The dream goal of most musicians is to get an illustrious record deal from
a major recording label. But what most don't know is that record deals come
in a range options and can often be confusing for neophyte artist (and some
legends who should know better!!).
In order to forge through the music business,
knowing the types of agreements, some legal terms and insider
jargon, will certainly be a great asset when the opportunity
for that recording contracting is on the table.
Some of the music industry's deals include:
Master Buyout Deal - This
deal is ideal for music labels. In short, the label owns the
final completed project, which is called the Master and retains
the copyright ownership. The company hires a musician for
an agreed upon set fee for providing a contribution to the
musical work. The agreement includes buyout options such as
the paid artists performing and/or publishing rights plus
states the company's copyright ownership to the track as well.
It is likely that the company will offer the artist a royalty
on the sales.
There are two types of buyout deals. Most times the artist that
is offered this type of deal is signed to the label and work
exclusively with the label. As in, Whitney Houston did not
own 'I Will Always Love You,' Dolly Parton and SONY Music
do, but the late great Nippy receives a percentage of the
sales of the song. Moreover, she worked exclusively with Columbia.
Yet, the buyout can also be a 'One - off' deal. For example,
a songwriter might get paid to write a theme song for a production
company. The writer is paid for his service and the show owner
owns all the rights to the musical work and can exploit the
song freely. In a One - off deal, the hired artist is not
exclusive to the label.
Master Licensing Deal - TV
and Film companies use this agreement often. The artist owns
a song and gives a range of permissions to a company to exploit
a musical work for an agreed upon fee. The permissions can
include a rate per usage fee to terms on which mediums the
song can be used in. After the term date expires the artist
retains all the rights again.
Pressing & Distribution Deal -
The owner of a musical work with contract
with a distributor to manufacture and/or distribute such work.
The distributor is mainly providing a warehouse for the merchandise,
while some distributors use their connections with retailers
and e - commerce site to market the merchandise. This is a
non - exclusive deal and both parties are typically free to
work with third parties.
Joint Venture Deal - This
is likely the most used agreement for upcoming artist. An
artist pays a producer a certain fee for beats and studio
time plus all the outstanding costs. The producer normally
has access to a studio and owns the tracks until the producer
is reimbursed for the tracks. The goal of this deal is to
get a recording deal for the artist and/or producer. Who owns
the copyright and the split sheet percentages are set between
the artist and the producer. Depending on the terms of the
agreement the artist may or may not be exclusive to that producer.
Work For Hire Deal - An
entity is composing a musical work and commissions musicians
(and anyone contributing to the track really, even the random
person in the studio who changed ONE word) to make the composition.
The commissioner of the song typically retains the copyrights
and may give an artist a portion of performing rights or just
retain all the rights to the song. Those hired, from the guitarist
to the engineer, are paid for their services rendered and
have no ownership in the song. This deal is important for
song producer of a song because it is possible that contributors
to the track may claim the idea and ownership of the record.
Moreover, this is a nonexclusive deal and the musicians can
360 Deal - This
is the record company's new favorite standard. The company
takes a percentage of an artist record, touring, merchandise
and all of artist total sales. In exchange for giving a portion
of these sales, the label will promote, market and cross market
the artist brand on a larger scale than if the artist worked
Now that you are aware of these different
types of deal, be cognizant of the type of agreement that
you are negotiating and signing. Additionally, you do not
have to take the first deal offered. Be sure to negotiate
your terms. Moreover, know what you are talking about and
what you want to gain out of the agreement. The music industry
preys on new artists ignorance, it's a business, a ruthless
one at that, the labels goal is to make money off of artist
and their fans, so it is in the artist best interest to understand
business of the music business.