Understanding Record Contracts: A Guide for Artists

Fundamentally, as I said, it's about you as an artist providing recording services to the record label. The label will then tend to own the copyright in the result of those services.

Ownership Types

• License: This is sort of owning it for a period of time.
• Assignment: This is a complete transfer of ownership to the label, meaning the artist won't own it anymore.

That's the fundamentals. But then, there are a lot more things to consider.

360 Degree Deals

A lot of people have heard of 360-degree deals, or all rights or ancillary rights deals. What these really are is record labels seeking to take an interest or cut of income from artists' other income sources.

Common Income Sources

• Live Income: A percentage cut from live performances.
• Merchandising: A cut from merchandise sales.
• Publishing: Occasionally, a look at publishing as well.

Justification for 360 Deals

Record labels are essentially investors in new talent. They have the infrastructure to release recordings and are looking for a return on their investment.

So, they not only want artist recording services to create recordings but also want to secure their investment. They might say, "we also want to have something else coming from the artist," such as:

• A cut of your live income
• A cut of your merchandising

The Artist's Perspective

It won't be surprising to feel that many labels can seem quite greedy, wanting everything from the artist for little return. This brings up an important point:

Value Exchange

What is actually being taken and what value is passing either way? As an artist, you shouldn't just think:

"I just want to be signed; I'll give all these really valuable things."

Instead, consider the following:

• You can offer your recording services.
• You can agree to a cut of your live income.
• You can allow a cut of your publishing.

Think About What the Label Offers

You must also assess what the label is going to do for you as an artist. Look for:

• Commitment to Release: When will they release your recordings?
• Promotion: What kind of budget will they allocate for promotion?
• Research Their Team: Look into their distributors and press teams.

Key Negotiation Points

It's essential to get as much of this information in the record contract as possible. Many labels will boast:

"We have a great team, great distributors, great press teams, we'll make a success of it,"

but won't commit to it in writing.

Conclusion

When negotiating, think about this: If you, as an artist, are going to give all these valuable, often exclusive rights to a record label, you want reassurance that they will make the best use of these rights and collaborate with the right people.