CD Release Cost

Thinking of releasing your own record or starting a record label? There are lots of things to concern yourself with - promotion, distribution, pressing and so on - but the one thing it all comes back to is money. So just how much is this endeavor going to set you back?
Well, that depends. Album release budgets run the gamut from bargain basement to top of the line. It all comes down to the choices you make. Suffice it to say that you should have a realistic idea about how much you can afford to spend in advance, and you should take advantage of every cost cutting measure you can find along the way. Regardless of the choices you make, here are the costs you'll have to find a way to cover:

1. Recording Costs: If you're a musician putting out your own record, obviously the recording costs are going to fall on you. If you're a record label, especially a small indie label, sometimes the musicians will come to you with a finished product. If they don't, you may have to spring for some studio time. (As an indie label, this is a good time to be honest with your signings about your resources. For instance, it doesn't serve anyone if you empty the bank account on recording and then don't have anything left to spend on promotion. You might consider structuring a deal so that the musicians share recording costs with you. Do these deals really happen? Yes, they do.)
   Recording costs can get out of control in a hurry. If you can call in some favors and keep your costs down, do it. If money is tight, save the six week session in an out of town studio for your sophomore release. Keep the cash in check by turning up well rehearsed and ready to go. Keep the distractions (and distracting people) outside of the studio, and have all of your arguments about new parts and what have you before you show up to lay down the tracks. (Oh, come on, you know it's going to happen.)
   
2. Pressing: Manufacturing may be one of your biggest expenses. There are a few different ways this can go down:
   
   • If you have a distribution deal, your distributor may pay for manufacturing up front and then recoup the costs from sales. This kind of deal is getting harder and harder to find, though, and don't forget that this set up means it may be a long time before you see any money from record sales. The upside of this kind of deal, apart from easing your cashflow concerns upfront, is that the distributor will get a better price from the manufacturer than you could on your own, because they are likely to have a standing relationship with them.
     
   • You simply arrange for manufacturing yourself. Usually a manufacturer will not extend credit to a new customer, so you're likely to have to pay for the whole order up front.
     
   • You skip manufacturing completely and go for a completely digital release.
     
   Obviously, going all digital is the cheapest way to go since it cuts out this cost. If you do decide to press physical copies, try to keep your spending in check. In other words, special packaging, colored vinyl and things like that may be fun, but they also jack up your costs. A common mistake is to assume that if you shell out extra for these kinds of bells and whistles that your album will sell more. Probably not. "Oooh...cool" doesn't pay the bills, and nifty packaging isn't what is standing between you and stardom. Another thing to keep in mind in terms of pressing costs is being smart about how many copies you manufacture. Sure, you'll get a better per unit price for larger orders, but it's a good idea to press what you think you realistically have a chance of selling. Pressing 500,000 copies to save 30 cents per unit is a false economy if 499,500 end up sitting in your mom's garage. Want to be really depressed? Open your credit card bill while looking at a 250 boxes of unsold CDs.
   
3. Promotion: Promotion is your most important cost. If manufacturing and recording are "save" expenses, promotion is your area to splurge. Promotion costs are campaigns to earn radio/press coverage of your release and advertising costs. You can save money by doing your press and radio promotion yourself, or you can hire a PR company. As a general rule of thumb, it is more difficult to break into commercial radio without the help of an established radio promoter than it is handle print/web promotion yourself - something to keep in mind if you only have money for one such "pro" campaign.
   On the other hand, don't expect PR companies to work miracles. Is radio a good fit for your release? Is your audience listening to the radio? The key to spending wisely on promotion is to know your audience and make sure you're targeting them.
   

So, bottom line, how much is it going to cost to release your album? In many ways, the answer is up to you. The expenses listed above will all need to be met, but there is a lot of wiggle room within each category. The key is to take a long term view and spend enough to give this project the push it deserves while making sure you don't set yourself so far back financially that you don't have any cash leftover for a follow up.