Terms You Need To Understand Before You Sign To Any Record Label. SHOWBIZ EDUCATION with Kwamina Basty ( WEEK-11 )

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Terms You need to understand before you sign to any Record Label.

These terms include:

Royalty Rates.

The number of singles to be delivered.

Whether the record company will pay for a video.

The amount of money the record company will spend on social media campaigns.

Whether the record company will also participate in the moneys earned from music publishing, merchandising and live performances

From a technical, legal standpoint a contract that is well written and contains clear and unambiguous deal terms can also be considered a good contract.

Poorly written contracts create more questions than they provide in answers. More questions means more money spent on lawyers which may mean going to court to argue the matter before a judge.

What are the benefits of long-term record contracts?

In all honesty, I do not think there are any benefits for artists in a long-term contract that requires more than three albums to be delivered.

All record contracts are structured as a series of options that are completely at the discretion of the record company. While an artist might think they have a guaranteed distributor for their music for a long period of time, in actual fact they could be dropped at any point by the record company.

A short-term contract allows artists to move to another record company upon fulfillment of the first record if they want to. Circumstances can change quickly and it’s good to keep your options open.

Circumstances can change quickly and it’s good to keep your options open.

The best case scenario is a situation where the artist builds their popularity in the marketplace over a period of two or three albums, completes the first contract and is then in a position to do another record deal while their career is on the upswing and while they have much better negotiating leverage.

What is a 360° Record contract?

As the name suggests, 360° contracts aim to cover all parts of artist income and label services.

There are generally four sources of income that an artist has:

Income from sound recordings

Income from songs that the artist composes

Income from sales of merchandise (T-shirts etc.)

Live performance income

360° contracts encompass all or most of these four elements.

A 360° contract seeks to allow the record company to receive monies from all four streams of income listed above, and ideally provides services to artists in order to maximize the monies from each of these areas of revenue.

Are 360° record contracts good for artists?

Some artists will need a large injection of money into their careers in order to get to the next level. If that’s the case, they may have no other choice but to permit an investor like a record company a more secure way, like a 360° contract, to recover that investment.

With sales of records declining and with streaming income being very small at this point in time, a record company needs better ways to secure their investment.

With sales of records declining and with streaming income being very small at this point in time, a record company needs better ways to secure their investment.

Getting a piece of the other income streams like merch and touring is one way to do it. This is why record companies seek these types of deals.

If an artist cannot get funding or the marketing muscle they need without the help of a record label, then having to deal with the terms in a 360° record contract may simply be the business proposition the artist will have to decide on.

Note: The contents of this article are not to be taken as legal advice. Always seek the counsel of an experienced entertainment attorney when signing contracts or otherwise working in the music industry

CREDIT: Mark Quail

( AUTHOR )
Nelson Nana Agyeman, popularly known as Kwamina Basty. A SONG-WRITER, BLOGGER, PUBLICIST, BROADCAST JOURNALIST ( Media Personality ).

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