I have been looking at starting a record label as a side business. But it would be designed mostly to make money from Music Streaming services like Apple Music, Spotify, YouTube and others.
I am thinking of using CD Baby for distribution of the music.
Streaming services are not explicitly open about how much they pay per stream.
I understand that the failure rate is high just like startups and movies.
But I also realised that a hit song can accrue 500 million streams or even 1 Billion streams of its a big hit.
My question is, how much interms of range should one expect to make incase they make such numbers.
Is anyone here making money through streaming music? What's your estimated earning per stream across Spotify, Apple Music, & YouTube?
Also, any other tips of how to run the project or improve odds of success or learning/reading resources would be very much appreciated.
Record labels aren't quite what they used to be now that we have distrokid, tunecore, soundcloud, etc as independent artists can get their music on streaming services themselves. You say you want to be a label, what are you bringing to the table? Do you have any connections in the music industry? These days the only way to make money off a song streaming is if it gets picked up by the big playlists, but guess what? Those are mostly curated by the big labels and you have to have connections to get on them. You can try and get your music on smaller curated lists by blasting out to popular blogs and reading lists as well. Use social media, hope you get lucky on tiktok. Google how to get your music viral as a social media influencer. The real answer here is there is no actual formula but by putting yourself out there on a ton of platforms and hopefully something sticks and it goes viral. At the end of the day is the music has to actually be good (read: something sticky even if its pop drivel) for people to spread it. As a musician and independent producer, this post irks me a little bit as you're basically signaling you want to simply make money from music rather than doing it for the love of the art. If that's not the case I wish you the best.
I have one album of my music on Bandcamp. From that album I've received a total of US$50.
On spotify that represents 15k streams. On apple music, 5k streams (*) These are numbers totally out of reach. But because 7 people liked the album enough, I still made enough for a modest meal out with my wife.
Fuck this streaming shit. So tired of young musicians telling me that streaming is where the audience is. If you really believe that somehow you're going to become a superstar, by all means keep playing that game. But if you want to make money without becoming a superstar, focusing on people who actually pay for music is where it's at.
(*) https://producerhive.com/music-marketing-tips/streaming-roya...
I don't expect huge money from streaming, but I do like people to be able to find my music on their preferred service if they search for it.
> Maison Kitsuné was founded in 2002 as a record label by Gildas Loaëc and Masaya Kuroki in Paris. The founders first met in Loaëc's record shop in Paris where house music lovers, including Kuroki, Daft Punk, and others, frequented. After a trip to Japan for a music video together, they came up with the idea of launching a lifestyle brand not confined to one discipline. The result was Maison Kitsuné, which blends music and fashion as a multi-faceted Paris-meets-Tokyo brand. The pair promoted the brand by performing DJ sets, which was followed by the release of the first t-shirt, shirt, dress, and eventually a full fledged ready-to-wear collection in 2005 that represents 90 percent of its revenue today.
The lesson here is: whatever niche interest or community you are involved in, try to combine it with your record label project. This is more unique and has a better chance of success than just a generic label.
As for new music; I don't see what a "side business" label could offer an artist that they couldn't do themselves with distrokid. Unless you had the capital to develop, build, and market artists I think it would be very difficult to generate a return.
The money she made off music was pitiful though. She didn't just own her own label, she toured and wrote music every weekday. She gave it everything, more than most people have to offer, and in the end she got a salary most people would call "unlivable". The recent recession and COVID situation pushed her into a Starbucks job to pay rent.
So... do what you want. I just want people to know that you could be one of the most talented self-made musicians in the world, and still go destitute despite owning your own label.
He created a record label to make copyright free music for people to stream on places like Twitch.
He distributes his music through Spotify, Apple, etc.
The key thing here is that his music is used on streams, which tend to last many hours. Imagine a bunch of streamers playing his music for hours a day (he created themed playlists/albums). He gets payed by play time.
Last I remember he was making at least 5 figures a month through that: https://www.youtube.com/watch?v=Ek6p_NmYb44
In a way he was at the right place at the right time. He focused on lo-fi music and released that for a very targeted audience.
I think the question is what are you going to offer the artist that they can't do themselves, in order that you can take a cut of their streaming? Marketing? Promotion? Guaranteed playlisting? Do you have connections I don't? Arrange my tour? Etc etc.
If you can't those we're back to a world with artists saying they get paid 'nothing' for streaming when the reality is the label is gobbling up most of it.
"where is the added value" >> For example if you own a recording studio with lots of very high-end equipment, and you ask for bands to sign with your label in exchange for a reduced rate. Or have new technology (for example, I am one of the first studio in the city to have Dolby Atmos). Etc...
"funding model" >> Rather than trying to make money from streaming only, the value of the band is generally in the community it can gather. Community which can be asked for money with Patreon. Or merchandising sold in concerts. Etc...
I'd suggest that startups and movies have a much higher probability of 'success' than minting a hit song that can generate 1 billion streams. While there are a few stories of hit songs that organically break through, the vast majority are promoted _hard_ by the labels using resources (both money and connections) that are hard to amass outside the major labels.
It is an axiom that today, artists make all of their money touring. But even live performance (particularly at the largest venues) is dominated by monopolistic players. Without having a large number of headliner artists, you won't have the negotiating power to get favorable rates, and they'll eat you for breakfast too.
Instead of another label being created, I would love to see a service for bands (similar to a digital or marketing agency) that helps to create activations. Some of the most memorable bands out there have come up with creative ways to sell albums.
Years ago a rap group called the Get Busy Committee bought a bunch of uzi shaped thumb drives for $1 each. They unpacked them, loaded their album onto them, and sold them for like $20 each. They pocketed the profits and walked away with more than what they would have done if they did streaming alone. We need more of this style of engagement.
But I could imagine there is a fairly large number of people who would love to record and press their own album, and one or two of them might actually be able to sell their stuff to strangers.
If I wanted to start a record label, that's probably the value I might be able to bring - vinyl presses, maybe studio recording and self publishing.
A lot of people talk about tiny payments from streaming, comparing it to the "old model" where a CD would be sold for $20/€20/£20. However, the actual economics of those album sales are not as straightforward as they seem. The label would get nowhere near $20 for the sale. In fact, the label often got well under half of the retail price, with significant chunks of the retail price going to the retailer and the wholesaler - with another non-significant cost going on manufacture.
This began to crumble with digital downloads - suddenly people realised that they didn't need to stump up for a whole album's worth of tracks, some of which - to a greater or lesser extent may have been "filler". So where before a label could press albums and be relatively certain on the return, with digital downloads a lot of people started cherry picking the tracks they wanted to buy, rather than buying the whole album, and although manufacture and shipping records around the country was no longer required - saving a bunch of cash - it meant labels took a significant dip.
In a software context, the music business simply moved from up front licensing to a subscription model.
That's definitely had impact on the wider economics of how revenues stack in the recorded music business, but it's not as catastrophic as some people might pictured it from the outside.
If you want to run a label, though, looking at streaming payments means you're going to fail, because this isn't the challenge. And it's also not the whole of the business, there are other revenue streams for labels, like synchronisation, public performance revenues, and physical music products which, although a tiny proportion of music revenues overall, can be a significant revenue stream for strong independent labels with an engaged audience/customer base.
The challenge is signing artists who are going to create recordings that people like - and then finding audiences for that music, engaging them, creating content and campaigns to keep them interested, and building long term revenue streams, and selling them stuff. A&R and marketing are more important today than they have ever been - if you don't have great talent, and you don't know how to market that talent, then it doesn't matter if streaming pays a cent a stream or a dollar a stream - you're not going to have a business model.
(My credentials: one of my businesses advises a large number of independent record labels on copyright, digital revenue streams and strategy)