There seem to be three main approaches that independent artists take to the idea of record labels these days.
The first is that record labels are the best way to get your music out to the public. The internet is all well and good, and we are in favour of it, but people in record labels know what they are doing, they understand marketing, they have things like connections, promotion strategies, radio pluggers, PR, graphic design, branding, distribution, chart registration, barcodes, licensing, finance, and deals on pressing all sorted out. We’re going with them. 20% of something is better than 100% of nothing.
The second is that we live in a post-label world. We are all about DIY. There may be artists signed to record labels and that’s fine for them, I suppose… but this is a brave new era and we’re going to self-release. We’re not unsigned – we’re independent. We have all of the tools at our disposal to record, release, distribute, promote and make money from our music on our own terms, beholden to nobody, keeping all of the intellectual property and making all of the profits ourselves. We’ll do it on a tight budget, but we’ll do it because we are empowered to do so.
The third can be broadly categorised thus: We’re going to release through a Netlabel. As soon as we can figure out what a Netlabel is, that’s what we’re going to do.
There’s no such thing as a Netlabel
While there are quite a few organisations that call themselves Netlabels, by and large there is very little consistency between them in terms of what roles, functions and tasks they fulfill. Nor is there much in the way of consistency in terms of the terms and contracts.
There are some organisations calling themselves netlabels that simply act as middlemen between you and a digital aggregator like The Orchard or IODA. Some of them add little more than an unnecessary fee, and an unfair percentage cut for doing something your drummer could have done in half an hour and a link to TuneCore.
There are other netlabels with a significant roster of other artists that bear a strong connection to your music, and with whom it would make sense to be grouped. These labels are frequently run by people who are very good at marketing, know all the ins and outs of online publicity and PR, and can work out a deal that gets your music to the right people, without taking you to the cleaners in the process.
But in effect, what most netlabels will offer you is an alternative – frequently a more accessible one – to having somebody do most of unpleasant, difficult or baffling administrative aspects of releasing a recording – and they will tend in most instances to only release digitally (though, of course, some netlabels do actually release CD and vinyl – go figure).
Netlabels and copyright
Some netlabels are what you might call ‘progressive’ in terms of their approach to copyright. Some embrace Creative Commons licences. Others will encourage you to make your music available for free under certain conditions. Still more will take a much more traditional stance on copyright, but may divide royalties up in a much different way to that which you might expect from traditional labels.
Some netlabels even refuse outright to take any ownership in the master recordings, whether or not they fund the making of the tracks. Often, these labels will simply recoup their costs first, split the remaining proceeds 50/50 and let you keep the masters.
By and large, that’s a pretty good deal. Keeping ownership of the recording means you’ll have an asset at the end of all this.
Netlabels are streamlined businesses
Personally, I’ve never actually understood how record labels have been allowed to own the masters. It’s a bit like going to a bank to borrow money to buy a car, paying back the loan, and then the bank owns the car. As far as I can tell, there is no other industry that works this way.
I know why record labels do that – I just don’t really know how this has become an accepted reality.
However, it’s fair to say that traditional (that is, physical) record releases require high fixed costs at the outset, followed by comparatively small marginal and ongoing costs. Digital-only releases, by contrast, require much lower initial fixed costs (especially if you’re bringing them a finished product), and near-zero marginal costs.
The only real costs of putting out a record via a netlabel is the cost of actually doing business. Hosting, electricity, wages (if such things are paid), marketing costs, administrative costs, and so on. It’s not free by any stretch – but nor are you manufacturing, pressing, printing, assembling, storing, shipping, or dealing with returns and over-runs.
So – all going well, what you’re getting from a netlabel is brand association and expertise. If the brand is known to be strong in a particular area (and it’s one that suits you) and if they have expertise that will help you use your recordings to make money (which may or may not be the same thing as selling recordings), then a netlabel may well be good option.
It is, of course, important to understand what you’re agreeing to before you sign anything. If you don’t get proper, qualified legal advice before signing a record deal – even with a netlabel, even (perhaps especially) if it’s just a matter of ticking a box on an online form… then you’re a bloody idiot.
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[...] conversation about netlabels down in the comments on this blog entry by Andrew Dubber. This entry was written by Lucas Gonze, posted on November 29, 2008 at 6:34 pm, filed under [...]
[...] came across an interesting article on New Music Strategies entitled What Is A Netlabel”. Wikipedia describes a netlabel as “a record label that distributes its music primarily [...]
[...] What’s a Netlabel? by Andrew Dubber at New Music Strategies discusses the grey area between being signed to a record label and being a completely DIY, independent musician. There are a number of emerging business models that can help you release and market your album digitally. If you’re looking for somebody to help you the business end of releasing an album in exchange for a portion of the profits, a netlabel business model may be right for you. [...]
24 Comments
This.
Andrew, can you give examples of the netlabels you’re thinking of here? The leading netlabels are more like zines or blogs than distributors in my experience, or at least that’s how I’d categorize dominant players like Thinner, 8BitPeoples, and Monotonik.
The last line is worth the whole price of admission. It’s all too easy to sign up for an online service and forget that you are actually signing a contract.
The landscape has changed but the business hasn’t.
The term “netlabel” may be a culprit here. The “netlabel” as I would use the term refers to the broad array of Creative Commons/Free Art License/GNU entities based on genre-related non-commercial distribution of artists for free download.
A number of businesses use internet distribution of product as their vehicle, and thus may be termed “netlabels”, but this more generic meaning is a use of the term on the wane.
Here I think you’re talking about “for-profit” businesses that market over the internet, whereas those in the netlabel community do not use the term in the way you’re using it. The net effect is that a broad brush is applied in a context which can be more fraught with ambiguity in terms of the post’s narrative than the ambiguity in the actual situation at CC/GNU/Free Art netlabels.
All that said, if you’re saying that anyone who seeks to use an internet label or distributor to market work should be aware of the legalities involved, then I think you’re point is well taken.
Hey Andrew, great post!
I just have one issue with the bit on why record labels hold onto the copyright…
I may be completely wrong, but if they didn’t hold onto the copyright for the sound recording, couldn’t the artist just take off with the masters and sell albums/singles/whatever independently or through another company as soon as the label foots the bill to make and market the record? That could possibly leave the label with huge sunk costs – money, time, blood, sweat and tears.
I’m not sure if maybe there could be an exclusivity clause in the contract to prevent that from happening. I’m not completely savvy on how copyright works in some situations.
Anyway, it was just a thought. Thanks for the posts…and thanks in advance for any follow up responses…
Being head of a netlabel (Webbed Hand), I feel I should clear up some ambiguity about this term.
It seems that what is being referred to as a “netlabel” in this essay ought more properly to be called an “online commercial music label” or some equivalent.
If you Google the word “netlabel” you’ll see that 99% of the results point to labels that do not sell music, but give it all away for free.
Since the time when internet bandwidth became broad enough to handle music file downloading, the term “netlabel” has been primarily used to refer to small operations that bring together music, usually of no commercial potential, for sharing freely as mp3s/oggs/flacs.
Netlabels are labors of love rather than enterprise. Some netlabels take donations for upkeep and site expenses, but ask nothing for the music.
None of the netlabel I know of require contracts or take any kind of ownership of the material. The work is Creative Commons-licensed, and no royalties are involved. Promotion and “marketing” are done through web forums and blogs dealing with the genre of the particular release, and are just as much a responsibility of the artist as the label.
Artist can release their own work online these days (many do), but some choose to submit to netlabels because netlabels are a kind of filter. They are taste-makers, and develop in time a loyal fan culture. The top release on my label has been download more than 35,000 times which, given the type of recordings, is remarkable. Were it sold as CDs, it would have probably taken several years to move 350 units, if that. That’s the advantage of what we do.
The netlabel scene, on the whole, is proud of its function as not-for-profit means of disseminating obscure and experimental music. Some artists who have gotten their start have moved on to selling their work, but when they do so, they don’t look for “netlabels” to sell their work on.
If an artist needs to talk to a lawyer before hooking up with a netlabel, they should probably also have a talk with their shrink. The operations which properly “own” the epithet Netlabel (see the Wikipedia entry) don’t have or need legal teams (although I do know of a netlabel run by a music-loving lawyer — it also eschews contracts and royalties).
@John C Yep – this is exactly what contracts are for. They formalise agreements. If the band contracts NOT to run off with the masters, then that shouldn’t be too much of a problem.
@ CP McDill – Thanks for the explanation from a netlabel’s perspective. I have to say that when I think of netlabels, the one that springs to mind most often is Magnatune. From what you say, it seems that the term has evolved and been more fully adopted by a particular subset of what I understand as netlabels, which suggests that the netlabels that are what you call ‘online commercial music labels’ have begun to drop the term to describe what they do.
You’re right to point out that a majority of those in what you call the netlabel scene (which is largely what the relatively brief Wikipedia entry seems to refer to) a) give music away for free and b) do not take ownership of the material. I would offer that it’s not always the case – and the artists I know who have regretted signing (yes, contracts) with so-called Netlabels, assuming that netlabels are by definition artist-friendly would have done well to check the terms properly.
The reason I wrote this particular post is that this is a question that comes up from time to time when I do seminars, often from musicians who have been approached by so-called ‘netlabels’ who do not operate as you describe.
If you don’t have a contract, you don’t need a lawyer (though I would still advise to be very clear about what is being agreed to by whom). My last point is that WHENEVER there is a contract, you should absolutely get legal advice – even if the people offering it are calling themselves a netlabel.
I’ll certainly be checking out some of the music on Webbed Hand Records – thanks for the input and the clarification.
have any of you heard about youlicense.com?
it seems like a better version of andrew’s “magnatune”
got more of a web 2.0 feel to it…
My “Magnatune” (in inverted commas). Wow. I feel old.
I’d say you’re absolutely right with all the above points mentioned. Now, this is theory and in practice, at least in France, I haven’t seen many netlabels that are not “agreggators for online sales” or “DIY to the extreme” labels, to the point where it’s useless to sign any kind of deal with them.
Well, I’m looking for this kind of structure, as I really believe it’s not possible to DIAY (do it all yourself)
Hi Andrew,
could tell me what do you really think about TuneCore? Does its service really help or is it something that ‘my drummer can do it in half hour’?
Your opinion will be very valuable.
Thanks.
I like TuneCore. It’s really helpful – and yes, your drummer could do it in half an hour, probably. But it’s not “The Answer”.
TuneCore puts your music in some major online retail outlets. Some other distributors can get your music into more places. TuneCore is dead cheap and easy to use. Like I say – I like it.
But getting your music onto iTunes is not the same as selling your music. Nor is it the same as promoting your music.
“If you Google the word “netlabel” you’ll see that 99% of the results point to labels that do not sell music, but give it all away for free.”
I did just that yesterday after reading this article and found a ton of resources that I posted on last night… and already I’m seeing increased traffic to my site because of it.
But, I’ve also learned that not all netlabels give their music away for free some do sell it… and not all net labels focus strictly on internet releases… there are those that are pressing up cds and vinyl as well…
I guess what I’m doing with my Universal Indie label falls in line with the “netlabel” thinking and I didn’t even know it.
“have any of you heard about youlicense.com?
it seems like a better version of andrew’s “magnatune”
got more of a web 2.0 feel to it…”
Never heard of it… but checking it out now…
thanks for the resource…
@CP McDill,
Love the way you described things on your “about us” page. I might have to plagiarize you a little.. lol…
@Dubber,
I think “netlabel” was the wrong term for this article.. but yes.. I’ve seen more than a few of these digital labels that want you to sign a contract and offer to get you on itunes, Amazon, etc and I always thought “Why the hell would anyone sign with you instead of going to Tunecore, IODA, or the Orchard directly?”
I get quite a few request from artists that are looking to sign to me (maybe it’s the whole “Universal” thing.. lol) and I tell them straight up that I’m not doing anything that they can’t do themselves… though i’m pretty good at internet marketing and that I’m a graphic designer. Instead, I offer to partner with them to help get their music out (if it’s along the same lines as what’s being offered by my label). The Scholarly Pursuits release on my label is such a partnership.
CP McDill has definitely got the right angle on this. I think it’s important to differentiate between netlabels in the sense of “Webbed Hand” (i.e. releasing free, creative commons licensed music on a not-for-profit basis) and the often more dubious trend of “online music labels” who often provide very little in return for straitjacking artists rights to their own music.
As Andrew rightly suggests there is little point in this day and age in “paying to release” – i.e. a netlabel that imposes contractual and/or financial restrictions on it’s artists really needs to have something worthwhile to offer (i.e. a proven promotional arm and/or a “brand presence”) in order to provide a service that the artist couldn’t achieve themselves directly.
I ran a small independent label called Valentine in Manchester, England for 5 years between 2001-2006. http://www.valentinerecords.co.uk
We enjoyed a reasonable level of cottage success (limited edition singles that sold enough to recoup the outlay, a number of successfuly live events, decent reviews, a couple of compilations).
However, we ultimately came to the conclusion that we were getting more enjoyment/reward out of projects like our free download series than the conventional CD/vinyl releases.
Hence we started a new community/virtual label http://www.rebelliousjukebox.org
I think this is another possible future for the “netlabel” concept – it’s still in it’s early stages, but we’re running it on more of a blog/web 2.0/community basis than a lot of labels: We still take great pride in the selection, production and presentation/design as we did with the old Valentine imprint….however
1) We can put out music far more quickly and easily. Valentine were often forced to turn down interesting artists as we knew that the promotional push required for niche acts would mean us running at a substantial loss.
2) Even if we sold out of a 1000 run 7″ or CD EP we “just about” broke even. There’s obviously not profit margin for running Rebellious Jukebox – but other than the webhosting and our personal time commitment the costs are non existent.
In short, we still get to do the fun/important bit (at least for us) – i.e. seeking out new and interesting music and presenting it as part of a virtual/physical community.
Regards
David
Netlabels really aren’t labels … they are more akin to old line record distributors… whether major label distribution arms or indie distributors. Their primary function is to get product into the digital market place. They make money by aggregating product from a large number of artists and facilitating the sale of a few copies of each for which they retain a commission for each sale. Occasionally they get lucky with big seller but rarely are they instrumental in generating the interest in an artist that results in a demand for the artist’s product.
Netdistributors (to replace the misnomer Netlabels) don’t take any risks. They don’t fund advances, recording costs, coaching, wardrobe, equipment, rehearsals, unprofitable initial tours, living expenses, etc.. They don’t get you on Letterman, they don’t pay for placing your product in prime locations at the online stores – or in what’s left of record stores – they don’t get you on meaningfully radio outlets, they don’t do anything to spread your image and music across non digital media.
All of that, and the extraordinary amount of money and experience needed to pull it off, rests solely with whomever owns or controls the master recordings – whether it be a record label or a DYIer.
Netdistributors do provide a service and some do it rather well; but, like all things digital, once the basic routine is established it’s a rather simple process to duplicate for each new client.
Some Netdistributors offer ‘add on’ marketing and other services. Be sure you understand what you are getting into before accepting their offers. Find out what other services offer. Find out how the pros would undertake the functions offered in the supplemental packages.
If you do cover recordings find out how your Netdistributor deals with the licensing of the outside songs you record or a global basis … If they say that’s up to you…. you’ve got a major problem.
Netdistribution is the most basic of services you will need in your attempt to reach the public. Is it worth the up to 50% some charge? Probably not. If, on the other hand, the service is free … what’s the catch?
I am a member of the Artist Recording Collective – a group of independent jazz artists that group together for promotion and support – it is “not a label” but we are together to create a brand and support each other in getting the message out.
PLease cehck it out here
http://www.ArtistsRecordingCollective.info
and tell me what you think.
as a magnatune “recording artist”, friend of Buckman and guy that runs an open music community (ccMixter.org) let me say:
User generated content is a Good Thing. Corporate crappy content (even if it’s masquerading as a ‘Web 2.0′ online thingy) is a Bad Thing.
BUT….
I think (perhaps) the type of curating that John at Magnatune has been doing is totally underrated nowadays. I think (perhaps) the huge, more-artist-the-better mega warehouse approach of silo sites like tunecore and cd-baby and even Jamendo are nearly impossible to navigate and aren’t necessarily good simply because they exist.
I think we’re still missing the artistic level curating that a mature economic environment for open music requires. I think (perhaps) it’s a necessary thing if ‘magnatune’ (or god forbid ‘ccmixter’) becomes a brand for ‘good music’
Does Magnatune deserve 50%? That’s a good and fair question. Don’t know.
@victor,
How does Magnatune do it differently so that it’s easier to find artists? I’ve visited their site befoe as well and I wasn’t really sure where to begin.
Then answer is somewhat complicated – if you’re looking for underground hip-hop you’ll be looking a long time.
Magnatune is moving away from a per-copy sales model, in the last few months it has embraced the fact that people are more interested in all the music they can get, not buying albums.
John’s given several public talks recently where he mentions that, in his view, “browsing” for music has been replaced by access to large streams.
One way to ‘find’ the music you like is find a trusted source, someone to curate/filter out the junk. Once you find that person you just hit ‘play’ or ‘stream’ and enjoy.
I hadn’t thought much about Netlabels but this certainly gives me some perspective. The truth is, even in a DIY age most artists still need a lot of help in promoting, marketing and distributing. Few people do it alone.
Hi Andrew. I liked this brief overview. I thought for a while that my own onine store was becoming a ‘net label’ whatever that meant. But I have decided to avoid this description for a number of reasons including the ambiguity around the name.
Another point, requiring legal advice is very costly and if it is mandatory can mean the loss of a lot of good music getting out there becuause of this barrier for some artists. Contracts that are written simply and with non-exclusive agreements towards sales and promotion along with the artist retaining their own copyright with minimum committments may be a shock to some but I feel is a better approach to doing business on the Internet.