Musicians: Here's what to look for before signing a contract with a label

Musicians: Here's what to look for before signing a contract with a label

Monzerrath Ortiz
 | 

Most artists dream about receiving a record contract, longing for the moment they are approached by a well-dressed executive handing them a small card with their contact information to discuss a potential deal. 

 

It’s their ticket to the Chocolate Factory. Gleaming with enthusiasm and adrenaline, instinct may drive them to jump at the opportunity.  

 

A record deal can be a game-changer, after all, it’s generally viewed as marking a positive turning point in a musical career. 

 

However, there are several crucial details to consider before signing on the dotted line-- details that can significantly impact your rights, earnings, and future as an artist. 

 

Red flags from the get-go 

 

A record contract serves as a legal agreement between an artist or group and a label intent on setting the terms of the sale and promotion of their music. 

 

In the early stages of receiving a record contract, these are a few red flags to look out for:

 
  1. Fee-for-service contract structure: Under a fee-for-service model, you are required to pay for the services that a label offers, such as recording, management, and promotion. At first glance, this may seem like a good deal; after all, a record deal is a record deal, and more freedom may be promised to you under this model. However, it is risky for two key reasons:  it offers less accountability from labels, and it is a common music industry scam. This type of contract is a red flag-- a legitimate record label will never charge you upfront in exchange for representation.

  2. Rushed negotiation: Rushing into any type of contract is a risk-- whether it’s for a job, housing, or in this case a record deal. Contracts should also be navigated alongside an experienced lawyer, who can offer their expertise and avoid ambiguous contractual terms. Taking time to negotiate and strategize the content of a contract can determine your creative freedom, ownership rights, release commitments, royalty rates, and much more. 

  3. Long commitment period: Record labels typically demand long-term exclusivity over an artist. From the perspective of a musician, the appeal of a long contract is stability and consistent representation. Nonetheless, a long commitment can force artists into contractual agreements they may no longer agree with after a set amount of time; additionally, dropping the label becomes that much more difficult under a contract lasting more than five or ten years. 

  4. Creative control: Being required to give up full creative control in a contract is not beneficial to an artist; not only does it prevent them from retaining their ability to decide their style/sound, it subjects them to the image the label wants to cultivate (often one that is based on profitability).  Thus, part of the negotiation process should include discussing the record company’s level of creative control. 

 

After confirming the legitimacy of the record label and their offer, the next step is to thoroughly read the fine print and negotiate. For this, having an attorney is especially necessary. 

 

Sections you may want to focus on during negotiations: 

 
  • Royalty rates: This is one of the most important aspects of a record deal. Royalty rates determine the percentage of profit an artist can expect to receive from music sales, streams, and other distributions of their intellectual property. 

  • Distribution of other revenues: For musicians, revenue is not limited to one source; merchandise, performances, and promotional campaigns are all opportunities to generate profit. Similar to royalties, musicians should review and negotiate their share of such revenues. 

  • Types of benefits being offered: A good contract will ensure you are also gaining from label representation and its network in the music industry. Ask yourself: how is the label investing in my growth? What is the access to recording studios like? What kinds of promotional campaigns and strategies do they have planned? 

 

How a lawyer can help you:

 

Only an attorney can help you navigate a record contract and protect your best interests during the negotiation process; not consulting with an attorney means dealing with the ramifications on the longevity and success of your music career. 

 

A recent example of the importance of a legal counsel for negotiating contracts is the Taylor Swift masters controversy involving Big Machine Records. Quick recap in case you were not aware: Taylor Swift’s first six albums recorded under Big Machine Records were sold twice, both times without her authorization. Today, she has no artistic or financial control over those albums. 

 

This story is ultimately tied to the intricacies and limitations of record contracts and copyright law. Contracts offered by predatory executives that go unchecked result in a higher risk of an artist will be exploited and losing control/rights over their own content. 

 

This can be avoided. 

 

How? By hiring a lawyer. For a comprehensive analysis and negotiation of a contract, your best bet is to hire a qualified entertainment attorney. 

 

An experienced lawyer can verify the fairness of your contract and signficantly increase your level of protection against record labels, many notorious for prioritizing revenue and control over your rights as a musician.

 

LawChamps is here to advocate your legal rights. To be matched with an attorney today, visit us here


This article is intended to convey generally useful information only and does not constitute legal advice. Any opinions expressed are solely those of the author, not Law Champs.


 
Monzerrath Ortiz

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