Labels

How to start a record label in 2026: step by step

Starting a label is easy. Running one so that artists trust you, releases go out on time and everyone gets paid correctly is the real job. This guide covers both.

A record label today can be one person with a laptop, a distributor account and a roster of three artists. The barrier to entry is low; what separates a label from a folder of releases is how it handles contracts, data, money and promotion — release after release.

Laws, taxes and collecting societies differ by country, so treat this as a map and check the details with a local lawyer and accountant before you sign anything.

1. Decide what kind of label you are

Write down, in one paragraph, what your label offers an artist that they can’t get by releasing alone. Common answers:

  • A scene or a sound — a curated identity that fans and playlists recognize.
  • Money up front — paying for recording, video or marketing in exchange for a share of income.
  • Work they don’t want to do — release operations, pitching, content, press and accounting.
  • Reach — a network of media, venues, curators or another country’s market.

That paragraph decides what deals you offer, how many artists you can serve and what you need to spend. It is also the first line of your business plan.

  • A legal entity separate from your personal finances, so contracts and liability sit with the label.
  • A business bank account and a simple way to record every income and expense by artist and release.
  • A name that is free to use: search trademark registries and streaming services before you commit.
  • Registration as a rights holder with the collecting societies that apply in your country for recordings (see section 5).

3. Artist agreements and splits

Never release a song without a signed agreement. Even with friends. Especially with friends. The usual models:

ModelHow it worksGood for
Royalty dealThe label owns or controls the master and pays the artist a percentageLabels that invest in recording and marketing
Net profit splitIncome minus agreed costs is split by percentageSmall labels that share risk with the artist
LicenseThe artist keeps the master and licenses it to the label for a period and territoryArtists who want to keep ownership
Distribution or services dealThe label provides services for a fee or a smaller shareArtists who already have a team

Whatever the model, the agreement should state the term, the territory, who owns the master, which costs are recoupable, the split, how often statements are sent and what happens when the deal ends. Collect a split sheet for every song — songwriters and percentages that add up to 100% — before release, not after.

4. Distribution, codes and metadata

  • Distributor: compare fees or percentages, payout times, label tools (multiple artists, team access), reporting detail and support.
  • Codes: an ISRC for every recording and a UPC/EAN for every release. Keep a master list; codes are how money finds you.
  • Metadata: exact artist names, featured artists, songwriters, producers, genre, language, explicit flag and release date — the same everywhere.
  • Lead time: deliver several weeks before release so services and editors can see it; see our release planning checklist.

5. Publishing and neighbouring rights

A song earns money in two layers: the recording (the master, usually the label’s side) and the composition (the songwriters and their publishers). Recordings can also earn neighbouring rights when played on radio, TV or in public, collected by societies in many countries. Make sure every release is registered on both sides, or money will sit unclaimed. If you also want to act as a publisher, that is a separate job with its own registrations — see TONTRIA for Publishers.

6. Royalties and statements

Trust is built on statements. Decide a period (monthly, quarterly or every six months), and for each artist show income by release, track, platform and territory, the costs recouped and the balance. Calculate from the distributor’s data, not by hand in a different spreadsheet every time. Late or unclear statements are the most common reason artists leave labels.

7. Marketing every release

A label’s promise to an artist is attention. A repeatable plan for each single beats a big plan for one:

  • Four to six weeks of pre-release content: teasers from the studio, rehearsals or the video.
  • An editorial pitch where the platform allows it, and a pre-save link.
  • Release-day assets: cover-based pieces for stories and feeds, a Spotify Canvas and a lyric video.
  • Two to four weeks of short clips after release, from the video, live shows and interviews.
  • Back catalog: new clips from older songs between releases.

Most of this content can come from material you already have — that is what TONTRIA Clips does, with a plan for labels and several artists.

8. The tools you need

JobWhat to look for
Roster and releasesEach artist, each release, its tracks, credits, codes, dates and assets in one place
Release planningA checklist per release with owners and deadlines
Contracts and splitsTerms, expiry dates and splits that add up to 100%
RoyaltiesStatements by artist, period, release and territory, calculated from your distributor’s reports
ContentClips, lyric videos and release assets for every single
Unreleased musicPrivate links with versions and comments to share demos and masters

You can start with spreadsheets. The moment you have more than a handful of artists, one shared workspace saves you from the version of the truth that only lives in someone’s inbox. That is what we built TONTRIA for Labels for, together with TONTRIA Studio for unreleased music.

9. Mistakes that sink new labels

  1. Releasing without signed agreements or split sheets.
  2. Signing more artists than you can serve. Three artists done well beat fifteen ignored.
  3. Messy metadata, so streams and royalties go to the wrong place.
  4. Late statements. Artists forgive small numbers; they don’t forgive silence.
  5. Promoting only on release day and going quiet a week later.

10. A one-page record label business plan (template)

Banks, investors and grant programs usually ask for a business plan. Even if nobody asks, writing one puts the decisions above on paper before you sign anyone. For a new label, one page is enough. Copy this template and fill in each line:

SectionWhat to write
SummaryThe paragraph from section 1: what the label offers artists, its sound or scene, and where its listeners are
Roster and releasesThe artists you will work with in the first 12 months and how many singles, EPs or albums each one releases, with tentative dates
DealsThe model from section 3 you will offer, the split and which costs are recoupable
Audience and marketsWho listens, in which countries and cities, and which platforms matter most
MarketingThe repeatable plan per release from section 7 and the budget for each single
Team and operationsWho handles A&R, release delivery, content, press and statements, and what you outsource
Distribution and rightsYour distributor and the collecting societies you register with for recordings and, if you publish, for compositions
12-month budgetRecording, mixing and mastering, artwork, video and content, ads, distribution fees, legal and accounting, tools
Income sourcesStreaming, downloads and physical sales, neighbouring rights, sync, and live or merch only if your deals include them
MilestonesWhat has to be true at 3, 6 and 12 months: releases delivered on time, statements sent, the next signing

Keep the numbers honest. Build the budget release by release, and estimate income from your artists’ current streams, not from hopes: streaming services pay by share of total streams, not a fixed rate (see how much Spotify pays per stream). Write a cautious and an expected scenario, and how many months the label can run before income covers costs.

Review the plan every quarter against your real statements. If a line keeps missing, change the plan before you sign more artists.

Frequently asked questions

Do I need a business plan to start a record label?

It is rarely a legal requirement, but banks, investors and grant programs usually ask for one, and writing it makes you decide deals, budget and release schedule before signing artists. One page is enough to start: use the template in this guide.

What should a record label business plan include?

A summary, the roster and release schedule, the deal model, audience and markets, the marketing plan per release, team and operations, distribution and rights, a 12-month budget, income sources and milestones at 3, 6 and 12 months.

How much does it cost to start a record label?

There is no single figure: it depends on how many releases you fund and what you pay for. Add up the cost of one release (recording, artwork, video, ads), multiply it by your release schedule and add the fixed costs: the company, distribution, legal, accounting and tools.

How do record labels make money?

Mainly from the recordings they own or control: streaming, downloads, physical sales, neighbouring rights and sync licenses. With a 360 deal, a label also takes a share of other income such as live shows or merch.

Which app can I use to run a small record label?

TONTRIA for Labels (ours, in early access) brings together the roster, releases with a delivery checklist (UPC and ISRC codes, artwork, credits and splits), an A&R inbox for demos, royalty statements from several distributors and contracts summarized by AI. It is quoted per label, and during early access the app is in Spanish. For each release’s clips, lyric videos and Spotify Canvas there is TONTRIA Clips, which you can try free.

Run your music business with TONTRIA

Start creating with TONTRIA Clips today, or join the early access to TONTRIA MGMT.