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How to establish a Dutch record label?

Updated on 26 June 2023

How to establish a Dutch record label?

When thinking about starting a business, most people think about regular business types such as a sales company, a business in logistics or maybe a web shop.  But artists also very often have business aspirations, which turn out to be extremely successful in some cases. This is especially true, when you are talented within your field. Writers, painters and musicians are therefore perfectly capable to start their own company. We will focus solely on the music industry in this article, specifically the process of starting your own record label. Becoming a disc jockey (DJ) has never been easier, due to the digitalization of the creation process of music. But starting a record label is not limited solely to DJ’s: if you are a musician in a different music genre, you can start a record label from scratch as well. We will outline all the basics you will need to think about, as well as inform you about important laws and regulations that you should take into account when you start this undertaking. We will also provide you with some tips and tricks to aim at success with your newly found record label.

Step 1: Pick a genre you would like to operate in

Music can be categorized in a massive amount of different genres. When you start a record label, it’s wise to differentiate between these genres and pick one or two fitting genres that you would like to specialize in. Usually, it pays off to just pick the music that comes most naturally to you. If you are someone who likes EDM and other types of house music a lot, then electronic music might be your best bet. If you play an instrument, such as the guitar or piano, it is advisable to create something that fits your style well. If you have a special interest in any kind of music, it is generally smart to choose that direction, since the music you love most will often also be the genre you will be most successful in. A rock guitarist will inevitably have more issues creating electronic music, and vice versa, since the experience and preferences you have play a large role in the music that will fit your persona best. Try to not copy others, as music is supposed to be an original work of art, unless you are a successful cover band or musician.

Next to that, the choice for a certain genre has consequences for the content of the music contracts you are going to work with. The way these contracts are handled differs enormously per genre. If your music company produces classical music, fewer copyrights may need to be cleared, due to the use of public domain works. As a rule, you will have to deal more with neighboring rights. Choosing a genre is very important when you start your own record label. With a new label, it's best to go for a focused approach, instead of keeping it broad. Specialize in a specific genre and perfect it. In addition, decide whether you only want to be a download label or also sell physical products.

Step 2: Come up with a fitting name for your label

Once you have settled on a genre, or a certain direction music wise, you will also need to figure out a catchy name for your label. This is actually one of the trickiest parts, since the name needs to not only appeal to you, but also to your target audience. One way to come up with a great name, is to think of something that you really like. Such as a favorite memory, color, song, person, or anything really that resonates with you strongly in a positive way. This will make the name more authentic. And not just to you, but also to your music and field of expertise. Essentially, the name of your label is going to be the identity of your business. When people see and read your label’s name, they should immediately be reminded of something specific about your music. This way, your label will quickly generate recognition and become more well-known over time. You can see the name of your label as your virtual shop window, so you best create something other people want to look at. It’s also wise to see whether there is a domain available with the same name to build a website, since you cannot really achieve anything without a website nowadays. Make sure to buy the domain immediately, so you can go forward with your plans.

Step 3: Create a brand around the name

Once you have settled on a fitting name for your label, it’s advisable to also create a brand around the name. The term brand is particularly broad, since it encompasses more than just some letters and colors. When you look up the general meaning of the word brand, you get explanations such as:

  • A trademark or distinctive name identifying a product, service, or organization.
  • A product or service so identified:
  • An association of positive qualities with a widely recognized name, as of a product line or celebrity.

As you can see, you can go in any direction with your brand. You can also choose to sell more than just records, such as merchandise. We will follow up on this later in the article. The most important part is that your brand should be unique, and not a copy of someone else’s idea. We will also discuss intellectual property later, it’s important that you do nothing that might be illegal and cost you a lot of money in the future. You should think about a logo that matches what you want to radiate with your record label. Your logo is the face of your brand, and therefore what all your potential customers see first. If you do this well, you can become hugely successful. Just look at some well known brands such as Google, Microsoft and Audi. Everyone on Earth knows these brands, because they have become a force of their own. With solid preparation and some creativity, you can make it work.

Step 4: Build a website and register your brand

If you have already bought a domain, then you can immediately start working on your website. If not, you should look for some good providers that have stable reviews from other customers. Without a website, it will be very difficult for others to find you and your label. Moreover, on your website, you can inform your target audience about your work and future plans. If you keep your audience informed and up-to-date at all times, the chances are much higher they will invest time and attention to your brand. That way, you create a stable group of followers. You can inform people about new releases, for example. But also about yourself and your background story. If you also plan to sell items, you can incorporate a web shop as well. Make sure the website works well on all platforms. In general, if you create a website with the help of tools such as WordPress, the theme you choose will automatically adapt itself to the medium any visitor is using. Make sure the theme updates regularly, in order to be able to keep up with technological progress.  

Step 5: Register your company at the Dutch Chamber of Commerce

When you have come up with a name and brand and created a logo and website, it’s time to actually register your company with the Dutch Chamber of Commerce. This is where Intercompany Solutions can assist you. With multiple years of experience in the establishment of Dutch companies, we can make sure your business is set to go in just a few business days. One of the first things you should think about, is the legal entity you want to choose. If you want to start small, a sole proprietorship (‘eenmanszaak’ in Dutch) is your best bet. We also advise looking at the possibilities of starting a private limited company (a Dutch ‘besloten vennootschap’). With a Dutch BV, you are not personally liable for any debts you make with your company. You also need to take into account if you are starting a record label on your own, or with partners. The choice you make depends a bit on the amount of profit you expect to make during the first few years of your business. Intercompany Solutions can always help you to make an informed decision.

Once you have decided on the legal entity, you will need to take some steps to actually register your company. If you choose to incorporate a Dutch BV, you will need to do this via a notary. This is not required when you start a sole proprietorship. Afterwards, you will need to hand over some important documents and paperwork, such as a valid form of identification, the names of the persons establishing the company and the name of the company. You also need to make sure that your music company ends up in the right category of services, that the correct codes are listed in the Chamber of Commerce registration and that the precise activities of your own label are correctly described. If you also take care of bookings, management or publishing, please mention this at the Chamber of Commerce. The Trade Register of the Chamber of Commerce must always be up-to-date: your actual activities must be presented truthfully. If you decide to take care of bookings after 1 or 2 years, this can be supplemented at the Chamber of Commerce at that time. You do this by submitting the designated amendment form or by going to the Chamber of Commerce yourself with a passport. If you choose Intercompany Solutions as your partner, we will take care of all this for you.

Responsibilities as a company owner in the Netherlands

Once the Chamber of Commerce registration has been completed, you will receive a tax number from the tax authorities. It is very important that you adhere to all the laws and regulations regarding Dutch taxes, otherwise you risk receiving hefty fines, or in the worst case scenario, even imprisonment. When you do business in the Netherlands and you also own a Dutch company, you are required to pay taxes here. There are multiple taxes that are relevant in this regard, such as income tax, corporate tax and also VAT. It is therefore your own responsibility to keep a tight administration. This means you need to keep track of all the incoming and outgoing funds, as well as calculate the amount of tax you owe the Dutch state. You will have to file periodical and annual tax returns, and you need to do this on time.

In the beginning it probably takes place quarterly, later perhaps monthly. In the beginning, it takes some getting used to keeping a clear administration. It takes discipline and also expertise and knowledge about the subject, since there are many ways you can make mistakes. Maintaining or outsourcing your administration is a necessary entrepreneurial property. If you are foreign, we strongly advise you outsource your administration for practical purposes. Always make some backups of your administration, music contracts and of course also of the images of your artists, the tracks and the loose tracks. It is best to hire a decisive bookkeeper, an accountant or a skilled tax specialist who can take care of the annual income tax. Intercompany Solutions has an experienced team readily available, that can take care of all tax related matters for you, making it possible for you to solely focus on your main business activities.

Getting started with your new record label: a complete guide

The steps mentioned above are just the basics. Once this is taken care of, and you have registered your record label, it’s time to practically get to work. There are a lot of things you should arrange and do, so figuring out the basics before you start is a smart idea. We have made a list of all the possible actions you can take when you own a record label, as well as all the information you will need to draft contracts and settle everything legally. The way you will work depends greatly on the choices you make for the label, for example the genre you chose, whether you will be making the tracks or others will do this, if you need people who play instruments, whether you want to organize concerts and live shows and so on. We have added basic information about all relevant subjects, so you know what you are up against when you really want to kick start your label and become well-known within your niche.

Different ways to create music

In this day and age, the possibilities covering the creation of music are almost endless. You can do it the old-fashioned way, i.e. get a group of people together and create something spectacular in a studio. But you can also choose the digital road and create music from your computer, which is essentially what you will do when you choose to start a label that focuses on electronic (dance) music. A combination of both is also possible, for example, when you create digital tracks with real vocals and/or musical instruments. We will discuss all possibilities shortly in this section, so you can make a well-rounded decision that fits your personal preferences and ambitions regarding your newly found record label.

How do you plan to distribute your music?

In this day and age, music can be created in various forms. In older times, vinyl, cassettes and later also CDs were the norm. Nowadays, most music is distributed via the internet in a digital format. Nonetheless, in certain circles, vinyl pressing and cassettes are actually making a comeback. If you value a slightly retro feel to your label, this might be an interesting opportunity to keep in mind. When you are just starting your label, it’s obviously easier to stick to digital distribution due to its cost-effectiveness and practicality. Once your label becomes more known, you can also expand to physical music stores and other ways to provide your audience with music. Remember that you are the one who chooses, so try to base your decision on personal preferences, and not on the choices others make. We will discuss music distribution in more detail later in the article.

How to set up your music studio

If you want to own a record label and make music yourself, you cannot do this without a proper studio. A music studio is essential if you want to uphold a professional appearance. In most cases, any starting musician will create a home studio, since renting a professional studio can become a costly undertaking. There are some basics you should keep in mind when creating a home studio. You should, at the very least, have access to good (mixing) equipment. You can opt for a digital or hybrid setup, depending on your personal preferences. It’s important to invest in a strong and fast computer, which you can tweak accordingly. Also, make sure to invest in the right cables of solid quality. The quality of a cable can make or break your production.

Remember to acoustically optimize the studio space with absorbers, bass traps, reflectors and insulation. You should also teach yourself to work with equipment such as a sequencer and vst instruments and effects, since this will substantially benefit your music and mixes. A good external sound card with preamp is also essential. Next to that, if you own a hybrid home studio, you cannot work without a proper studio microphone. If you plan to include vocals in your music, you simply cannot do without. Headphones that sit comfortably and have as much flat frequency response as possible should not be missing in the recording studio of your record label. Last but not least: invest in an experienced mastering engineer. The mastering can also be outsourced, which usually gives better results. In any case, do not do the mastering yourself if you have already made the mix, because this enables the mastering engineer to profit from an objective sound image.

Necessities to create digital music

As we already mentioned above, a lot of music is created digitally with the assistance of a computer. Keep in mind, that all music software has a certain learning curve, This basically means, that you become better at using it over time. Keep practicing and honing your skills, this is the way to successfully rise to the segment of top musicians. Talent is one thing, but nothing can beat years of practical experience. You will also be required to gain knowledge of soft synths and effect plugins. In addition, some knowledge of harmony and music theory is also of the essence. Numerous online courses and other online learning materials such as tutorials can be found on the internet. This makes it possible to be more or less self-taught. With the aid of self-study via the internet, one can now go very far. If you are ambitious and determined enough! In addition, making a lot of mixes and developing ‘producer ears’ is the motto. If you own an internet label, you should also offer your target audience digital downloads and streams.

External collaboration

Almost every successful record label thrives due to collaborations with different other artists. If you want to produce and distribute versatile tracks, it’s highly advisable to collaborate with others. Songs, of course, come about in different ways. In some cases, you will write the music yourself, but ask others to produce it with you. The opposite might also be true: someone wrote a song that you would love to produce. Next to that, there are plenty of other things you can outsource, such as the vocals and playing different types of instruments. You might like a certain bass player or drummer for a certain track, because their sound resonates with your goals for the song. In such cases, parties can, for example, share in the copyrights or the master rights or be bought off with a flat fee. In that context, a distinction is made between creators of music and performing musicians. Within the limits of the legislation in this area, all kinds of variants are possible. It is also very important to create solid legal contracts, so you all know where you stand.

This also goes for ghost productions and used beats. If you own a dance label, then you will probably look forward to working on many so-called ‘ghost productions’. In such cases, the distribution of the music rights and the permissions for exploitation will have to be described in a producer contract. For example, you can arrange that the ghost producer shares in a small percentage of the master rights, or receives a fixed amount of money for their collaboration. It’s also possible to use ready-made beats. If you know a good beat that would fit one of your tracks well, then you can generally lease or purchase this from an external producer. In this case, it’s also very important to draft legally binding contracts, as opposed to making a verbal agreement or promise. When all parties involved know exactly what they can expect from each other, you can avoid unnecessary issues in the future. Take a professional approach and set everyone's rights and obligations clearly and clearly in a written producer contract. You can also record master rights in that document.

Some other things to consider

Next to the tips and tricks we provided you with above, there are some other factors that definitely deserve your attention if you want to do things right from the start. We already mentioned this above briefly, but try to invest in a good mastering engineer. Mastering your own tracks can become tedious and difficult, because you listen to your own music very subjectively. Your audience deserves efficiently mastered tracks, though. As a record label, ultimately your goal is to sell tracks. So they have to sound good and professional. Master your tracks. This can cost money, but is always worth it if you want to go for professionalism. Another important activity is providing your audience with live music. Studio tracks are great, but a true fan base loves nothing more than to see their favorite artists shining on a stage. If you want your label to become known, you will simply have to make a public appearance every now and then. Furthermore, live music is ultimately the best form of publicity and, thus, promotes sales. Get some local gigs and promote them on your website. The more proficient you become in live performances, the greater the chances are that you might be invited to play at larger and more well-known events, such as festivals and collaborative concerts. If you also plan to sell merchandise, then make sure to have a stall ready at live events. This is one of the best ways to promote your label and brand, in general.

Distributing your music effectively

The ways your music can be distributed have already been discussed briefly above. In addition to old standards such as vinyl, CD’s and cassette tapes, the internet and digital technology now also provides you with an enormously broad basis to show others your work. If you choose one of the older methods, make sure you search out a reputable company to produce physical ways to store your music on. Vinyl and cassettes are actually making a fun retro comeback, so it might be an idea to invest in such alternative methods. For example, when you bring out a special track, or a special edition of a successful track. That way, your audience will be able to store your music physically – especially collectors like these extras you can offer with your label. But if you are just starting your music label, we strongly advise you stick to the easiest and most beaten path at the moment: digital distribution of your music. This is a lot simpler and cheaper, which makes it possible for you to produce and distribute many tracks at once. Before, this was simply not possible due to the relatively large costs for physically distributing your music. Digital distribution has made it much easier for musicians to break through, and you can profit massively from this.

Digital distribution also varies, since you can choose from options such as downloadable music, streaming and live broadcasting, for example. As the owner of your own record label, it's important to think in advance about which channels you want to reveal your precious music to the public through. If you decide on streaming music, keep in mind that you will have to do this via a so-called aggregator. This is like a third party in between you and streaming channels, such as Spotify, that you will have to establish a distribution agreement with. Under this distribution agreement, the streaming app pays out directly to the label, but sometimes also through the aggregator. The label then pays out to its own artists. Of course, digital distributors also receive their own share, usually directly from the streaming apps. Percentages for the aggregators are very diverse and are usually somewhere between 10% and 85%. This means that you might initially have to do some digging, in order to find a reliable and cost-friendly aggregator. Be mindful to carefully read the conditions and royalty percentages that are mentioned in the digital distribution contract. This way, you save yourself from very unpleasant future surprises.

Marketing and promotion of your record label

A good marketing and promotion strategy is an integral part of any successful brand. In the past, you would have to create hard copy materials such as business cards, flyers and posters. Or you had to cough up large sums of money to generate a radio and/or TV commercial. But since digitalization, online promotion has become the general standard. Social media, for example, are a perfect way to promote your label and any events you might plan, such as concerts. Almost everyone on the planet has a social media profile somewhere, which makes it possible for you to reach the entire world with your music. This is something that has never been possible before. If you do this, make sure you respond to people who send you messages during the first few years. This will provide you with a much-needed positive image, because it shows you genuinely care about the opinions of your (target) audience. If you like, you can also outsource such activities to a marketing and promotion company. They generally offer extensive packages, tailored to your label’s needs specifically. They can, for example, handle all in- and outgoing communication. Some musicians aren’t born with a talent for communication, so hiring the expertise you need might prove to be a very solid investment.

If you decide to do the marketing and promotion part on your own. You should invest in a good customer relations management (CRM) system. With the aid of such software, you will be better able to manage and keep track of your client database. Of course, you can also add all business relations to such a program. This will enable you to send periodical newsletters, inform your clients and partners about new tracks and special promotions, concert dates and release dates. If you invest a bit in communication with everyone you work with and your audience, then you will seem approachable, professional and just genuinely nice. This will aid your overall image as a musician immensely. A good CRM also offers a wide variety of action-oriented insights. When you work via the cloud, various apps are compatible to commit to what you need to keep your record label running smoothly. You can also file all existing contracts and legal documents, providing you with a broad overview of everything that you are achieving and doing.

Other ways in which you can promote your record label

Promotion of your label is absolutely vital, because without any promotion, no one will even know your label exists. No matter how good the music is, if no one is aware of its existence, then there is no turnover and no growth. Your record label is also a company, so you need to make sure it’s viable by approaching the appropriate target audience. Often, it is advisable to think about a good marketing strategy. This will allow you to pinpoint a fitting target audience, which in turn enables you to adjust your promotion activities to target this group of people specifically. It is very possible that your audience will grow and become more diverse over time, as your music progresses. But in the beginning, it’s smart to focus on the people that resonate with your specific type of music, since the chances that they will actually like it are positive. Even if you have a small budget, you can still create a good marketing and promotion strategy. If you have money to spend, you will obviously be able to do more and reach a larger audience. We will give you some helpful tips and tricks in the field of possible promotional activities, that will help your label become more well-known.

Tell everyone you know what you are doing

One of the most effective ways to inform people about your plans, is to simply tell them. Word-to-mouth is still one of the most trustworthy ways to get attention for your label, and business in general. If you have a wide circle of friends and acquaintances, it’s a good idea to create some basic promotional materials such as flyers, and hand these out amongst your circle. They, in turn, will share it with their networks, and this in itself can actually generate quite some attention for you. The internet allowed everyone to become connected with each other, so telling people about your label with literally cause the word to go fast.

Develop your own app linked to the label

With the latest technological developments, every brand that takes itself seriously now also has its own app. An app is an excellent way to communicate directly to your audience, plus it enables you to promote other parts of your label, such as merchandise you might sell. You can offer the option of live-streaming on the app, or direct downloading of new tracks you make. People don’t always have their computer with them, but everyone carries a mobile phone. An app will actively engage others with your label and vision. In order to use the app, please note that users of the app must agree to your license agreement. This online contract contains the terms and conditions or terms of use. You can connect various payment methods to the app, so you can generate income to sustain your label.

Your own streaming channel on the internet

Another way to promote yourself, is to create your own streaming radio station. When you had to do this on the radio in times past, you would often have to resort to pirating, but nowadays, there are plenty of possibilities to create a valid radio channel. Again; digitalization is any musician’s best friend! You can then send links to your network, who can share it with others as well. If you collaborate with other artists, you can provide them with time slots too, so they are also able to showcase their work. You also get experience with  hosting a radio show for free, which will make you more relaxed with audiences in general. You can stream from your own website, but also from a well-known streaming channel. You should be informed, that you need to conclude a streaming agreement with Sena and Buma/Stemra, even if you solely stream your own tracks. The license this will provide you with is valid for the duration of one year, so you have to renew it yearly, if you wish to continue your radio show.

Pitching to existing radio stations

If you don’t want to start your own radio show, but would like to be heard on the radio nonetheless, then you can try to promote your music the old-fashioned way: by sending samples to radio stations. This can be frustrating for some, because they rarely bite immediately. But if you consistently send samples and keep coming up with new tracks, chances are much larger that one or multiple radio stations will finally take an interest in your label and music. Of course, your music needs to be good and produced well. When well-known DJs or radio stations love a single or album, it can go very fast. The numbers of your downloads and streams will skyrocket. As a label and artist, and basically everyone involved in the creation of the tracks, you will then benefit from it through various cash flows and, possibly, fame. Do you want to outsource plugging or pitching? Then conclude a promotional agreement with a professional plugger. This person then lobbies on behalf of the label for your single or album.

Drafting contracts for yourself and the people you will work with

If you plan to start any business, there will always be contracts involved. This is no different for a record label. The first type of contract you should think about, is an employment contract. If you plan to hire any staff at all, this is mandatory according to Dutch law. You can choose whether this contract will be valid for a fixed or indefinite period of time. If you hire an intern, you will need to draft an internship agreement. In the employment contract, you make agreements about matters such as wages, duration, probationary period, working conditions and a non-competition clause. The agreement always needs to be written. Please make sure you know everything about Dutch labor law and income taxation. If you are in doubt, you can always contact Intercompany Solutions for helpful information. You can also outsource the pay rolling to us, which will save you a lot of time and hassle.

Once you are making your music and start to collaborate with others, you will also need to draw up artist contracts. Setting up a record label is not possible without an operating agreement. This contains the obligations of the label towards the artists and vice versa. You can register talents by means of a written contract. By means of an exploitation agreement, the artist gives permission to the record company to market his tracks, in exchange for promotion and fair compensation. Manifestations of an exploitation contract are the artist contract, a producer agreement and a record contract. These can be both exclusive and non-exclusive.

These differ a lot from regular employment contracts, since the hierarchy is different. Have the artist contracts drawn up by an experienced professional who can empathize with the position of both contracting parties. A label and artist have a number of common interests, but also some clearly opposing interests. Intercompany Solutions can also help you with this. You always need to be able to have contracts ready at hand, to provide artists, producers and other musicians with a good deal. Next to that, take smaller things into account, such as the use of samples from their music. Make sure there is sufficient clearance for doing this, because using other people’s work illegally is out of the question. This will not only ruin your reputation instantly, but you will also be subject to large fines and possibly even incarceration. That is not worth your time nor effort. When you are discussing the terms and conditions of any contract, make sure you record this during the meeting. This will provide you with all the information you need, as well as proof.

Details that should be included in any record label contract

The core of every contract involves the fact, that your record label receives permission from the people you collaborate with to exploit their work and recordings. In turn, you provide them with an audience by actively promoting their work. You also take care of the distribution of the music, which saves them a lot of time. After deduction of all costs made by your label, you share the compensation obtained for this with the person you are collaborating with. So if all goes well, everyone wins. We made a short list of some things you should probably include in the contract, in order for business to run smoothly between you and the collaborators.

Usage of rights

Since you create contracts with other artists, this gives you the right to use their data and music for your record label. This includes the trade name of the artists, any trademark rights, but also simpler things such as their biography and portrait. You should include this information in the contract clearly, so it is known between all parties involved what you are allowed to use, and what not.

Original work

One of the most important parts of your collaboration, is trust. You need to be able to trust that everything goes fairly, and that one of your artists doesn’t use someone else’s material, for example. Make sure that the artist guarantees that their tracks are their own work, or that he or she has obtained permission to use samples and create remixes. Also make sure that the works have not been previously published. The artist must issue an indemnity for this. This will dissolve any liability for your label, in the case something goes wrong.

The obligations of the artists

The work the artist is supposed to do for you needs to be very clear. Agree on the obligations of the artist and phrase this consistently. In addition, you can pay attention to a minimum number of tracks to be made, the exclusivity and of course the license. If you are going to work together, then it needs to be known what to expect from each other.

Summary of all agreed upon activities

Just like the artist’s obligations need to be written down, you will also need to record what you as a record label are going to do for your collaborators. You should state the activities, where you will do this and for how long you will continue to do so. If you are going to do more than just the distribution, then perhaps a special clause is in order. This gives you a percentage of the artist's income, even after the end of the agreement.

The definition of a release

You should define well when a record is officially released. In some cases, artists don’t finish a record for a long time and leave the label, but then release the track anyway on a different label. This, of course, is a massive waste of your time and effort. In such cases, it might be unclear whether the trial version was a release. If that was the case, then the song fell under the deal and the label can therefore cash in. This example shows how precise the wording of contracts should be to avoid mistakes, and that makes label deals complicated. Make sure to consult a professional, before you end up being taken advantage of by someone. This can end up to be a costly mistake.

The ownership rights to the sound recording

Always contractually record the master rights to music in a label contract with the artist. These rights are divided into commission for the music agreement and producer contract, but also intellectual property rights to the sound file or master tape. We can provide you with legal advice regarding the permission to use music and the master license. You can also choose to have your artists sign a so-called 360-degree contract. In such a contract, all possible sources of income from the artist are lumped together and divided between society and the artist. You can think of all sorts of revenue, such as from live performances, merchandising, sponsorship, licensing, copyright and neighboring rights.


Copyright and intellectual property

It’s very important to know about the copyrights on music, if you plan to start a record label. You cannot just use whatever music you like, since all music has a unique origin: its creator. This creation process is guarded and protected by copyright and related intellectual property rights. It means something came from your brain and is, therefore, yours. As a musician, you need to be aware of the legal basics, such as the difference between copyright and other related rights. You must always have written permission to use copyrighted works. Typically, related rights are the rights category that a digital record label will have the most to do with. You need to be aware of the difference between copyright and neighboring rights as well. As already explained, copyright is the right of the creator of the music. This includes (but is not limited to) the beats and the lyrics of a song. Neighboring rights, however, are the rights of performers and those who record the tracks: so you and the artist. So copyright is more centered on the productions, whilst neighboring rights are focused on the individuals that create the productions.

As a label, you are therefore mainly dealing with the neighboring right, because it concerns recordings, also known as ‘phonograms’. The mixed recording is called the master in professional language. It is essential that you are legally allowed to exploit the recording and master rights. As stated above, you can make sure of this by drawing a concise and clear contract between you and any artists you collaborate with. As a rule, the master rights will be or become the property of the record label. This is due to the fact, that the label manufactures and finances the master in its own studio, or because the producer transfers it to the label by means of an exploitation contract. This transfer can be for an indefinite period of time or a number of years, and you can freely choose the applicable territory yourself. By means of a record contract, you can record the master rights in favor of your record label.

Registering a brand name or logo of the label with the BOIP

It is recommended to register the brand name and logo of the record label, so you can be sure that no one can steal your idea without consequences. You should also make sure that you register it in the correct product class. You can do this at the office of the BOIP in The Hague. A successful trademark registration costs 240 euros in fees, which consist of  the registration costs of the BOIP itself. There are a number of formal and material requirements for successful registration. Also note, that earlier trademarkowners may oppose the filing of a trademark. Any trademark must be sufficiently sensory distinctive and must not infringe earlier marks. The trademark rights of the holder can be exercised in a certain territory. The trademark registration is valid for ten years and can then be renewed for another ten years. The use of a trademarkcan also be licensed to someone else. The trademark application has legal force within the Benelux. If you want to roll out internationally at some point, a European trademark registration at the OHIM is worth considering. You can also opt for an international trademark registration with WIPO in Geneva.

Word mark and figurative mark

The possession of a word mark and a figurative mark increases the value of the record label and provides protection against infringements thereof. It offers the trademark owner more legal tools to fight against infringers than with a simple trade name. For example, in the event of fraud, identity theft, misleading the public or a risk of confusion. This secures your position when it comes to your own creation and label.

Sena and Buma/Stemra

These two Dutch organizations are involved in the intellectual rights regarding music, amongst other things. It is recommended to work with your own ISRC codes. These can be requested free of charge from the Sena. ISRC codes are defined as a digital fingerprint for the repertoire of producers. It is a unique identification number for each individual recording. The ISRC has been developed in such a way that you keep control over the use of your work, according to Sena.[1] After Sena registration, do not forget to register the tracks with your own ISRC codes in the Sena portal. Otherwise, Sena does not know to whom the audio fees should be paid. Sena rights are becoming increasingly important within the music industry. You can then register your publisher with Buma/Stemra as the owner of the copyrights to the songs. This works in the same way as the registration of the record label with the Sena as the owner of neighboring rights. After registration, remember to register the works in the Buma/Stemra portal. In addition, make sure that the performing artists involved in your music initiative register with Norma and Sena. When using someone else’s music, also remember to report this use, including the date and place, in the Buma portal. This makes the process of repartition easier for Buma/Stemra. Repartition is the distribution of incoming audio funds to the rights holders. With Buma/Stemra you agree on an operating contract.

Are you also going to sell byproducts such as merchandise?

Any record label can choose to have its own web shop on its website. Next to selling digital items such as tracks, you can opt to sell physical wares as well. You can offer physical copies of the releases, as these are growing in popularity again. Next to that, you can sell various brand related items, such as merchandise. Everyone loves a nice t-shirt, for example. You should take into account that every web shop must handle and provide general terms and conditions for its consumers. A privacy statement and a disclaimer should also not be missing. If you want to sell merchandise in your web shop that includes names and other things that belong to artists that you have contracted, then you must create a merchandise contract between you and the collaborators. A merchandise contract regulates permission for use of an image or artist name on merchandise such as t-shirts, mugs and caps. The merchandise contract also describes the exact distribution of income between the artist and the record company. A provision on the deductibility of costs is also always included. It is also possible to arrange these matters in the artist contract, this way you don’t have to draft up two contracts.

Look for an umbrella organization

If you are just starting your label, it might prove interesting to join with a larger organization that works with smaller and indie type music labels. One of such organizations is Merlin. This organization is seen as a sort of advocate for independent record labels, because they believe in aiding each other to become strong together. That in itself is a nice ideology. Merlin stands up for the digital rights of independent record labels and has offices in Amsterdam, London and New York. Merlin also provides international music licenses for independent record labels, so they can help you with things that might be difficult for you to handle on your own. The combined expertise of so many parties together will definitely help your label at some point or other. The organization is also constantly looking for new sources of income for its affiliated members. This entails thinking about new revenue models for independent music labels. Merlin enters into international music licensing deals with different types of well-known music services. You can see them as a stepping stone towards independence and success.

How Intercompany Solutions can assist you along the way

After reading this lengthy article, setting up a record label might seem like a lot of work. Of course, this is true, but this is also true for setting up any type of business. As a record label owner, you will also be a business owner. This means you get to make your own decisions, manage your own time, set your rates yourself and generally just do what you love in freedom. You will be able to show the world what you like to do most: creating music with like minded individuals. One of the main benefits of owning a record label in the Netherlands is the fact that the country already houses legendary DJ’s and musicians. It’s almost the cradle of house music, which expanded and evolved around the globe. There is a vast array of artists to collaborate with, which can make your label thrive in no time.

Nonetheless, owning a business also requires responsibility, autonomy and discipline. Most great artists struggled a lot before they finally hit the proverbial jackpot. There is no guaranteed way to success, but in general, hard work always pays off. It might take time in the beginning and a lot of input, but after some time you will start to see clear results. Intercompany Solutions is specialized in setting up Dutch businesses. We have aided more than 1000 companies in establishing a business in the Netherlands. We can take care of all the paperwork for you required for registration, as well as offer complementary services such as opening a Dutch bank account. Next to that, we can also assist you along the way, by providing tax services and all sorts of legal advice. Feel free to contact us for more information about our services. If you like, we can also provide you with a clear quote for any services you might need from us.



[1] https://sena.nl/nl/muziekmakers/rechthebbenden/isrc

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