Having a record label is a very big business in Nigeria because there are lots of talented young artists that are willing to sign a record deal, and if you invest on them you are going to get a very good return on whatever you are going to spend to make any artist have a successful musical career.
But then, having a record label is going to come at a cost which will depend on whether you are going to run a small record label or a very big record company.
It is however worth mentioning that this digital era has made it possible for for just anybody to run a record label right from his home and make so much money from the music business.
This is because you can undergo music distribution and promotion online right from the comfort of your home.
In this article therefore, I am going to walk through the cost of having a record label in Nigeria, and am going to do so based on having a small record label or a big record company.
So without any further ado, let us get started with this article.
The cost of having a record label in Nigeria.
Having a record label in Nigeria will cost around 1,000,000 (one million Naira) for a small record label which you can operate from the comfort of your home, and around 10,000,000 (ten million Naira) for a big record company that will require a studio space.
These cost is going to include registering your record label, renting an office space, buying recording studio equipment’s, paying artists advance and song recording, distribution ad promotion.
The table below is the breakdown of the cost of having a record label in Nigeria, both a small record label and a big record company.
|List||Small recording studio||Big record company|
|Registering your record label (Limited Liability Company).||100,000 (one hundred thousand Naira)||100,000 (one hundred thousand Naira).|
|Renting an office space.||–||2,000,000 (two million Naira).|
|Buying recording studio equipment’s.||700,000 (seven hundred thousand Naira).||4,000,000 (four million Naira).|
|Paying artist advance.||–||4,000,000 (four million Naira).|
|Song recording, distribution and promotion.||200,000 (two hundred thousand Naira).||5,000,000 (five million Naira).|
|Total cost.||1,000,000 (one million Naira)||15,100,000|
Let’s move on now to explain how you are going to go about the above costs.
1. Registering your record label (Limited Liability Company).
Whether you will start a small record label or a big recording company, you need to register your record label and get all the legal requirements that will enable you to operate it as a business entity.
A Limited Liability Company (LLC) is the best business type for a record label because an LLC is easy and inexpensive to set up, and it also has the least administrative requirements for any formal business entity.
The cost of registering a Limited Liability Company, whether for a small record label or a big record company, is going to be around 100,000 (one hundred thousand Naira).
2. Renting a studio space.
For a small record label, there is no need of renting an office space as you can run it directly from your home.
You can even set aside one corner in your bedroom and arrange your equipment for the studio set up.
But if you want to run a big record company then you will definitely need an office space where artists who are looking for a record deal can visit and drop their demos.
Renting a studio space for a big record company will cost you around 2,000,000 (two million Naira). It is worth noting that you can use your studio space as your studio headquarters.
3. Buying recording studio equipment’s.
If you are going to run a small record label, then you don’t need to buy too much studio equipment’s as a laptop, sound card, microphone, studio monitors and headphone can help you do your recordings perfectly.
So if you budget around 700,000 (seven hundred thousand), it will help you to purchase the basic studio equipment’s you need for your small record label.
But if you want to run a big record company then you will require so much studio equipment’s which will cost around 4,000,000 (four million Naira).
You can check the current prices of studio equipments HERE.
4. Paying artist advance.
For a small record label, don’t worry about any outright deal that will require you to pay an artist advance, rather source out for artists who will accept royalty payment which will allow you pay them from the income that will be coming in when their music starts to bring pay.
From my experience as the CEO of Taculia Records, I have realized that there are so many talented young artists who are eager to sign a record label even if no one gives them shishi.
For a big record company, you can start an artists advance with 4,000,000 (four million Naira).
5. Song recording, distribution and promotion.
If you are running a small record label, don’t worry about contracting a big producer to come and record your artist because you are going to spend a very big amount of money. Instead, reach an agreement with an upcoming but good producer and let him spend much time on perfecting the recording under your supervision.
Don’t go for a big distribution and promotion, rather utilize online promotion strategy because it is not going to cost you that much.
As for a big record company, don’t take chances when it comes to recording, distributing and promoting the song of your signed artists.
So budget around 5,000,000 (five million Naira) that will enable you contract a big name producer, utilize both offline and online promotion strategies to really get your artist out there.
Remember your aim and target is going to be on how to get a return on whatever you have spent to make the artist become successful.
Whatever the cost you will end up spending to have a record label, keep it in mind that you are establishing a business while doing so, and the aim of every business is to make a profit.
To this end, ensure you have the strategies in place that will enable you to make a return on whatever you are going to spend on an artist you will sign to your record label.