Guide to Recording Agreements
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View Sample Recording ContractRecording agreements are often the main source of revenue for an artist. They allow the a more substantial exploitation of their talent. Indeed, without recordings, there would be limited opportunities for songwriters and music publishers to exploit their songs.
Independent record companies can be distinguished from majors in many regards
The factors amounting to the characteristic differences between majors and indies
The contractual differences resulting from those factors
Majors are obviously much larger than indies. The latter have a limited number of staff and very often the communication will be directly between the company owner and the artist, whereas artists signed with majors have as main interlocutor, the A&R man and the artistic director.
Once an artist breaks, majors are more likely to have the resources to exploit the opportunities fully. They can fund more expensive videos and more substantial marketing campaigns, including TV advertising. Majors can usually co-ordinate international campaigns more effectively.
Major labels have a high number of artists who all want to be promoted. They are lead to put forth more efforts on one or two "promising" artists rather than giving each of them equal importance. Independent labels, not confronted to the same degree to theses obligations, can devote more time and energy to the few artists they've signed.
Record companies invest much more than indies. The amount of money put at risk is much more substantial so they have interest in making sure that this will be compensated by the profit generated by the records exploitation
The artistic director or A&R man in a major is accountable to the hierarchy (Managing Director or Financial Director) to secure immediate chart success rather than allowing a gradual artistic growth.
The owner of an indie is often in charge of the artistic work and therefore can give the artist more time and artistic freedom without this pressure.
Independent record companies are in general terms much more flexible than majors. This can be verified in the contracts negotiation which is close to a partnership between the parties.
The artist retains greater artistic and creative control with indies. Majors prefer controlling certain elements of the creative process via their artistic director or A&R man
Artists signed with independent labels can enjoy a very high royalty rate in comparison with the one fixed by majors (around 50%).
Major labels tend to impose the recording of at least 5 albums, obligation which is very seldom imposed by indies, which are often satisfied with a one-album commitment.
With their limited financial resources, independent labels prefer not to exploit the work worldwide and therefore restrict recording agreements to just a few countries, whereas majors expect artists to sign for the whole world, as they a considerable worldwide influence.
Indies usually give the artist a share of the "net receipts" (50%), whereas majors calculate the remuneration on the basis of a percentage of the price of units sold.
When the artist is successful, hell be more likely to be better remunerated by a major than an independent label. Even without success, he is guaranteed more security by means of a considerable advance payment which is not reimbursable. The artists financial situation with an indie is much more uncertain in that regard.
MAIN CLAUSES OF A RECORDING AGREEMENT (WITH A MAJOR)
The contractual negotiation and obligations stemming from an indie / artist relationship is very flexible, as we have seen earlier. It would consequently a utopia to present a general contractual practice and claim its accuracy.
As far as contracts with major record labels are concerned, common trends can be found even though all contracts are negotiated (if not, they should certainly be negotiated) between both parties lawyers. Companies policy changes along with time, artists claims for emancipation (e.g., more freedom), court judgements (interdiction of forced labour), technological and socio-economic evolution (e.g., internet and online distribution, democratisation of music around the world)
OBJECT OF THE RECORDING CONTRACT
The record company is to exploit the rights in performances contained in a sound recording, via:
THE ARTISTS CONSENT TO THE RECORDING CONTRACT
RIGHTS GRANTED TO THE RECORD COMPANY
The right in sound recordings is assigned to the record company if the latter did not itself own the rights in the first place (by carrying out the production)
Independent producers can ask to be paid out of the artists royalties
ACCEPTABILITY OF RECORDINGS
A record company may require the right to refuse recordings if they are not "technically suitable". Considerations of commercial suitability should be avoided.
BANDS AND LEAVING MEMBER
In case of departure of a band member, the record company may give him/her the option to terminate the agreement.
The artist usually commits him/herself to:
ACCOUNTS AND AUDITING
TERMINATION OF THE CONTRACT
View Sample Recording Contract