Talent 2k - Talent2k.com (2000)

Getting a record deal.

(PRWEB) February 9, 2005 -- It is my experience that most musicians think they want a record deal, but know nothing about these ominous 80 --100 page, single-spaced recording contracts. Recording contracts are legally binding agreements between individuals who make up a band and a corporation.

In previous columns, I have given a lot of information about how the music business works, and what an independent artist or band must do to establish their careers. Record labels are attracted to acts that have built a strong following and have proved to the industry that they are a solid investment. When a record label signs an act to a recording contract, they expect to make a substantial return on the financial investment they have made in that act.

The following information is provided to you as a basic outline to the key parts of a recording contract. Please be advised that should any such contract ever come your way, never sign anything without consulting your entertainment law attorney.

Indie Label VS Major Label

Indie Label (See Also, Major Label)

By the purest industry definition, an independent label is a record label that is not affiliated in any way with a Major Label, and uses independent distributors to get their releases into stores.

Note: For an in depth article on the types of relationships that exist between independent labels and major labels see the chapter I co-wrote with entertainment law attorney Bartley F. Day in the excellent resource book The Musicians Business and Legal Guide, 3rd Edition, published by Prentice Hall. When you think about pursuing an independent record label deal, think about the following issues:

Distribution

Make sure the label has a solid distribution deal on a national level. Be sure to check on the relationship between the label and their distributor(s). Ask some questions like:

- How many records has the distributor sold of the labels product?

- Did the label have any problems getting paid by their distributor?

- What kind of working relationship do they have with their distributors on their new releases?

- Does the label have a budget to pay for some co-op ads, and in-store promotions through their distributor?

Roster

Make sure the labels roster isnt too big, or else you wont be given the attention you deserve. Also, make sure the bands on the roster match the type of music you play.

Publishing

If the label has an affiliated Music Publishing division, and wants part of your publishing, dont be surprised, but be sure your attorney protects as much of your publishing royalties as possible. Never allow a label to recoup any monies advanced to you for the recording of your record from your mechanical royalties. (This is the money owed to the songwriter and music publisher of the songs you wrote on your record, for the sales of your record.)

Options

Find out how many options the label wants. Since options = number of records," you dont want to agree on too many options.

Indie Promoters and/or In-House Staff

Find out if the label works with independent radio and/or retail promoters. Its a good sign when they do; this raises the chances that your record will be seriously and effectively promoted.

Tour Support

Find out if and how they support you on your tour (financially, morally, etc.) and how much of any advances for touring are recoupable.

Point/Percentage of the List Price You Receive

Find out how much you get paid for each record sold. A new act usually gets somewhere between 10-15% of the suggested list price of a recording. (Remember too that out of your percentage, you must pay your producer their percentage, for producing your record.)

Major Label

By industry definition, a major label is a label that commands a high percentage of the annual sales of records, and has their own distribution system. ( The Big 5 distribution companies currently are: WEA, BMG, SONY, UMVG, and EMD.) When pursuing a major label deal be absolutely sure that this is what you really want. Here are some points that might help you determine if this is the right thing for you to do:

Options

A major label often signs artists for six to eight records (not years).

A&R

Research the A&R person. Know whom theyve signed, who theyve worked with, who theyve worked for, and how long they have been employed.

Number Of Releases

Find out how many records the label releases per year. You dont want to sign with a label that releases too many records. Remember, they only have so much time and enthusiasm to put into the promotion of each record. Many major labels have between 12-25 releases coming out each month.

Here are some clauses that you will encounter (and sometimes have to watch out for) in a contract with a record label:

Exclusivity

Every record contract includes a provision stating that the deal is exclusive." In other words, during the term of the agreement, you cant make records for anybody else. Therefore, an exclusivity clause in a contract refers to the fact that you may only contract with this record company (you are unilaterally married" to that company.) I strongly recommend that your attorney define the extent of exclusivity.

Term

The duration of the contract. (How many records? Any time constraints?)

Product/Creativity

Who will control the amount of product and the quality of the product? You always want as much creative freedom as possible; the record company often maintains a veto power when letting a band choose the producer, engineer, studio, etc.

Recording Costs

How much (recoupable) recording money will you get? Dont overdo it! Remember, you will have to pay it back from your royalty rate as applied to actual sales.

Advances

How much (living) money will you get that is recoupable? What about other advances, such as videos, and touring? Remember, you will have to pay back that amount to the label.

Royalties

The money paid for your service as recording artists. Outside of U.S. is calculated differently. (Canada: 75--90 % / UK, Japan, Australia: 60--70 % / Rest of the world: 50 %--of U.S. rate).

Video

Who controls the music video and how the costs are apportioned. Try to have only 50% of the cost recoupable.

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