What a record label actually does
A label invests in recordings and gets them heard. In practice that means some or all of:
- Paying for or organising recording, mixing and mastering
- Owning the masters, or licensing them from the artist
- Releasing the music through a distributor, under the label's name
- Planning release dates, artwork, pitching and promotion
- Collecting the money and paying artists their share, with statements
A distributor is not a label. A distributor delivers releases to stores and collects what they earn; the label decides what to release and how. Many artists start a label simply to put out their own music under a name of their own, and that is a good enough reason.
Set up the business
You can put a label name on a release without forming a company. But once you sign other artists, take in money on their behalf or spend serious money on recordings, a legal entity protects you and keeps the accounts clean.
- Choose a structure. Trading as an individual or forming a limited company are the usual options. Which suits you depends on your country, the money involved and who else is in it with you.
- Open a separate bank account for label income and costs from the first day.
- Keep records of every cost, advance and payout. You need them for artist statements and for tax.
- Register for tax as your country requires, including VAT or sales tax where it applies.
Company law, tax and royalty accounting differ from country to country. Talk to a local accountant or lawyer before you sign artists or hold money for them. This guide gives the general picture, not legal or tax advice.
Choose a name and an identity
- Search the name in the stores, on YouTube and on social platforms before you commit. A name another label already uses causes confusion in metadata and in search.
- Check whether it can be registered as a trademark in the countries that matter to you.
- Secure the matching domain and social handles.
- Design a simple logo that still works small and in one colour.
The label name on a release is shown in the stores, so spell it the same way every time. On TempoDigital the label name is free text on every release, at no extra cost.
Contracts with artists
Put every deal in writing, even with friends. A short, clear agreement prevents most label disputes. It should cover:
| Point | What to agree |
|---|---|
| Split | How income is shared between label and artist, and which costs come off before the split |
| Rights | Whether the label owns the masters or licenses them for a period |
| Term | How long the deal lasts — one release, a number of releases or a number of years — and what happens to the music afterwards |
| Territory | Worldwide, or named countries only |
| Advances and costs | What the label pays up front, and whether it is recouped from the artist's share |
| Accounting | How often statements are sent and paid, and the artist's right to check them |
| Exit | What happens if either side wants out, or the label stops releasing |
There is no standard split. What matters is that both sides understand it and the artist can check the numbers. Producers, featured artists and co-writers need their own agreements too: what they are paid, how they are credited, and whether they share in the master.
Metadata and codes
Stores, collection societies and YouTube Content ID all run on metadata. Set the label up to get it right every time:
- One ISRC per recording, for life. New codes only for new audio — remixes, edits, live versions. What is an ISRC code?
- One UPC per release. What is a UPC code?
- Consistent artist names, with each artist's Spotify and Apple Music profile linked so releases land on the right page.
- Full credits: songwriters, producers and performers with their roles. Apple Music refuses a generic "Performer" credit.
- A catalogue sheet listing every release, its codes, its contributors and its contract.
On TempoDigital, ISRC and UPC codes are free and unlimited, and the release editor checks store requirements before anything is delivered.
Distribution for your label
Your distributor gets your releases into the stores and collects the money. For a label, look at how many artists a plan covers, whether each artist can see their own figures, and whether YouTube Content ID is included.
| Plan | Price | Artists | Your share of store royalties |
|---|---|---|---|
| Label | $149 a year | Up to 10, unlimited releases | 100% |
| Label Partner | No fee, by agreement | Unlimited artists and releases | 85% |
On the Label plan each artist can have their own login and sees their own releases and money, while you see analytics across the whole roster. An artist takes one of the ten places only when they are the main artist on a delivered release; guest and featured appearances are free. Label Partner is a negotiated deal for larger catalogues, with marketing support and a dedicated account manager — talk to us about it. Read more on distribution for labels and pricing.
Publishing: the other half of the money
A label usually deals in recordings. The songs on them earn separately — performance and mechanical royalties for the songwriters, collected by collection societies. Make sure your artists' songs are registered, through their own society membership or a publishing administrator. Some labels run publishing for their writers; others leave it with the artists. Either way, write down who handles it.
See music royalties explained and TempoDigital's publishing administration.
Promotion on a small budget
- Set release dates two to three weeks ahead, so every release can be pitched to Spotify's editors at least seven days before it comes out
- Share one link per release — TempoDigital gives every release a landing page listing every store it is live on, with click tracking
- Release regularly: a steady run of singles keeps a roster visible
- Use YouTube: official audio for every release, and Content ID on every recording the label controls exclusively
- Build a mailing list and press contacts that belong to the label, not to one artist
How the money flows
Stores pay the distributor, the distributor pays the label, and the label pays its artists. Stores report in arrears — most about two months after the month the streams happened — so the first income arrives a few months after the first release.
Send artists clear statements on a fixed schedule: what each release earned, by store and month, the agreed costs, and their share. On TempoDigital, monthly statements close on the 15th of the following month, and if you set royalty splits on a release each collaborator is paid their share directly.
Mistakes new labels make
- Signing artists on a handshake
- Taking every right forever when a licence for a few years would do
- Mixing label money with personal money
- Giving a re-release new ISRCs, which wipes its stream history
- Putting covers, samples or non-exclusive beats into Content ID
- Forgetting publishing entirely