gross sales revenues and the number of products that will be identified with the U.P.C. More than 85% of all retailers use Soundscan, the technology that monitors retail sales, so this bar code is required on the back of a product. If you plan to grow your label into a brand you may also want to consider trademarking your company name (www.uspto.gov). The trademark process can cost from $500 to $5,000. To protect against someone lifting your lyrics without your permission, register your songs with the U.S. Copyright Office (www.copyright.gov). The registration fee is $30 per submission.
Recording fees: This depends on whether you operate from home or rent studio time. Costs also vary according to the types of equipment used and whether outside musicians, producers, and engineers are hired. With an in-home studio, use of the popular software program Pro-Tools (the basic version), a computer with lots of memory, and a keyboard, you can spend less than $15,000 in recording fees. If you plan to rent studio time and bring in known musicians, producers, and engineers, the costs increase. Entry-level studios charge anywhere from $30 to $60 an hour, mid-level studios cost $60 to $125 an hour, and top-of-the-line studios command $250 to $300 an hour up to a few thousand dollars per day. As for top-level musicians and producers, they charge by the song, some making $50,000 for a single track. If the label owner builds a digital recording studio, it can cost upwards of $20,000.
Manufacturing: The cost varies depending on which pressing plant you use, but expect to spend at least $1 per CD. That includes the CD, jewel case, shrink wrapping, and cover insert. Lassiter says make sure the plant can handle the quantities you need and can turn around finished product quickly. Cost to manufacture a CD ranges from $1 to $1.30 per 5,000. Most independent
labels manufacture about 5,000 to 20,000 units for the first round of pressing.
Marketing/promotions: Spreading the word about your label doesn’t come cheap. There are flyers, posters, postcards, press kits, street teams, and other buzz-building materials. “Marketing and promotions should be between 25% and 50% of your budget,” says Steve Lurie, who teaches a course called “Developing a Record Label” at New York University. When Brae signed his first artist, 16-year-old R&B singer Melody, to his label in 1992, he spent nearly $15,000 on radio advertising ($5,000), music video production ($5,500), photographs and postcards ($300), retail advertising ($1,500), and publicist fees ($2,000). It varies greatly, but Lassiter says promotion costs start at $50,000 and go up.
Artist advances: Some label owners provide an advance against royalties in the amount of several thousand dollars. Brae doesn’t offer advances. Instead, he pays for full production without recouping the costs from his artists. These fees can range from $5,000 to $50,000 for new artists. If the independent label has major distribution, the artist advance can be $100,000 to $350,000.
Administration fees: Depending on how you outfit your office, these costs can vary, but set aside a