Music Contracts UK-Recording Agreements

Recording 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.

The factors amounting to the characteristic differences between majors and indies

The contractual differences resulting from those factors

The company size:

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.

The financial resources to create and exploit the work:

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.

The artist roasters:

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.

The money invested in an artist:

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

Independence of the artists interlocutors:

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.

Flexibility :

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.

Artistic control :

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

Royalty rate :

Artists signed with independent labels can enjoy a very high royalty rate in comparison with the one fixed by majors (around 50%).

Duration:

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.

Territorial scope:

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.

Method of payment:

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.

Artists overall income:

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.