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.