Understanding the Business of Music: A Guide for Artists

I always think that artists I know, coming from that background, are often quite hesitant about really trying to force business deals. They feel almost grateful for a record label or publisher showing any interest. However, I've seen some horrendous deals where artists will be offered something and say,

"I just want to sign this. They're a great label or a great publisher or whatever."

But you think, well, yeah, but I know from experience that sometimes you end up in a situation where you're working with someone who has a great name but isn't really helping you. You could end up just on the shelf.

It comes back to this whole Decca not signing the Beatles thing. A lot of labels will just want to ensure they own an artist they think might do well.

The Importance of the Right Deal

It is really important as an artist to make sure that you get the right deal. If the labels, publishers, or managers aren't offering what you want in return, then you need to walk away.

This is really difficult for a creative person, often, to adopt that hard-nosed business approach. But I think it's crucial.

Negotiating Contracts

One of the things that is a bit of a bugbear of mine is that a lot of contracts are issued to artists as being "standard."

A label will say,

"Here's our standard recording contract; here's our standard management agreement."

In reality, there is no such thing. There might be a template that they've started with, but everything is up for negotiation.

As an artist, you've got to really value your own rights. You've got exclusive recording services, that's a huge thing to give to anybody.

Know Your Worth

I would say if you can't be satisfied that the label is actually going to make use of those rights, then reconsider. Perhaps just walk away and say,

"If you're not willing to commit to releasing our album within six months of us delivering it to you, we're not interested. We'll find somebody else."

You have various digital distributors available now, so you could put the record out yourselves or utilize the professional team you have around you.

You could say,

"Well, we don't need a label; we just need to employ a press agent and a distributor, and we'll do it ourselves."

The power has really shifted into artists' hands, giving you the right to negotiate these terms.

Understanding Ancillary Rights

You should also look at these ancillary rights. The label might say,

"We want to cut off everything."

I saw a deal recently where the label wanted 50% of all ancillary income.

And you think,

"You've got to be joking. Frankly, no. Why would anyone be interested in doing that?"

It's almost like a 'Dragon's Den' style negotiation. You're going in and speaking to an investor, saying,

"I'm willing to give you this cut of my company, this interest in my company in return for some financial investment."

You don't go into Dragon's Den saying,

"I'll give you 50% of absolutely everything for a minuscule investment or commitment."

In conclusion, understand your rights, value your work, and always aim for a deal that benefits you as an artist.