The Key is The Songs, Not the Production Values
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How do labels handle first releases from "new" artists these days? More to the point -- do labels sign people based on demos anymore, or do they only pick up new artists who have a record recorded/mixed?
I've got a 10+ year history with many labels, tiny indies on up to quasi-majors. I've usually worked as a sidewoman, but for the last year I have been doing solo singer songwriter stuff. I've demo'd some of the songs with a well-known producer who has given me a very generous "friends" discount. My producer pal has a large chunk of time free this summer and is ready/willing/able to help me in whatever way I'd like, either finishing the demos or recording and mixing an entire record. After this summer, he is booked.
I would love to just go in with him for a week or more and make a record this summer -- it really would be a dream come true -- and then find a label to release it, but I can't afford that right now, even with the generous discount he can give me. But I also think that no label is going to pony up a few thousand bucks for me to record a debut record on such short notice.
So what do I do? Is my only option to spend the few hundred bucks it would cost to finish a 3 (or 4 or 5?) song demo and start talking to labels, knowing that I'll wind up recording with someone else, somewhere else? Or do I lower my standards and finish a full-length's worth of demo-sounding songs and then shop it around? I know what labels I'd like to work with, but I don't know whether they like demos or fully-realized first releases.
Congrats on venturing out on your own, and for doing good enough work that a talented friend is willing to help you out--it speaks to your talent or at the very least the good will you have accumulated.
What you are up against here is the fact that because of access to technology many bands and artists can make records for nearly nothing and shop them. It's certainly less of a gamble for labels, to know exactly what they are getting, to know the cost and the results and have the ability to put it out quickly. That said, your best bet here is to finish your 2-3 best songs with this producer so that labels will know what is the full produced potential is for your material. It's not worth the financial risk to go all in on the record with your producer friend. My suggestion demo the rest at home or with a friend who is handy with Pro-Tools, and work on getting another 3-4 of your very best songs in good shape with them. A good song is a good song regardless of whether there is harmonica, harp, drums and a bunch of reverb on it. Who knows, maybe one of the labels you shop it to might prefer you in stripped-down Nebraska mode. The key thing is make sure you put your best songs forward, that they are workshopped and solid and not hindered by horrible sound quality. Unless you are in a Mummies-phase and that's your thing.
Keep your initial investment to a minimum, because even if a label wants it, they may not want to shell five grand for it. In addition to shopping it around, do what you can to give your career and these songs some forward motion. Put your two best tracks online and promote them through the channels you probably are well acquainted with, try to get some reposts on the sites that matter for the kind of music you make, get some local press, make sure you are playing a show or two every month. It makes you attractive because you are not a baby that needs some handholding, you are playing out--you aren't 19 and think a label is going to put it all in motion for you. That's a good thing to play up when you are talking to labels. You are mature and connected, know what you part is and how to play it. If you are making good music, have something people want--that makes you a better prospect than most.