How does working with a label and the distribution of music work?

Authors: Georg Vlaschits (ÖMR), Franz Hergovich (mica)
 

Perhaps you are currently in the process of recording your first CD, your first tracks, or even an album—or are planning to do so? Congratulations, in times of YouTube, iTunes, and the like, it is essential for artists to be represented on the major platforms with recordings and videos!
 

HOW DOES MY MUSIC REACH THE MARKET?

DIGITAL DISTRIBUTION

To make music available on digital platforms, you can either approach an established label—if they are interested—and entrust them with the distribution of your music, or you can do it directly through a digital distributor (aggregator). It is really simple to make your music available worldwide on the most well-known portals. In fact, you need a label more for the promotion and exploitation of your tracks.
 

PHYSICAL DISTRIBUTION

In addition to selling at your own concerts, it can also be sensible to be available in retail. Depending on the genre of your music, it may be sufficient to supply the few existing specialized retailers on consignment yourself. This market has shrunk considerably in recent years due to digitalization, yet it is still very much present and remains important to have a presence there.
 

THE LABEL

There are two different models for working with a label. Typically, this is done under a so-called band takeover agreement, in which the band covers the production costs while the label takes care of manufacturing, distribution, and promotion. Less frequently, there are artist contracts in which the label also covers the production costs. Such contracts are usually complex and difficult to understand, and the terms can still be negotiated—here it is advisable to take advantage of free legal advice, for example, provided by mica.
 

CD/RECORDING – IS IT WORTH IT?

Primarily, a CD production—whether created for digital or physical distribution—involves several costs such as those for the sound engineer, studio rental, fellow musicians, graphic designers, booklet authors, translators, etc. A CD is primarily to be seen as a marketing tool, especially in the classical field, and secondarily as a means of earning money.
 

CD Labels for the Career Start
 

PRACTICAL KNOWLEDGE: RELEASING MUSIC

For further information on this topic, please consult mica – Music Information Center Austria under Practical Knowledge.

 

Basic Information on Starting a Label

Author: Franziska Strohmayr MA
 

WHY YOUR OWN LABEL?

Advantages:

  • You can decide for yourself what, when, and with whom you want to record.

  • You do not have to relinquish the rights to the recordings and determine for yourself how long something remains on the market and how often you wish to reissue it.

  • You do not have to purchase your own CDs (in collaborations with a label, the contract clarifies how much you pay for the CDs).

  • You can set the sales price yourself.

  • You can decide on the layout and the text in the booklet yourself.

Disadvantages:

  • In the beginning, you have no contacts with radio stations and other media that report on or play the release CD.

  • There are hardly any chances of obtaining a distribution contract.

  • The production costs must be borne by you.

  • The texts for the booklet must be written by you or, at the very least, you must decide who can do it for you.

  • You have to register yourself with an online distributor, commission the pressing plant, and organize the shipping of the finished CDs.
     

STEP-BY-STEP LABEL ESTABLISHMENT

The registration of the new label is carried out via the LSG (Wahrnehmung von Leistungsschutzrechten GmbH).

  • Check in the database whether the desired label name already exists (http://lsg.at/datenbank.html).

  • Fill out the performance contract, master data, and label form for sound carrier manufacturers (http://lsg.at/Wahrnehmungsvertrag_Tontraegerhersteller_Online.pdf).

  • Pay the registration fee of €100 to the LSG and save the proof of transfer.

  • Scan your identity document.

  • Send the documents mentioned in steps 1–4 to the following address:
    LSG Wahrnehmung von Leistungsschutzrechten Ges.m.b.H.
    Producers
    Seilerstätte 18-20/Mezzanin
    A-1010 Vienna
    T: +431 5356035
    M: office@lsg.at

NECESSARY CODES FOR THE RELEASE OF CDs

Entitled Party Number
This number is found on the master data sheet, which you receive from the LSG after registration.

ISRC – Code
The ISRC code consists of several numbers and digits:

  • Country code (2 digits): AT
  • Registrant code, assigned by the LSG (3 digits): e.g. A44
  • Year code (year of production recording) (2 digits): 21
  • Designation code (5 digits): 00212

The designation code: the first three digits represent the number of the released CD in the given year (if it is the first CD of the year, then: 001; if it is the twelfth CD of the year: 012). The last two digits are the sequentially numbered tracks. Each track thus receives its own ISRC code and can be billed separately.

EAN Code
A barcode printed on sales products. EAN codes can be purchased, and they cost between €17 and €26
(https://barcodeoesterreich.at/kaufen)
 

DISTRIBUTION OPTIONS

Digital Distribution
There are online distributors that upload music to all platforms (Spotify, Amazon Music, iTunes, Idagio, etc.) and handle the settlements with them. You pay a one-time fee of approximately €25 and can view on the distributor’s website on which portals your tracks have been streamed and how much you receive for them.

During the upload process, you can specify that you want to exclude certain providers and whether your music may be further used for advertising, etc., or not.

Physical Distribution
Sell your CDs at concerts and via your website. Furthermore, it is possible to set up a business account with social media services such as Facebook and Instagram.

You can ask specialized retailers in your area if they will take your CDs on consignment. For this, you bring a fixed quantity of CDs to the store (with a delivery note that must be acknowledged) and then settle the sold goods every three months.