When it comes to the business of making records, bands and musicians — at least the ones who I work with — come in three varieties: those who want a major-label record deal, those who want to release something on an independent label, and those who couldn't care less about either and would rather do it themselves.
All three routes are viable — if not equally attainable — and all have positives and negatives. I'll address them one at a time and try to separate myth from reality.
MAJOR LABELS
The perception
Recording for a major label is the ultimate dream for many musicians. Why shouldn't it be? After all, a major label has seemingly unlimited resources; lots of money for promotion, marketing, and tour support; and the wherewithal to produce slick music videos. A major can take care of an artist's booking, promotion, and marketing; it gets the product in stores and ensures airplay. Nothing says “You've made it” like an album on a major label. Just cut the record and wait for the checks to start rolling in. That's the perception, anyway — the reality can be something else.
The reality
Money? Yes, there is lots of money for promotion, marketing, and whatever else you need. Major labels are huge companies with tons of cash to spend on their product. But they don't just give it away; everything they spend eventually comes out of the artist's pocket. It's not uncommon for bands to sell several hundred thousand or even a million records and still owe their label money.
A major label is much like a bank. It loans the artists money and then helps them invest it. Sometimes the investments pay off; sometimes they don't. Nobody — the artists or the label — knows which act will hit and which will fail. Often major labels send out several releases at once, seeing what takes off in a little way and then throwing money behind it in the hope that it will get bigger. The only thing they know for sure is that just one out of every eight releases on a major is profitable.
Signing with a major label is like playing the lottery. Some people do become famous with a major label, just like some people win millions playing the lottery. Unfortunately, those people are few and far between.
There is no moderation with a major label; it's all or nothing. When major-label acts hit, they hit big. They have to. How else would a record company recoup its losses on the 88 percent of releases that fail?
Recording with a major is undoubtedly the best way to get famous. To become big on a national or worldwide level requires you to be everywhere at once, and only a major label can make that happen. But fame doesn't necessarily equal fortune. The bigger you get, the higher the stakes become. An act accustomed to record-breaking album and concert sales can't afford to slip. For example, those huge arena shows cost an enormous amount of money to produce; the bands cannot afford less than a sellout every single night. If they don't get it, they're in trouble. They end up canceling shows, rerouting tours, and possibly dropping off the map.
INDIE LABELS
The perception
For unsigned musicians who can't get (or don't want) a deal with a major, an independent label might be the ticket. Like the big boys, independent labels can book shows, promote albums, and take care of artists' needs. An indie label can pay for studio time and the other things necessary for creating and selling records. Perhaps most important, independent labels traditionally allow artists greater creative control of not only their music but also their careers.
It would seem that independent labels are an especially good bet for freedom-loving musicians. What is an independent but a major on a smaller scale?
The reality
Independent labels vary greatly. Some have the characteristics of a major label — in-house promotion departments and first-class distribution, for instance. Others are one-person operations financed by trust funds, credit cards, and day jobs. Don't be fooled. We work in a business full of smoke and mirrors. Just because a label seems to be established doesn't mean that it will be a good match for you. On the other hand, just because a label is one person working out of his or her mother's garage doesn't mean it can't help your career.
Regardless of size, reputable independent labels with experience marketing, promoting, and selling recorded music can often be of great help. They know things about the music business that musicians sometimes don't; they've also built important relationships within the industry. A good independent label usually make things happen that a single unaffiliated musician cannot.
Depending on the label you're dealing with, money may or may not be an issue. Many indie labels can't afford to pay much, if anything. Those labels that do put up money will probably act much like major labels in that they'll want their entire investment back before you see a dime of royalties. Spend the money you get like it's your own (because it is). Don't scrimp by cutting corners on creative and production matters but realize that now isn't the time to start living like a rock star with five-star hotels and room service. You're better off spending your money on something that will keep your momentum going and help you sell more records.
DOING IT YOURSELF
The perception
Putting out their own record is the last option for players who can't get a deal with an established label — major or independent. If they put out their own records, they can count on doing everything themselves, which means all the manufacturing, promotion, booking, and marketing responsibilities fall on their shoulders.
Doing it yourself also means no one is there to front you money for your project, so you have to beg or borrow it. Musicians who put out their own records are often stigmatized as losers, putting out product that's not good enough for a “real” label.
The reality
The latter may or may not be true, but it's often beside the point. Many musicians put out their own records by choice, for a number of reasons.
First of all, it gives you complete control of your product. You make all the creative and business decisions. You decide the album's content, packaging, and marketing. You are the sole beneficiary of the album's success. You make all the money from the sales and don't have to share it with anybody. You also take all the risk — the money you spend comes from your pocket.
Total creative control is nice. Remember: first and foremost, labels are in the business of selling records. If a label could turn a profit on a record of belching sounds, it would put it out. (Want proof? Check your local record store.) To a label, your album is just a shrink-wrapped piece of plastic. Obviously, by doing it yourself, you can treat it as something more.
When you put out your own album, you keep all of the money. That is important. Most indie bands sell the bulk of their albums from the bandstand, meaning they don't have to worry about paying distributors or stores. If you sell an album for $10, that's $10 you get to keep. If you were signed to a label, you'd get to keep a lot less.
Do the math. If you can sell 10,000 CDs at $10 a pop, you'll gross $100,000. Replication costs right now are about $1 per disc, including insert printing and packaging. That means you have $90,000 in profit, minus recording, marketing, and design costs and taxes.
If you gig a lot in front of good-size crowds and have four or five band members pushing the album, why wouldn't you be able to sell 10,000 discs in a year? It's not easy, but it can be done. Ten dollars is hardly a major investment. People will be willing to pay if it means taking home the memory of a great show. (So put on a great show!)
You can also sell your music through your Web site or a retail site such as CD Baby or MP3.com. Internet sales, whether you're selling digital downloads or actual CDs, do have associated costs, but you'll still likely keep more of the sale price than you would through a label.
If you're looking to make money and get industry attention right away, doing it yourself is the way to go. Why wait to be discovered? Putting out your own record can generate some cash, and it can show others that you're capable of doing well on a small scale. What's more, it might help convince an established label that yours could very well be that one act in eight that can make it a lot of money.
A LITTLE BIT OF EVERYTHING
Regardless of which route you take, don't expect to support yourself solely on the money you make from recording. Your income won't come from any single thing, but a variety of little things — live appearances, merchandise sales, and film or TV licensing, for example — much like a bunch of little rivers filling a huge lake. Don't neglect any income stream.
It's important to have options. Having a successful and profitable career on your own will give you more options than you ever imagined. Remember: record labels are businesses whose primary concern is the bottom line. What's more, they like to do things on a big level. It is easier for them to take you from 10,000 records sold to 50,000 records sold than to get you from nothing to 10,000.
