Record Labels offer an artist two main areas of service, firstly the money to actually record and make a record; and secondly the distribution channels, marketing budget and contacts to promote the record to the audience. Here we’re dealing mainly with the first half of this relationship, if you haven’t got a label how do you raise the money to make and release an album?

As we’ve already discussed here, being given a huge budget to record a great sounding record is no longer necessary. Digital technology has lowered the budgets required within reach of many independent artists. In fact many independent artists are now getting very creative when it comes to finding funding for recording their albums. The most straightforward method is just to take out a loan from either a bank or relative to fund the recording.  In essence that’s what a record deal used to be anyway, a loan from the label to record a product that the label would then receive all the money from sales until it’s loan had been repaid. There are obvious dangers in this as you are taking all the financial risk as opposed to the label and in the current climate of falling music sales it should not be entered into lightly but in a world where very decent sounding albums can be recorded for a few thousand pounds it’s not complete business madness to consider it if you have an established fanbase to market to.

Other models of funding pioneered by artists who we’ve heard of include schemes like pre-selling albums to fund the release. Artists have asked fans to pay a sum of money usually about twice the usual album price to fund the recording of the record, of which some demos are usually available as part of the marketing. There is a set release date and an assurance of either a product or the money back. Those early ‘investors’ receive a special limited edition copy on release as well as free tickets to a release show or similar. Not only does this make use of your loyal fan base but it can also help hype the final release. However, as we’ve said before, recorded music sales are falling so persuading people to part with cash before a record’s even been recorded can be very hard but the more you can make them feel uniquely involved in the project the more chance they’ll be willing to help with it.

Another scheme we’ve heard of is artists ‘micro financing’ projects by selling small amounts of shares in future album to fans and investors. They offer people a split of the profits from a release in return for an investment of a couple of hundred pounds or so. Not only does this make fans feel a part of your music and your creative work but it also offers them the prospect of getting their money back with the possibility of a return on the investment. Again paperwork always needs to be prepared stating the exact terms of the deal so that everybody is in no doubt what to expect from the other parties.

There are even dedicated websites that allow you to buy and sell shares in bands, sites like sellaband and slicethepie boast several artists who have gone on to record albums with the funds the websites have provided. Exposure on these sorts of sites can be very helpful in introducing your work to a larger audience and as part of a release marketing campaign. However a quick warning – always read the terms of signing up to these sites very carefully and find out what the implications are for ownership of the final recording if it gets made as some artists we know have found those terms unfavourable.

One of the biggest benefits of paying for the recording yourself is that you then legally you own it. This used to be one of the biggest complaints of the old record label model of doing things. An artist could spend a year of their lives making what they thought was the perfect record but once they’d finished – they didn’t own it! The label owned the copyright to the ‘sound recording’ because they paid for it and therefore had the sole right to exploit it for the duration of the copyright. In a worst-case scenario a label could then either stall releasing a record or even cancel it altogether if they didn’t feel it would recoup their investment or it didn’t fit in with their current vision for the company. They did of course stand to lose all the investment they put into making it but their logic was if they didn’t stand a chance of recouping then why spend the extra money on duplication, distribution and marketing? Owning the copyright to your own recordings is very valuable, it gives you complete control over how they are used and so should not be signed away lightly.

Music distribution –>