One of the first things to consider is whether your label will be digital-download only, or if it will produce a physical product such as CDs and records. Many new labels begin by offering only digital music as this requires less money. Also, while overall music sales are decreasing, digital revenue was up 12 percent in 2009. For most people, a digital-only label is the best way to begin.
Unless you already have a roster of artists with music ready to release, you will need to search some out. The Internet is the best place to do this, with websites like Soundcloud, MySpace and Reverb Nation showcasing many unsigned artists. Depending on your budget, you may need to focus on music that is electronic or sample-based, as recording and producing other genres of music like rock, country or jazz requires access to studios, sound engineers and other professionals.
Regardless of what type of label you are operating, you will need an online presence. At the very least, this should include having MySpace, Twitter and Facebook pages for your label, although you should also consider having a devoted website. Your MySpace and Facebook pages will allow you to post artist information and links to allow purchase of your music. They will also give artists a place to submit demo material.
Additionally, you will want to participate in online music forums to promote your label and to get an idea of what current trends are in the industry.
In order to get your music in online record stores like iTunes, Amazon and eMusic, you will need to pick a digital distributor. It works simply: You send your music to the distributor, and the distributor makes it available it online. The distributor will also collect money from sales and pay them back to you. Some distributors charge a flat fee for each album, while some will take a cut of sales. Each distributor offers a different level of service.
There are music organizations and societies that can provide help such as legal advice, written materials about the industry and other resources. In the United States, the American Association of Independent Music (A2IM) and the American Society of Composers, Authors and Publishers (ASCAP) are two of the best-known. Other countries have their own royalty collection agency that will provide similar services.