How to Start a Record Label
A record label is not just for signing other artists. It is a business entity: a way to collect every royalty you are owed, separate your music income from your personal finances, and release music under a name that is not tied to a single artist project.
Most independent artists who start one do it for themselves first. The infrastructure to sign other artists comes with it, but that does not have to be the reason.
You do not need a roster, office space, or staff. You need a registered business name, a distribution setup, and accounts with the right organisations. The whole thing can cost less than $500.
Why Start a Record Label?
Collect mechanical royalties properly. Streaming generates two types of royalties: performance royalties (collected by your PRO) and mechanical royalties (paid for the reproduction of your composition). Most PROs pay both writer and publisher shares directly to unaffiliated songwriters, so performance royalties are rarely lost. Mechanical royalties are different: in the US, the MLC collects these and you need to be registered to claim them. Services like Songtrust handle this for a 15% cut. Registering your label as a publisher and doing it yourself means keeping that 15%.
Separate your music income from your personal finances. A business entity means a dedicated bank account, cleaner tax reporting, and the ability to claim label expenses (mastering, marketing, equipment) against your music income. This matters more the more you release.
Sign and release other artists. A label gives you the legal and business structure to sign artists, issue contracts, manage royalty splits, and build a catalogue beyond your own releases. Without a registered entity, those arrangements have no formal foundation.
Credibility with sync supervisors, playlist curators, and press. A named label on a release signals intent and structure. It is a small signal that adds up when pitching to music supervisors for TV and film placements, or to editorial curators who receive hundreds of pitches from solo artist accounts.
How to Start a Record Label: 5 Steps
Step 1: Choose a Name
Your label name should be short, searchable, and not already in use. Check:
- Trademark databases (USPTO in the US, IPO in the UK)
- Companies House or your state's business registry
- Whether the domain is available
- Whether the name returns clean results on Spotify and Apple Music
Avoid names that closely echo existing labels. A conflict is expensive to resolve.
Step 2: Register the Business
The simplest structure for a small label is a sole trader or single-member LLC (US) / limited company (UK). An LLC separates your personal assets from the label's liabilities, which matters when you sign contracts or distribution deals.
In the US, LLC registration runs $50-$500 depending on the state. In the UK, registering a limited company through Companies House costs £50. Neither requires a solicitor.
Open a dedicated business bank account once registered. Keep label income and expenses separate from day one.
Step 3: Register with a PRO as a Publisher
This is the step most independent artists skip and the one that costs them the most money over time.
When you release music, your PRO splits performance royalties between the songwriter account and the publisher account. If no publisher account is registered, that half of the royalty goes uncollected. Registering your label as a publisher with ASCAP or BMI takes one additional account alongside your existing songwriter registration.
ASCAP charges a combined $50 one-time fee for both songwriter and publisher accounts. BMI is free for songwriters but charges $150 for a publisher account. If you have not yet chosen a PRO, the ASCAP vs BMI comparison covers cost, payout speed, and contract terms in detail.
Step 4: Set Up Distribution
Distribution gets your releases onto Spotify, Apple Music, and every other streaming platform under your label name.
Aggregators with label accounts: DistroKid, TuneCore, and CD Baby all offer label plans that let you distribute multiple artists under one account with automatic royalty splits. If you are choosing between the two most common paid options, the DistroKid vs TuneCore breakdown covers pricing, royalty rates, and what happens when you stop paying.
Free aggregators: RouteNote, ONErpm, and UnitedMasters support label releases on their free tiers, taking a percentage of royalties in place of a flat fee. The free music distribution guide covers each platform in detail.
Step 5: Plan Your Physical Releases
Physical releases generate revenue that streaming rarely matches at the unit level. A vinyl record at £25 returns more from a single sale than thousands of streams.
Traditional pressing requires 100+ copies minimum, £1,000+ upfront, and a three to six month wait. On-demand pressing removes all of that: single copies, no upfront cost, delivery within weeks. The full breakdown of how both methods work is in Sell Vinyl and CDs to Your Fans.
What Does It Cost to Start a Record Label?
| Item |
Approximate Cost |
| Business registration (LLC or Ltd) |
$50-$500 |
| Business bank account |
Free to £50/year |
| Domain and basic website |
$30-$100/year |
| PRO registration (songwriter + publisher) |
Free to $150 |
| Distributor (first year) |
$0-$50 |
| Logo and branding |
$0-$300 |
| Total |
$80-$1,100 |
Physical releases scale with demand rather than requiring upfront commitment, so they do not need to factor into your launch budget.
What a Record Label Does Not Require
You do not need: a physical office, staff, a lawyer before you have any contracts to sign, an advance to offer artists, or a large catalogue on day one. The administrative overhead of a small indie label is low.
Start with your own releases and the infrastructure to release others if you choose. The label grows with the catalogue.
How to Start a Record Label: FAQ
Do I need a record label to release music?
No. Aggregators let anyone release music directly to streaming platforms. Starting a label makes sense when you want to collect publisher royalties, sign other artists, or have a formal business entity for sync licensing and tax purposes.
How much does it cost to start a record label?
A digital-first label can launch for under $500. The main costs are business registration ($50-$500 depending on territory) and a distributor plan ($0-$50/year).
Can I start a record label just for my own music?
Yes. Many independent artists do exactly this, primarily to collect the publisher's share of performance royalties alongside their songwriter royalties, and to have a named business entity for sync and licensing.
Do I need a lawyer to start a record label?
Not to get started. Business registration can be completed online without legal help. Contracts with other artists are where legal advice becomes important. Start with your own releases and bring in legal support when you have artist agreements to draw up.
How do I distribute music from my own label?
Sign up with an aggregator, upload your release, and set your label name to appear on streaming platforms. DistroKid, RouteNote, ONErpm, and CD Baby all support label accounts.
Can I release other artists' music on my label?
Yes, and this is one of the main reasons to set up a formal label rather than simply releasing as an independent artist. You will need a written agreement with each artist covering royalty splits, ownership, and release terms. Consult a music lawyer before signing other artists.
Running a label is mostly a series of registrations and accounts. The music is the hard part. The business structure is paperwork.