What an Artist Should Know About Record Deal?

One of the most important decisions a new act must make is whether to sign a recording contract. If you are lucky enough to be offered a deal with a major record label, you may think, “I’ve finally made it!” But have you? The answer depends on a number of factors.

When the music industry was in its infancy, countless artists got taken by unscrupulous companies or individuals. Unfortunately, many of these artists sold the rights to their music outright just for a new car or for very little consideration, only to find out later that they had lost out on millions of dollars. When you think about the money that is made by the re-release of old recordings on CD, you can see that the music companies further increased their earnings with no little or no money going to the original artists.

Thank goodness those days are over for the most part. Artists are much better informed now, but getting good deal still isn’t a sure thing. In fact, just because you get a record deal doesn’t mean that you’re going to make a whole lot of money.

Deal Point for a Major Record

major record label is any label that garners a very large percentage of all annual sales of records and that has its own distribution system. The Big 5 record labels are Universal, EMI, BMG, Warner, and Sony, and the distribution companies are WEA, BMG, Sony, UMVG, and EMD. Also, each of these Big 5 has a number of smaller labels that they have either affiliated with or acquired through the years.

Most artists and bands will be very lucky to even be considered for a major record deal, much less get one. Even if you do, the terms probably won’t be that appealing unless you generate such a strong buzz in the music business that the record labels start a bidding war against each other. You will quickly find out that the record label has all of the negotiating power and that you have next to none. Record companies are in the business of making money, and to do that, they don’t get themselves into bad deals.

Options

The one and six deal is the most prevalent type of offer you will see. This means that the record company will only guarantee to release one record, with the option to release up to six more, depending on how well the records sell over the term of the contract. (You may also see a one and eight deal.) The option to release more than one record is solely at the discretion of the label.

Sometimes, if artists can show a depth of material and a proven track record of sales, either by themselves or with an independent label, the record label may promise to release two records with the rest subject to their option, but that is quite rare. Obviously a two and six is most advisable, because if your first record loses money and you get dropped, getting another major record label to pick you up is next to impossible. It does happen, but very rarely.

Also, sometimes an act can get dropped before its first record is even put out, so watch out for any terms that could allow the record company to do that. It’s always a very good idea to be totally prepared before you go looking for a major record deal. The more depth of material, experience, and marketability you have, the better the deal you will be offered.

Number of Releases

If the record company decides to pick up your options, it’s going to make sure that you put out a record every so often. In fact, you could be required to put out a new record almost every single year. This means that as soon as you put out your first record, you will immediately need to go on tour to promote it. Then you need to write and record your second record in a very short time, possibly while you are still touring. Make sure you’re not forced to put out an inferior second record due to time constraints. Don’t fall prey to the sophomore jinx.

On the flipside of that coin, you may not be able to put out your second record for a very long time because the record label has other interests it wants to pursue. More specifically, the label may want to put it time, money, and energy toward other artists, or similar artists on other labels may be releasing their records.

The best way to avoid the sophomore jinx is to be as prepared as you can and have at least two records’ worth of material before you even look for a record deal. As for what the label decides to do about any of your options, you are pretty much out of luck. The label’s going to do what it feels is best, and there just isn’t much you can do about it. If the record company decides to drop you, you will have to go back to square one.

You should ask how many records the label releases per year. You don’t want to sign with a label that releases too many records, because it will have only so much time, money, and energy to put into the marketing and promotion of those records. You don’t want to get lost among a lot of other records put out by the label that month, that quarter, or even that year.