Many artists put in a lot of hard work doing everything possible to get their name out there before they ultimately land a record deal. If that’s your story too, congratulations for catching a record label’s executive’s eye so much that they decided to offer you a deal.
Like any other contract, a record deal has different terms and conditions. These spell out both you and your record label’s rights. Generally, these are negotiable. However, once you agree to what is down on paper, you can’t break your agreement without you having to cough up some serious cash. This is why you should take the time to learn more about what terms and conditions to pay close attention to before agreeing to a record deal.
Creative control issues
As an independent artist, you’ve likely called the shots into how you market yourself, the words or themes you write lyrics about, how you compose songs and when and where you perform up until this point. In most cases, you cede control over all of those matters to your new record label’s management once you enter into a deal with them.
This is seen as the trade-off for the label’s role as it advances you money on album sales and puts in the effort to get your name out there (and your music on the radio). It should also be clear that many of these agreements have exclusivity clauses in them, allowing the record label to exercise their sole discretion about you and your likeness or work.
Your record deal will likely describe any royalties that you will receive when album or song sales occur. Most of these contracts contain an “all-in” clause meaning that your producer will also receive royalties from any cut you receive. These agreements generally also have escalation clauses, which up your percentage of royalties depending on album sales.
This section of your record deal is likely to outline deductions that your record label takes for their expenses before they pay you any royalties as well.
Why you shouldn’t go into negotiations alone
Record labels are much like any other business in that their eyes are set on making money. You’ll need to carefully consider this when reading the terms of your agreement so that you don’t get blindsided in the end.