Record Deal | Artist’s Perspective

So you just got finished ripping the stage at your local talent showcase. Mr. Record Label Executive, who was so blown away by your performance, invites you to his office the next day and offers you a recording contract right there on the spot! He’s going to make you a star!! (Okay! Rarely does this happen these days, but work with me.)  You intelligently and correctly tell him that you’ll get back to him after the contract has been reviewed by your attorney. (Although there’s a sucker born every minute you—clearly—are not one of them!)

When you do meet with your attorney, here are some key points to discuss:

1. Term: Ideally you want to limit the length of time (or the number of albums you’re committed to record) during which you’re tied to the record company.  However, if you’re successful and sell records, the label will want to keep you as an artist for as long as possible. This may not be a bad thing if you’re able to favorably renegotiate the terms of the record contract and the label continues to aggressively market and promote you as a bankable artist. However, if you’re presented a record contract from a well-funded independent record label or production company, you will definitely want to negotiate either a release guarantee that an album will actually be released within a certain period of time (usually 6-12 months after album has been delivered) or a guarantee that the production company will secure a distribution deal with either a major record label or a major independent record label within a certain period of time (usually 12-18 months) from the time you sign the contract. Otherwise, under both scenarios, it is understood that you’ll have the right to terminate the contract!

1. Advance: Record Industry Rule #1: Get as much upfront money as possible when you sign the contract!  In other words, be sure to “pimp” the label because they will surely “pimp” you.  This “Advance” is recoupable from your future royalty share and you have a better chance of getting an advance from a well funded independent label (or a major label) than a production company because most production companies will agree to pay you an advance once they’ve been able to secure distribution and funding from a major label.

1. Royalties: Obviously, you want to get as much as you can, but typically, under a production company scenario, an “all-in” royalty (which means the producer is paid out of your royalty share) of 12% – 14% of the standard retail list price is usually the norm.  Sometimes, you will be offered a 50/50 deal which seems fair, but beware of language where all third-party costs (i.e., producer’s royalty, marketing and promotion costs, etc.) are deducted from your share of the profits! That’s a straight sucker move!  However, if you’re signed to a well funded independent label or directly to a major label, your royalty can be as high as 16% and sometimes more.

1. Co-Publishing/Merchandising: Both independent labels and production companies will seek to have a co-publishing ownership interest in the songs you write. While it’s very difficult to have that language deleted from a record contract (unless you have a whole lot of leverage or are already signed to a co-publishing agreement), your attorney can try to limit the label’s interest in your songs to only those songs actually recorded and released pursuant to and during the term of the record contract. That is to say that any songs written by you for recording artists other than yourself will be solely owned by you.  With respect to merchandising (i.e., the use of your name and likeness on t-shirts, poster, etc.), in some instances, your attorney might be able to get that language deleted, but in most instances, try to negotiate a profit split that is more in your favor (i.e., 60% – 40% versus a 50% – 50% split between the label and you).

Again, this is a very brief overview of points to consider in negotiating an Exclusive

Recording Agreement from an Artist’s perspective.

1. 

   Tes Francis says:

   February 23, 2010 at 12:54 am

   Excellent. As always I enjoy reading your posts…