5 Ways to Make Your Indie Label More Profitable
Running an indie label may be a labor of love, but it doesn't have to break the bank.
June 29 2020
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Running an indie label is often a labor of love. Equipped with a deep passion for music label owners are making way for the most eclectic, diverse and creative artists out there. But no passion project should be a reason to break the bank. You may not have the big budgets and resources of a major label, but with modern digital tools you have the means to turn your indie label profitable.

With over 20 years of experience in the music business, Juka Hynynen, a label owner and the CEO and Founder of Family in Music, shares his tips on running a profitable label.

 


 

one Choose the Right Digital Distribution

When it comes to digital distribution, there are a lot of options in the markets from DIY platforms to professional services. At a core level, all these companies offer the same service - getting your music out to most popular streaming platforms and download stores and paying royalties based on the plays and purchases. However, the costs and benefits of each one, vary a lot.

Typically, the cost of a traditional label distribution is about 15% to 20% of revenue, depending on the size of the catalog and the success of your label. Cheaper services can appeal cost-wise but might end up being more expensive due to the manual work you must put in to get everything done. Investing in the right service will possibly save you more in the long run.

“Instead of solely focusing on the price, consider what you're hoping to accomplish with your digital distribution service, and which features you value the most.” Juka Hynynen points out.

According to Hynynen, the service level of your distribution channel matters:

  • Does the platform have an active customer support?
  • Does it include good analytics and business planning tools?
  • What’s the speed of the release process, few days or few weeks?
  • Do you have access to royalty advances? 

“Pay attention also to how many streaming services are included in the distribution, 20 or 200? If you’re looking for international markets, does the platform deliver to specific regions like China, a huge market on its own.” Hynynen reminds.

 


 

 

2Build a Dedicated Team of Professionals

Music productions are a big investment for labels. Creating a production plans for your artists will help you steer the process and avoid unexpected expenses. But to achieve that it’s necessary to have a team of creative talents and music business professionals in your network.

The simple fact is it’s hard to get everything done on your own. So ask yourself:
  • Do you have your go-to producers, sound engineers, mastering experts and recording studios?
  • Do you have a network of music video producers, graphic designers for cover art, or freelance photographers for visuals? 

“Rather than trying to manage it all on your own, build a team of talents to keep the wheels turning. Your time equals money, so knowing your strengths and weaknesses will help you in finding the right people to complement your skills.” Hynynen adds.

 


 

 

3 Create a Strategic Digital Marketing Plan

For many labels, marketing tends to be a huge time sink, not to mention a big cost. With the volatile music markets label owners might be struggling to get results with their current efforts.

“It’s worthwhile to re-evaluate whether your marketing strategy is effective enough. Are you stuck in old patterns or are you actively finding new ways to reach out to your audiences?” Hynynen asks.

With a clear strategy and modern digital marketing tools, you could reach much larger and targeted audiences than with traditional paid marketing.

With the rise of social media, you can achieve great results by combining organic content and paid advertising, while giving your artists a 24/7 connection to their fans. Everything starts with knowing your target audiences, the channels they use, and the themes they are interested in.

“Make sure to include promotion into your marketing plans. Think about how you can approach radios stations to get more radio plays, have songs added to popular playlists, and find commercial opportunities and partnerships for you artists.”

 


 

 

4Diversify Your Revenue Streams

With the decrease of record sales and the rise of digital distribution and streaming, it’s important for label owners to understand where their cash flow is coming from in order to sustain their label as a business. As streaming payouts hardly support music companies anymore, labels need to look for more diverse ways to increase profitability.

“Music publishing and licensing is an increasingly important revenue stream for independent labels and artists. Publishing refers to the ownership of songs and compositions, while licensing makes your music available for sync deals with visual media, including adverts, games, TV shows and movies.” Hynynen explains.

Other important revenue streams are touring and merchandise sales. On top of that labels should also tap into performance royalties from radio and live plays by registering with a Performing Rights Organization.

With a background at both major labels and owning an indie label and a recording studio, Hynynen has a lot perspective on how the demands of the industry have changed.

“One big opportunity for labels is to apply for advance payments, a perk previously mostly reserved just for major label artists. But with modern analyzing and AI tools, such as the ones at Family in Music, indie labels and artists now have access to the same financial instruments.” Hynynen brings up.

 


 

 

5 Use Modern Business Tools

Running a label might start as a passion project, but in the long run it’s more than just releasing good music, it’s running a business.

Each release requires proper planning, but project management and financial administration can be very time consuming. With a variety of tools out there it’s hard to know which ones work for your needs.

“Modern analytics and royalty sharing tools are a must for label owners. Make sure your distribution platform provides you real-time data to support your decision making. When you manage your royalties, bookkeeping and money transactions in one place, you are saving yourself a lot of hours and you can concentrate on your creative work.” Hynynen explains.

“Music people might not always be the most business savvy type. That’s why the goal of Family in Music is to give label owners a one-stop-shop for running their label, with the right tools and resources.” Hynynen adds.

 

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Success, Your Way

Building a label takes time, so be patient.

Success means different things to different people, make sure you define your vision and follow it.

Having the right tools, resources and networks will help you to achieve your goals.

Juka Hynynen knows what a difference having access to the right resources and networks can make. That is why he has created Family in Music to offer indie labels and DIY artists all the tools they need to succeed, all on one platform.

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Päivi Kankaro
Päivi is a content creator and online producer with 13+ years of expertise. She has developed digital content marketing strategies and communities both online and offline. For eight years she has been working in New York City helping to build start-up companies from the ground up. Now she’s creating outstanding content for the FAIM community.