Learn how to understand and negotiate the key aspects of recording contracts, such as the type of deal, the scope and duration, the compensation and royalties, and the creative control and ownership.

Term: Success may be tied to how much a label prioritizes and invests in an artist's projects. Therefore, artists should avoid long-term deals with small, unproven companies with questionable resources. Promotion & Marketing: It is not standard in record contracts, but more artists should tear a page from other industries by including in their deals marketing commitments on the part of the label, and information reporting to help the artist's team with its own PR and marketing decisions. Also, limiting the recoupability and cross-collateralization of certain costs against artist royalties is ideal. Accountability: Most recording agreements have very artist-unfriendly audit provisions. Consult with a royalty auditor to optimize these.

How can you ensure your recording contract aligns with your long-term career goals?

A recording contract is a legally binding agreement between an artist and a record label that defines the terms and conditions of their relationship, including the rights and obligations of both parties, the scope and duration of the deal, the compensation and royalties, and the creative control and ownership of the music. Signing a recording contract can be a major milestone in your music career, but it can also have a significant impact on your long-term goals and aspirations. Therefore, it is crucial that you understand what you are agreeing to, and how it aligns with your vision and values as an artist. In this article, we will discuss some key aspects of recording contracts that you should pay attention to, and how you can negotiate them to protect your interests and achieve your career goals.

1 Know your worth

Before you enter into any negotiations with a record label, you need to have a clear idea of your worth as an artist, and what you can offer to them. This means knowing your fan base, your market potential, your artistic identity, and your career trajectory. You also need to research the record label, their reputation, their roster, their resources, and their expectations. By doing this, you can assess how well you fit with their vision and values, and how much leverage you have in the negotiation process. You can also use this information to set realistic and reasonable goals for yourself, and to avoid underselling or overselling yourself.

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Simon M. Eder

Music, Media & Culture Executive and Start-up Co-founder (acquired by Apple) with a passion for branding, marketing & communications. Currently Out of Office and in the Skies.
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Also try to understand the recording industry as much as possible - do you want to be in control of you catalogue in the long term? are you interested and keen to understand how to work with your catalogue in terms of monetization or do you prefer it to be handled through a label.

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2 Understand the deal

A recording contract can take many forms, depending on the level of investment and risk that the record label is willing to take on you as an artist. For instance, a standard deal involves the label paying for production, distribution, and promotion of your music, while recouping their expenses from your royalties. In this arrangement, the label typically owns master recordings and has final say on creative decisions. Alternatively, a 360 deal pays for production, distribution, and promotion of your music while also recouping expenses from other sources of income such as touring, merchandising, publishing, and endorsements. The label may or may not own master recordings and have final say on creative decisions. Finally, a licensing deal pays for distribution and promotion of your music while paying a fixed fee or a percentage of gross sales. In this arrangement, you usually own master recordings and have more creative control and freedom. Each type of deal has its advantages and drawbacks - it is important to understand the implications and consequences of each before deciding which is best for you in terms of rights, obligations, income, expenses, and career opportunities.

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3 Negotiate the terms

Negotiating a recording contract can be complex and challenging, so it is important to understand the type of deal you are offered. Pay attention to the scope and duration of the contract, the compensation and royalties, and the creative control and ownership. Aim for a contract that allows you enough time and space to develop your artistic vision, provides a fair share of revenue, and respects your artistic integrity. If you feel uncomfortable or unsure about any aspect of the deal, it is advisable to seek professional advice from a lawyer, manager, or agent who can help protect your interests. Ultimately, never sign a contract that contradicts or undermines your long-term career goals.

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Cedar Boschan

Forensic Accountant & Expert Witness ⚖️ Damages, Royalties, Audits & Valuation
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Term: Success may be tied to how much a label prioritizes and invests in an artist's projects. Therefore, artists should avoid long-term deals with small, unproven companies with questionable resources. Promotion & Marketing: It is not standard in record contracts, but more artists should tear a page from other industries by including in their deals marketing commitments on the part of the label, and information reporting to help the artist's team with its own PR and marketing decisions. Also, limiting the recoupability and cross-collateralization of certain costs against artist royalties is ideal. Accountability: Most recording agreements have very artist-unfriendly audit provisions. Consult with a royalty auditor to optimize these.

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Simon M. Eder

Music, Media & Culture Executive and Start-up Co-founder (acquired by Apple) with a passion for branding, marketing & communications. Currently Out of Office and in the Skies.
Report contribution
Be aware that the contract you receive is very likely a standard contract in favor of the labels interest. Ideally you outline key aspects that are important for you at the very beginning together with your manager and/or lawyer. (and yes, and makes sense to have legal advise on such matters) draft a memo with key points, ideally the contract is based on these memo points in a next step.

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4 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How can you ensure your recording contract aligns with your long-term career goals?

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1 Know your worth

2 Understand the deal

3 Negotiate the terms

4 Here’s what else to consider

Music Industry

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