- 5 Things to look for in a Record Deal
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- The Pursuit Of A Record Deal
- SOUND ON SOUND
The label may also need to be the bad guy in the room who tells the artist they can do better! This will include PR, plugging to radio and streaming services, more proactive social media activity, and possibly advertising in media, on billboards, on social and on the streaming platforms. If there is going to be a physical release, this includes organising and paying for CDs or vinyl to be pressed, and getting them into shops and to the mail order sites. It also means getting those recordings into all the digital channels, and trying to drive maximum sales and streams.
A good label will also be looking for opportunities to drive more revenue, such as getting a track on a compilation or key streaming service playlist, or synchronised into a TV show, movie, video game or advert ie sync deals. The record company usually provides all of this for free. Which is nice of it! But what do labels want in return? Under a classic record deal, the two main things the label wants are exclusivity and ownership of any sound recording copyrights created under the deal.
As the label is the copyright owner, it — rather than the artist — will license third parties who want to copy, distribute, adapt, perform or communicate the tracks and collect the money. Whether or not an artist will have a right to consultation about or a veto over any new licensing deal will depend on their record contract.
That contract will also set out how any income is then shared between the label and the artist.
5 Things to look for in a Record Deal
Under a major label deal, the record company will get to keep most of the money. Every deal is different, and all this needs to be set out in a written agreement. But, despite all these potential issues, for many artists the label model basically works. The artist gets investment, plus creative, commercial and marketing support, just when they need it to help them take their own business up to the next level.
That inevitably means giving up some of the control and — when it comes to the recordings released by the label — a lot of the money. And if and when the label profits from the deal, it commits to reinvest some of that money back into the next big thing. In that situation, the artist and their manager has to decide which label will make the best business partner. Major labels are those owned by one of the three major global music rights groups: Universal Music, Sony Music and Warner Music.
The indies are everyone else. There are pros and cons with signing to major v indie labels, or to a big v a small independent. Some terms last as little as 30 days for rolling distribution. When a company takes on more risk by providing funding, marketing support, physical distribution, or radio promotion, deals tend to last longer, ranging from 24 months on the low end to life of copyright on the high end. Perpetuity deals give labels a Perpetual Grant to release, administer, own or co-own , and profit from a song or project until the world ends, aka until the copyright expires, and they are unfortunately still common practice.
Generally, artists can do whatever they want with advances — aka a Discretionary resource.
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Some use that money to fund tours. Others cop mansions. Think of them as your future earnings. If the label expects you to generate X dollars over the course of the deal term, they can afford to provide a portion of X early to cover important costs.
The Pursuit Of A Record Deal
Additionally, Direct Costs costs required to create, distribute, and market your master recordings also tend to come out of gross receipts before artists see their royalty rate take effect. Conversely, Net Profit Splits , which you might find at indies and streaming labels, offer an alternative, with both company and creator splitting costs evenly.
Only after all costs recoup will either side see profit. Consider this the tip of the iceberg of things to consider when signing a record deal.
Record deal standards still largely reflect old realities the risks of manufacturing physicals, the costs of international distribution, vinyl breakage, a monopolized chokehold on different promotional platforms. They read like tree rings, fossilizing the legal and financial realities of a different era.
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When those words regularly reflect all that has changed — marginal distribution costs, plummeting costs of production, globalized streaming — artists will emerge in control, as they should be. Share Tweet.
Whether the artist already has a track record of music sales and streams Whether the artist has co-signs from notable writers, producers, artists, etc. Keep scrolling for deeper dives.
SOUND ON SOUND
Territory : All the places a music company can distribute, market, and profit from your work. This can define how long an album has to be. Advances : Lump sums of money usually cash given to an artist when they sign a record deal aka Execution , marking the start, or Commencement , of the Initial Period, or when they begin a subsequent project period, marketing the start of an Option.
Usually, in addition to cash advances, labels will establish these dedicated resource pools to cover the costs of making and promoting music. Artist Royalties : Your cut of revenue from streams, downloads, CDs, etc. Royalty rates can vary by territory e. Industry legalese for sales is Exploitations , btw. Need more caffeine yet?