Everything You Ever Wanted to Know About Starting a Record Label, With Nick Sadler

We speak to industry veteran Nick Sadler about his new book, The Label Machine, out now on Velocity Press.

14 min
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Nov 19, 2021
Chandler Shortlidge

Have you ever thought about starting a record label, but didn’t know where to begin? Starting a record label is a daunting task — there’s a ton of competition, a lot of groundwork involved, and many logistical hoops to jump through before your first track ever hits the digital shelves. Many record labels fail to make a splash, and some never even sell more than a few tracks, but that doesn’t mean you should give up on your dreams of starting your own record label.

That’s because electronic music industry veteran Nick Sadler is here to help. With decades of experience working with major artists and labels, he’s learned just about everything there is to know about not only starting a record label, but making it a success.

Now, he’s sharing his decades of wisdom with his recent book, The Label Machine, out now on Velocity Press. It’s one of the most comprehensive guides to starting a record label we’ve ever come across — packed with information on picking a name, designing a logo, and so much more.

To get a sneak peek at what’s inside, we spoke to Nick about a few key lessons in his book. Read on, and make your label dreams a reality.

Hi Nick! Thanks for taking the time to talk to us today. First, can you tell us a little bit about your background, and why you decided to write The Label Machine?

An absolute pleasure to be catching up with the Beatportal team! I’ve been working as a label and artist manager for many years, mainly in the electronic music scene. I co-founded some of the biggest electronic bass labels, such as Never Say Die Records and Disciple Recordings, and worked with artists such as Skrillex, The Prototypes, Zomboy, Eptic, and The Freestylers. I was helping a lot of artists set up their own record labels, and Ned from Torre XVI Records said, ‘You should write a book on this, so you don’t have to keep repeating yourself!’ I was in between projects, and after discovering there wasn’t a modern super-practical guide to starting a record label, I began chipping away at it by writing 500 words a day. 18 months later, I had a book!

What’s the first step you should take once you decide to start a record label?

Write a business plan for your label. It doesn’t have to be super complicated, but it’s an important stage as it forces you to decide the creative aspects of the label, things like which artists and what music you will release, how often you’ll be putting music out, and your branding styles. A plan will include the business elements of your label, such as how much money you will need, who will be doing distribution, how you market and sell the music, and who is on the team.

Another super important reason for a business plan is that if you want to distribute electronic music through one of the more established distributors out there, you need to have a business plan when you apply. They need to see you are serious and not a flash in the pan.

You write that music copyright is “probably the most boring, complicated, and difficult thing to understand” in the music business. But how important is it for artists to learn more about copyright, even if they aren’t interested in starting a label (yet)?

Oh yeah, copyright! I spent so much time on this section, as I feel it’s the one part of the industry that is so misunderstood. The first reason you need to understand copyright is that it will allow you to understand how to claim all the music royalties owed to you worldwide as an artist. I’ve explained it from the UK and US point of view, as so many artists these days are releasing music on the international stage, so you need to know how it works on both sides of the Atlantic.

Secondly, as an artist, if you get signed to a label or publisher, you need to understand the different types of copyright to know what rights you are negotiating when looking at a recording or publishing contract. As the saying goes ‘knowledge is power!’

Top tip — publishing copyright laws are based on the country in which the songwriter pays taxes, and recording master copyright laws are based on the country where the masters were recorded. If that doesn’t make sense, you definitely need to read my book!

Your book is very extensive, covering logos and branding, choosing a name, budgeting, promotion, and much more. However, is there one thing that tends to sink most new labels more than anything else?

That’s a great question, and as a record label is essentially a business at its heart, my answer really covers the question, what sinks any new business more than anything else? And that is not having customers, or in the case of a record label, not having any fans. Not having a system set up to find new listeners, turn them into fans, and then ultimately into fans that give you money will sink a label. You need fans to add your music to their favourite playlists to build up streaming revenue, buy vinyl, t-shirts and other merchandise, and buy tickets to label shows.

The reason why many record labels started by established artists tend to do OK, even if they are disorganised, is because the label comes with an inbuilt fan base off the back of the artist.

My top tip for electronic labels starting out that need to build up a solid fan base is to tap into other artists’ fans in your scene’s genre by investing in getting remixes done for your first 10 releases. This also builds up your extended family of artists associated with the label, further establishing you in your scene.

How important is label art or catchy logo design in the digital age?

Branding is everything. Your brand is represented by your label’s artwork and logos; it’s probably the second most important aspect a label needs to get right after the music. If you have well-designed artwork, your website looks dope, your social media posts look slick, and ultimately you become more appealing to artists you want to sign. Your branding also allows your future fans to identify with you and recognise your label.

If you can afford it, I can’t stress enough how important it is to get a great designer on board early to help with this. It makes all the difference to the final product, and when you have sick artwork, it makes it so much easier for you and others to share your label’s music with the world.

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Most of our fans want to know how to get their music on Beatport, which is where a distributor comes in. Can you explain a little more about the importance of distribution, and when in the process of setting up your label you need to start looking for one?

I’m going to be completely transparent on how this works and the steps you need to take. Because Beatport is an online store platform, you need to go through a music distributor to have your music on there. There are a couple of different types of distributors out there. There are no-frills distributors, such as Tunecore and CDBaby, where anyone can upload music and pay a fee to their music on Spotify, Apple Music, and Amazon. However, because there is no filter to what people can upload through these distributors, and Beatport works with bonafide record labels, in most cases, you need to go through a specialist distributor such as Labelworx, Label Engine, Symphonic, Fuga, Horus Music or AWAL. And the catch is, they have an application process to distribute with them. Hence why if you are releasing electronic music, you need a solid business plan. Or have an established artist with a proven track record of selling music at the head of the label.

So what happens if you apply to one of these distributors and don’t get accepted?

Not all is lost! The distributor, Distrokid, can distribute your music to Beatport; however, your music label will be listed as Distrokid, not your own label, which is not ideal. My advice is to release three singles via Distrokid, and then once you can show you are regularly releasing music professionally and not a one-trick pony, apply to one of the distributors that can get you a label account with Beatport. I’ve used this tactic to help loads of new labels get specialist distribution this way.

What do you think the biggest misconception is about running your own label?

Not understanding how much time goes into making a label run professionally, let alone successfully. It’s one of the reasons I started thelabelmachine.com, which is the online accompaniment to the book. I’ve taken all the practical steps and put them online with cheat-sheets, release roadmaps, recording contract templates, and built a community of label managers and artists that can be tapped into and provide feedback on running your label. This allows people to save a ton of time when running a label.

Top tip ±— start a label with a mate, as sharing the load will make all the difference. If you are starting out solo, think about who you can get on your team, even if you have to pay them part-time, and think about joining The Label Machine community too.

If there’s one lesson you’d like readers to take from your book, what would it be?

That the success of your label comes down to your determination and ability to take action. The book gives you a proven detailed roadmap on how to start, run and grow your own music label. If you can simply take action and follow the steps in the book, it won’t be a matter of whether your label will be a success or not, but how much of a success it will be.

Finally, what’s the best part about running a successful record label?

When you get a label that is humming, there are so many awesome things to be grateful for. Seeing one of your artists get a Beatport number one is a great feeling. Being able to generate enough revenue that your artists can live off music royalties is up there too. Hearing your music being played to thousands of fans at a label night is pretty special and makes all the effort worth it at the end of the day.

Grab a copy of Nick Sadler’s book ‘The Label Machine’ on Velocity Press.