The Formula For a Successful Record Label

The formula for operating a successful label hasn’t changed since the 1940’s and 50’s. If you’ve managed to break one act with a hit song you’ve already established a promotional route and network of promoters, club owners and booking agents so the next logical step is to break another act using the same successful formula. If done right, having multiple acts at different stages of their careers will increase your profit margin buy making you able to divide costs between the different acts i.e. product lines, and increase market share within your genre.

The formula was originally employed by Don Robey and Evleyn Johnson on Peacock Records who used the process to break and develop ats across the Chitlin’ Circuit in the United States.

“As a booking agent, I had 5 groups I staggered them out and put the best out first, a mediocre one second, a [strong] one out 3rd — thes are single engagements on the same circuit, the chitlin circuit [Promoters would] buy the first because they definitely wanted them, they buy the 2nd because they want the 3rd, they buy the 4th because they are waiting on the 5th. I kept them going. We got a rotation going where [we’d book the acts] where deejays are playing their records, and one hand scratches the other” (The Chitlin’ Circuit: And the Road to Rock ’n’ Roll by Preston Lauterbachpg 237).

Almost all of the hiphop powerhouses employed the same strategy. From Deathrow using Dr. Dre’s fame from NWA to introduce Snoop Dogg and then using Snoop to introduce Tha Dogg Pound and Nate Dogg. To Cash Money using B.G.’s stardom across I-10 to introduce the BigTymers and the Hot Boys and Cam’ron uisng his established success to introduce Jim Jones, Freaky Zeeky and Jewelz Santana and the countless Dipset individual associates and groups from Max B, Hell Rell and JR Writer. Today, Yo Gotti’s used his own regional stardom to launch and enhance MoneyBagg Yo, Glorilla and EST Gee and the countless number of supporting regional acts such as Mozzy, Black Youngsta and 42 Dugg.