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How Do Indie Record Labels Work?

An independent (or “indie”) record label is one that is not funded by one of the big major label companies. They work similar to the big ones but on a much smaller scale and on a more personal level. Most indie labels don't have their own distributors that get the products into stores but rather hire an independent distributor (serves as a middleman between the artist and the store).

Similarities to major labels:

  • You sign a contract with agreements about royalties, cash advances, expenses, etc. It's still a record label so things still have to be paid off from royalty money.
  • Royalty rate: Also about 10% of what the label will make. (See previous blog on major labels for details if this is confusing)


  • Everything is on a much smaller scale. You won't be getting huge 5-figure cash advances that you need to pay off. In some cases, there won't be any advance at all, so you get to keep all royalties.
  • The company will most likely not do promotional/marketing work for you: You'll probably have to spend some of your own money to get yourself out there and be heard. Don't expect to be on billboards and radio commercials just like that. The indie company simply doesn't have the staff or money to do all of that for you.
  • Unlike a major record label, your CD won't be distributed to stores along with a hundred others at the same time. That means, the company will usually put an effort to give you personal attention to make sure that you get sales and the CD doesn't “get lost in a huge pile”.
  • You'll be able to talk to the head of the company in person/over the phone if any problems occur. Negotiations/agreements are much easier to communicate.
  • They will give you creative control and not try to “recreate” the music into something THEY want to sell. Usually an indie label signs artists that they LIKE, regarding both business AND music.

Indie labels are great for bands just starting out. It probably won't make you famous and you won't make a lot of money right away...but it might leave you with more money in the long run.