smoothrhythm
New member
Rules of thumb that you must remember when you are going to sign a recording contract. Your contract must include the following information.
(1) What percentage of the sale of each record goes to the artist?
In underground situations where the label has virtually no expenditures besides manufacturing costs, 50/50 splits of the profit (total income - total expenditure) sometimes happen. With more developed "normal" labels, percentages of the retail or wholesale price are specified (12%-25%), minus "standard packaging deductions", minus expenditures. Also specified is a rate at which the mechanical royalties will be paid by the label to the artist.
(2) How much of an advance on those earnings to give?
If the advance exceeds the eventual income of the record, the artist is not required to pay any money back. However, any further records done for the label will have to pay back that amount before paying the artist further money (though they may receive another advance). Many labels are capable of precisely guessing how much money will be earned. The advance is also the method used by big labels to convince naive artists that they've hit the big time, and then give them a poor deal elsewhere, or keep them in debt to the label. They never see money after that. Note that the advance is usually the figure that
hits the magazines.
(3) When will payments and accounting happen?
You should get regular reports with exact figures. Anything else is shady.
(4) What if the artist is retained exclusively by the label?
I most music situations, exclusivity is desired by the label. These days it is usually seen as a good thing to allow the artist to work elsewhere, as that further publicizes their career, which can only be good for any sales by that artist. Sometimes a project name is chosen that exclusively records for that label. If you sign a contract with a label in the state of California and its for three years or two records or more the label by law is obligated to pay each band member a minimum of $9,000 per year if they want to keep you around, or its not exclusive. This is not an advance, it is money that they straight out pay you! Apparently it favors major labels who can afford to hold an artist like that. Any indie label can't come up with the money, and the major if interested can usually get the srtist in question without further wrestling.
(5) What if the tracks in question are granted exclusively to the label?
Usually the tracks are exclusive to that release. Any future releases of the tracks are licensed by the label to whatever other label is going to use them. (Ex Cd Compilations)
(6) How many releases is the artist bound to?
In some cases just that release. "options" mean that it is the label's option to do further releases with the srtist, but if they wish to then they can drop the artist. This can be a problem if the artist is unknown, signs a deal for several albums, and then does really well on the first or second. There is no chance then to renegotiate the terms of the contract, they are fixed. So you would actually wish to get less albums or just a single release deal.
(7) In the event that any of the tracks are licensed to another party, the share of profits from that are specified.
Usually 50/50% minus any expendituers
Hollllllaaaaaa😀
(1) What percentage of the sale of each record goes to the artist?
In underground situations where the label has virtually no expenditures besides manufacturing costs, 50/50 splits of the profit (total income - total expenditure) sometimes happen. With more developed "normal" labels, percentages of the retail or wholesale price are specified (12%-25%), minus "standard packaging deductions", minus expenditures. Also specified is a rate at which the mechanical royalties will be paid by the label to the artist.
(2) How much of an advance on those earnings to give?
If the advance exceeds the eventual income of the record, the artist is not required to pay any money back. However, any further records done for the label will have to pay back that amount before paying the artist further money (though they may receive another advance). Many labels are capable of precisely guessing how much money will be earned. The advance is also the method used by big labels to convince naive artists that they've hit the big time, and then give them a poor deal elsewhere, or keep them in debt to the label. They never see money after that. Note that the advance is usually the figure that
hits the magazines.
(3) When will payments and accounting happen?
You should get regular reports with exact figures. Anything else is shady.
(4) What if the artist is retained exclusively by the label?
I most music situations, exclusivity is desired by the label. These days it is usually seen as a good thing to allow the artist to work elsewhere, as that further publicizes their career, which can only be good for any sales by that artist. Sometimes a project name is chosen that exclusively records for that label. If you sign a contract with a label in the state of California and its for three years or two records or more the label by law is obligated to pay each band member a minimum of $9,000 per year if they want to keep you around, or its not exclusive. This is not an advance, it is money that they straight out pay you! Apparently it favors major labels who can afford to hold an artist like that. Any indie label can't come up with the money, and the major if interested can usually get the srtist in question without further wrestling.
(5) What if the tracks in question are granted exclusively to the label?
Usually the tracks are exclusive to that release. Any future releases of the tracks are licensed by the label to whatever other label is going to use them. (Ex Cd Compilations)
(6) How many releases is the artist bound to?
In some cases just that release. "options" mean that it is the label's option to do further releases with the srtist, but if they wish to then they can drop the artist. This can be a problem if the artist is unknown, signs a deal for several albums, and then does really well on the first or second. There is no chance then to renegotiate the terms of the contract, they are fixed. So you would actually wish to get less albums or just a single release deal.
(7) In the event that any of the tracks are licensed to another party, the share of profits from that are specified.
Usually 50/50% minus any expendituers
Hollllllaaaaaa😀