At some point, if things go well and you’ve been paying close attention to this blog, you may find that a label wants to sign you up for a single release. Often, they’ll then send over a contract for you to sign. But what do all these terms mean? Everyone’s heard about ‘getting your lawyer to look over the contract’ – but in the real world, no normal person is going to get a lawyer involved for a contract that might cover 300 vinyls and a handful of digital sales. These contracts are usually pretty perfunctory anyway, but there are a few things you need to know about. So let’s take a look at some of the things you need to keep in mind as you scour that first contract!
First, there will be the ‘term’. This is how long the contract will last (or to put it another way, how long the label will own your tracks). It’s usually in perpetuity – that’s forever – which is a touch harsh, we feel. Some more progressive labels these days use a term of something like 7 years, after which you’d be free to offer the tracks for free download on your own site, for instance. If this appeals, it might be worth asking to change the contract in this respect.
Then there may be some talk of ‘an advance’. If there is, you’re lucky – the advance is an endangered species and has been very rarely seen in the wild since about 2008. An advance is exactly what it suggests; you get some of your share of the profits up front. This is, of course, re-coupable – so if you get an advance of £200, then when the money comes in, the first £200 from your side will go to the label. If the record doesn’t make that much profit, then technically you will owe the label the difference. In practice though, they can’t charge you for it. An advance is definitely a positive – it shows the label has confidence in your release, and forces them to commit to working hard to make sure it sells enough to make the money back.
The ‘option’ is very important and commonly misunderstood part of some contracts, and will usually be used in a context like ‘the option of two further singles’. This means that the if the label is happy with the release, they can exercise the option and extend the contract – thereby contracting you to deliver more singles (which they will also own). You would theoretically have no say in this. In practice, it’s usually not as sinister as it sounds, many labels wouldn’t exercise the option, and it’s usually used by labels who want to develop with an artist, rather than constantly release different artists all the time. But it’s important to check a contract to see if this clause is there, and to understand what it could mean for you. If you’re not happy with it, ask for the clause to be removed.
Most contracts will also include the phrase ‘the artist waives all moral rights’. This means that you waive your right to veto if, for instance, the label manages to get your track licensed to a cigarette advert or arms company. In practice, the number of arms companies that go around licensing underground dance tracks for their adverts is pretty much zero, and most dance tracks don’t get licensed at all, let alone by morally suspect types. But again, if this bothers you, it’s worth asking to remove it.
Publishing is occasionally mentioned in contracts, although it’s more often a separate issue. But it’s important. In short, when your track gets radio play, TV licenses, compilation use or anything like that, you’re entitled to a royalty. A publisher rounds up all these royalties, takes a cut and passes the rest on to you. Often these days, especially with medium to large record labels, a label may want to sign the publishing on the track, as well as the recording rights. That’s not necessarily a problem, but make sure you get some details on what their publishing arm is like – it should usually be ‘sub-published’ by a larger company who can handle the admin, and so on. There’s nothing wrong with signing the publishing to your label, but make sure you’re confident that they’ll do a decent job!
Lastly, there’s the issue of costs. In general, most dance music deals these days will just split the profit 50/50 after costs. That’s about as fair as it gets – so just make sure that this is what is stated in the contract. We have seen a couple of contracts that split the cash before costs, and then take the costs out of the artist’s side. This is old-school major label behavior, and not really suitable to today’s landscape. If a label tries to pull this one on you, we’d suggest you politely take your tracks elsewhere!
One thing we’ve emphasised here is that you can always ask the label to change the contract. Many people, especially newcomers to the industry, are often too shy to ask for changes to the contract, worrying that it may somehow jeopardise their release. Not so – it just shows that you’re keen to know what’s going on, and paying attention. And anyway – if your tracks are genuinely good enough, there will be plenty of other labels who’d be happy to take them on should negotiations go sour.
As you can see, most contracts are actually fairly straightforward – the legal jargon can look impenetrable but in fact it’s just wrapping up some quite simple concepts. So bear this in mind as you scan through that first contract from a new label, and don’t be afraid to get in touch with them if you don’t like the look of things. It doesn’t need a lawyer after all!
Categories: Music Industry Advice