music online practically overnight. Bandcamp is popular with DIY labels for several reasons. The platform divides profits relatively fairly (compared to competitors), taking a 10 to 15 percent cut of revenue, depending on sales volume. It also gives you a website where you can sell music and merchandise, provides assistance with sales statistics and reports and has a large, engaged audience of alternative music fans. You can sell music in lossless formats and will usually receive the money within 48 hours. Bandcamp has also gained a reputation in recent months for regularly waiving its revenue share to support artists during the pandemic.

Placing your music on other online stores is different. Unlike Bandcamp, platforms like Bleep, Juno and Boomkat are selective about what they sell and ask new labels to contact them directly or go through a digital distributor. These will be discussed in a later section.

Digital: Streaming

"Streaming is completely essential" - Jimmy Asquith, Lobster Theremin

"Streaming is killing us" - Lara Rix-Martin, Objects Limited

There is a wide variety of opinions on streaming platforms such as Spotify, Apple Music, Tidal and Deezer. They are criticised for not paying artists fairly and shifting the cultural principle that it is worth paying specific artists money to hear their music.

However, streaming appears here to stay and can present an opportunity to reach a huge listener base, particularly if your music is selected for a platform's curated playlists. Even if you or your artists don't make significant revenue from streaming, it can be worthwhile making music available to stream for the sake of exposure.

Flannigan is ambivalent about streaming platforms, saying they can be useful but that his label would struggle to make streaming the primary source of income. He compares the question of whether to go on streaming platforms to the prisoner's dilemma. "You need to build audiences on there to see any meaningful income," he says, "but then you've helped migrate audiences to a place where you get paid a lot less than you would on your own platform."

Your final decision will come down to your judgement on the ethics of streaming and thoughts on how best to reach your audience. If you do want to get your music on streaming services, it's best done through digital distribution, discussed in a later section.

Physical: Vinyl

Despite the prominence of CDJs since the 2000s, vinyl never went away in the dance scene. Meanwhile, mainstream vinyl sales in the UK have increased every year for the past 12 years, making pressing vinyl a viable income source for your label.

Rix-Martin thinks the question of whether to press vinyl depends on the audience you're targeting. Her label's first physical release, Ziúr's Deeform EP, was a risk for the business. "I thought it was too risky, and I was right," she says. "It's cold, but you have to look at who actually buys what. It's mostly older men who buy vinyl. So if you want to press something on vinyl, you have to know that your demographic is likely to buy it."

Another reason to press vinyl is to appeal to record collectors and vinyl DJs. Chloe Frieda, of London label Alien Jams, pressed every release on vinyl for her first four years of operation. "I felt like people respected vinyl the most, and I wanted to give the artists that platform," she says. Ultimately, though, she felt restricted by the long manufacture times of vinyl. Pivoting to cassette and digital helped her put releases out more regularly.

Going physical may also be its own form of promotion since local shops are a strong presence in the electronic scene and often highlight releases pressed to vinyl. "Independent retail looks after good new music in a way that big stores don't," says Flannigan, "and if you don't do vinyl, you're less likely to catch that attention."

Rix-Martin had mixed feelings about releasing vinyl in the pandemic. On the one hand, records sell better when their artists are touring, so that promotion boost would be unavailable when clubs are closed. However, Planet Mu has seen solid physical sales this year. Lobster Theremin has seen a massive uptick in vinyl sales during the pandemic. Rix-Martin suggests fans might have a little extra money to spend on records since they're not going out. "So if we're going to make records," she says, "make them something special, so fans have a real reason to choose the physical release."

If you decide to go ahead with a vinyl pressing, make sure to plan out the costs in advance, specifically for mastering, artwork and the pressing itself. Bear in mind you won't see any return on this money until several months down the line.

Find a few local pressing plants (here's an online directory) and compare quotes and services. Be aware that it takes time—two or three months is the average, and this might be longer due to delays around the pandemic. "Some people think it's instantaneous, like digital," says Asquith. "But a vinyl record being pressed is immensely complex. To get it right and into stores across the world is a huge and old-school process."

Once you have chosen a plant, decide which tracks will go on your record and in which order. Get your music mastered and order a test pressing. Then decide how many you will press. Several label heads recommend pressing 300 white-labels to start because the economies of scale principle mean the price difference between pressing 100, 200 or 300 copies is not huge. You might budget to make selling your 300 records the break-even point for the entire physical production, working backwards from that point to determine how much you can spend on each stage. Then any money you make through digital will be profit.

Physical: Cassette

Cassette tapes have made an unexpected comeback over the past decade. If you want to legitimise your release with a physical product but without vinyl's investment of time and money, tapes are a good alternative. Labels such as Opal Tapes, Posh Isolation and Ascetic House have made their names on cassette releases.

This medium shines because of its flexibility, relative cheapness and easy ability to create limited runs. Bandcamp has a big tape community that will push sales further, while several music sites do specific round-ups of the month's best cassette releases.

As with vinyl, the best way to release on tape is to contact tape manufacturers in your area and get a quote, comparing available options.

Mastering

If you are pressing to vinyl, it is essential to master your music—this evens out the extreme frequencies in your music and prevents the needle from jumping out of the groove. It will also make it sound better, optimised for the specific format. If you are releasing digitally only, mastering is not strictly necessary.

Many labels master every release as a matter of course. It can make music sound crisper, fuller and ready for the club. When Jimmy Asquith was starting Lobster Theremin, he wanted his music to have the punch of a Shed record, so he took tracks to Dubplates & Mastering in Berlin.

Labels tend to build strong contacts with individual mastering engineers who they use time and again. It's important to look after these relationships by paying on time and submitting music in the correct format.

However, if you're running on a very tight budget and only releasing digital, mastering is not essential. As long as the track has a sufficiently high loudness level and no major frequency imbalances, most people downloading your mp3 from Bandcamp and listening at home are unlikely to hear a difference. "You can get it mastered if it sounds shit," jokes Rix-Martin, "but if it's a shit track, it's always going to be a shit track."

Artwork

With the current flood of new music both online and in stores, imaginative, eye-catching artwork can make your release stand out. When starting out, label managers often ask designers and artists they already know to create imagery, which can save money. Where Objects Limited generally spends around £50 on artwork, a label like Planet Mu spends around £500.

When deciding on your artistic direction, it's important to achieve a balance between the visual aesthetic of the label and that of the artist. Some labels stamp each record with an identical, instantly-recognisable image, emphasising their own brand over the artist's. However, you might want to give the artist's visual identity more prominence. Flannigan, who brings a design background to his work at LuckyMe, encourages this. "You don't meet in the middle. You give the artist what they want," he says. "The covers Hud Mo has picked for his records have never been my favourites, but it doesn't matter—we have to trust him. We aim to make fans of the artist, not simply fans of the label."

Pricing

A final question you might consider is how you're going to price your music. Flannigan reckons this boils down to a simple question: "Is your final price as cheap as possible for the customer while still being profitable for the artist?"

Distribution

Now you've prepared your release, it's time to get it out to listeners. Distribution is how music is delivered to physical shops, online stores and streaming platforms. Your choice of distributor will be partly determined by the formats you have chosen. While it's possible to oversee most facets of distribution yourself, many labels choose to work with professional distribution services that have the resources and contacts to streamline the process.

Some companies specifically handle physical or digital distribution, and others do both. You might consider a soft launch of your label, building up steam on Bandcamp before approaching a distributor and getting more serious.

Digital distribution

Digital distributors, also known as aggregators, get your music onto online stores and streaming platforms. You can do this yourself for some platforms, but the submission process is often laborious and differs from company to company. It's easier to go through an aggregator. Certain aggregators also lobby streaming services to get your music onto curated playlists, a good tool for reaching wider audiences.

Generally, aggregators will either take a flat percentage of your revenue (somewhere between 10 and 25 percent), a set fee per release or an annual fee.

There are different types of aggregators:

• Bulk aggregators serve individual artists and sometimes labels, accepting anyone who agrees to their terms. Some examples are Tunecore, CD Baby, ReverbNation and Songflow.

• Specialist aggregators tend to serve indie labels and select artists, choosing who they work with carefully. Some examples that focus on electronic music are FUGA, Label-Engine and Label-Worx.

If you just want to get something out there quickly, use a bulk aggregator. But if you want to get support for your release, potentially enhancing its reach, and you think a specialist aggregator would take you on, it's worth a try. Note that in order to work with an aggregator who will actively promote your music, you need to offer them an incentive, usually giving away a higher percentage of royalties.

It can be tricky to navigate the world of digital distribution. When picking an aggregator, explore whether they regularly work with electronic music labels, in particular checking whether they place music on Beatport and Juno Download alongside mainstream online stores. Look into how labels you admire deal with distribution.

Here is a blogpost comparing digital distribution services, although it's not specifically focused on electronic music. The Association Of Independent Music in the UK also has a comprehensive guide to the changing landscape of digital distribution.

Physical distribution

If Covid-19 regulations allow shops to open, you can still bring your records in, negotiate a price on the spot and handle physical distribution entirely yourself. But you will also need space to keep your stock as well as time to pack and ship each order and deal with customer queries. It's worth noting that during peak UK lockdown, access to warehouses where bigger labels keep their stock was suspended, so some had a delay in fulfilling their physical orders.

It's more efficient to use physical distribution services. Major institutions in the electronic music world include Rubadub, Clone, Rush Hour and Lobster Distribution. If the distributor finds your music promising, they might offer a P&D (pressing and distribution) deal, where they cover some of the cost of manufacture in exchange for a percentage of record sales.

If physical distribution services don't reply immediately, don't be discouraged: they are often inundated with requests. When Lobster Theremin released their first record, the Palms Trax smash Equation EP, the demo had to be sent to three big distributors before Jimmy Asquith finally got a positive response.

Promotion

So your first release is out in the world. How do you get people to listen to it?

Distributors won't do all of this work for you. The easiest way to reach your target audience is to explore how they discover new music and then work through those channels. It might be through SoundCloud, Spotify or Tik Tok. If it's through local record shops, go and introduce yourself to the people behind the counter. If it's on YouTube, contact the relevant channels to see if you can get featured.

If it's through electronic music websites, contact editors and writers. Asquith notes, however, that "press coverage, by and large, won't sell records. It might raise your profile or get gigs, but it won't usually affect the amount of records you sell. Record buying is a separate economy."

Several label owners mentioned that staff and funding cuts in music publications have made promoting through journalism a more difficult proposition. Where a release once would have got a news piece on Resident Advisor or another site, many publications have pared back coverage. Some are instead putting that money into sponsored posts on social media or reaching fans via Bandcamp mailing lists.

Alongside publications, Asquith suggests targeting tastemakers such as DJs, radio presenters, YouTube channels and other labels that could bring your release to a much wider audience. He gives the example of the new UK garage scene, which has been bubbling up for a couple of years. "If I was going to press a garage record," he says, "I'd go to all these DJs, artists and labels I'm a fan of, go through all the SoundClouds and Instagrams, pull off their emails and put them together in a nice spreadsheet, then I'd fire out some promos or info."

If you're sending out promo emails, remember that people get hundreds of these emails every day. Try to make the email stand out in terms of layout or text, and remember that the subject line is particularly important—it might be all the recipient uses to decide whether or not to open the email. Ensure that you are getting your music to the right people, not just emailing everyone you can think of. That won't make a good first impression.

Stephen Bishop takes care to make his messaging around Opal Tapes meaningful. "We are in peak nonsense, psychobabble blurb times," he says. "If possible, communicate something deeper, be it political, ecological, social or something else."

Consider which platforms to use centrally in your promotion. Social media can be a useful tool, but it's unwise to put all of your efforts into a platform that you ultimately don't control. "Use the internet when a platform is young, and you can get traction," recommends Flannigan. "We're seeing people who were early to adopt Instagram and develop huge followings are winning now. YouTube seems like backing a winner. But put a premium on the things you can really control—make a place where you can speak to audiences directly and guarantee you'll reach them."

If you have the money, you might try employing a PR company that can help get your music to a wide range of press contacts, but be aware that they can't guarantee press coverage, so this may be an unnecessary expense early on.

Finally, be original. LuckyMe attracted attention through its annual tradition of online advent calendars, giving away a free mp3 from each of its artists in the days leading up to Christmas. This continues to be a big draw for the label today: there were over 75,000 song downloads from the 2018 calendar.

Publishing

Each song has two kinds of copyright: one for the songwriter and another for the recording artist. In electronic music, these are often the same person. When a song is played in a club, TV or radio, or reproduced in a physical format, downloaded, streamed or synced to visual media, the songwriter and artist should collect royalties.

The world of publishing is highly technical, so usually, songwriters sell (also called "assigning") or lease (also called "licensing") their copyright to music publishing companies, whose job it is to monetise the rights, collect the relevant income and then pay it on to the songwriter, keeping a cut for themselves.

These companies are known as Collective Management Organisations (CMOs) or Performing Rights Organisations (PROs). Examples include PRS (UK), SOCAN (Canada) and ASCAP (USA).

Note that even though musicians should, in theory, receive money when their music is played in clubs, tracklists are not always submitted to the relevant organisation, and so, while the money might be collected, it often doesn't make it all the way to the relevant rights-holder.

Recording artists, who hold a different copyright to the songwriter, can also lease or sell their rights (known as a "mechanical licence") to record labels, allowing the label to make money from the recording. This is the basic exchange of a record label with an artist. The label then collects income from sales and splits revenue between itself and the artist. It must also pay the artist "mechanical royalties" every time their music is reproduced. Failure to do this could land the label with a large bill from the local Collective Management Organisation and has led to several prominent electronic music labels shutting down.

Here is a thorough introduction to publishing, and a directory of publishers who belong to the Music Publishers Association.

If this feels complicated, Flannigan suggests you focus on the music: "Start from a creative place, and the business stuff looks after itself. You learn by doing if you've got any brains."

Business questions

Do you need to register as a company?

The consensus between label owners is that you don't need to worry about registering as an official company until you're making money or hiring employees. "Don't be on the system until you need to be," Flannigan recalls being advised by his dad. Stay under the radar while you're starting out because "you've just gotta get stuff done."

Even if you're not registered at the start, it's important to keep financial records of your incomings and outgoings so that if you become a bigger operation, you end up paying the correct taxes and conducting your business legally.

When you're ready to become a company, the process differs from country to country. Here is information on setting up a UK business through HMRC, and a guide for the USA.

Do you need to sign contracts with your artists?

The label owners we spoke to were divided on this question. It's undoubtedly important to have a clear agreement of terms with your artists and preferably something signed in writing, but whether you want a legally binding contract depends on your outlook and your relationship with the artist.

Lara Rix-Martin of Objects Limited believes it's best to always have a legal contract, saying, "It makes sure everyone knows where they stand." Meanwhile, Chloe Frieda uses informal "handshake contracts" for Alien Jams, which she finds simpler since they don't involve expensive lawyers.

Touching Bass's Errol decided to ask a lawyer to draw up special agreements that remove the "legalese" so that their artists could clearly understand what they were signing. "Even if you're friends and you trust each other, you should still sign a contract," says Alex Rita. "It makes things easier if there's a disagreement or you can't remember what you said."

How can your label make money outside of music sales?

A good way to increase the visibility of your label and potentially earn some extra money is to organise label events, whether online or, when permitted, in physical venues. These will also help you connect with your local music community.

Once you have built a strong audience, merchandise can add revenue and can be sold through your label's Bandcamp page.

Having your label's music featured on TV, film or video games, known as "sync," can be a significant source of income. However, this is generally a case of you being approached by music supervisors rather than something you can actively encourage—only the big labels have specialised staff chasing sync deals.

Keeping it up

You've got your first release in the bag—well done. But countless labels stall before ever reaching their tenth release. It's a lot of work to keep going. Here are some tips from our experts on how to stay the course.

Look after your relationships with artists

You're nurturing talent. This is an ongoing relationship that should be mutually beneficial. Objects Limited artist Jana Rush stayed in Lara Rix-Martin's house for a week while touring Europe. "I felt like a supportive mum," Rix-Martin recalls. "I say to my artists: 'I've signed you not because of certain tracks, but as someone I want to work with. You're in the family now. I've put my efforts in you being an artist. Whatever way we go, let's go along with it together.'"

Stay on top of admin

Keep a timeline around your releases: when your music will be on sale, when it will be announced, when you will publish videos and so on. This way, you can work backwards to keep track of when you need each phase to be ready.

Keep up with your paperwork and records so you don't get buried under a mountain of admin. "Try to reach out and get help," says Jimmy Asquith. "It's important to have someone who knows what they're doing and can speed things up a bit."

Keep abreast of changes in the industry

The role of record labels will continue to change in the coming years, particularly as artists are increasingly able to sell their own music and deal directly with streaming platforms. Flannigan warns that streaming platforms are trying to cut labels out of the equation. "I think they have a long-term remit to dismantle brand awareness for labels," he says. Electronic labels continue to be important in the scene today, but keep an eye on how the music business evolves around you.

At the same time, Flannigan notes this tumultuous window could open up new possibilities for the scene: "Get started right now. Now is a really useful time to disrupt. Flood the market right now because this new stuff is what will get booked at festivals when they recover. There could be a changing of the guard right now."

Stay fresh and active

Listen to demos and experiment with your sounds and release formats. Be open to new ideas. "Keep it unpredictable," says Frieda. "Don't be complacent and stick with the same thing just because it works." It might not work forever.

Asquith notes that there are more labels than ever today. "If you want to do this, you're going to have to be really active," he says. "Not all the best music rises to the top."

Stay sane

"There's some window where you're the hot thing to talk about," says Flannigan, "and even after that, you need to know you're still good and that it will come around again. You have to have a lot of self-belief to run a record label."

"It's easy to get burnt out because you put so much time and labour into it that can't be seen from the outside," says Frieda. "The main things that allow the label to continue are consistency and passion."

"And don't do what I did and not take a holiday for ten years," adds Asquith, laughing. "There's a fine line for this conversation, though. Just get out there and do it. That's how you'll learn best."

Further reading

• All You Need To Know About The Music Business - Donald S. Passman

• Dissecting The Digital Dollar reports

Correction: A previous version of this article said that Beatport doesn't deal with labels directly when, in fact, it does.