Music Contracts 101: Exploring Recording Contracts
by: Ty Cohen
In the music industry, there is an insane amount of variety in the types of music contracts out there. If you are thinking of busting into the music industry, then it is a good idea to explore the business side of it. You need to educate yourself on the types and legalities of music business contracts before hopping in.
First, recording contracts are arrangements between the artist and the label. This is where the artist makes a record and the label sells it. Once recording contracts are signed with the label, the company will own all rights, copyrights, to that record. More often than not, the artist is unable to record or perform under any other label.
An exception to the above rule is under something termed as a distribution deal. This is where someone else, meaning you or your manage for example, owns the copyright but the album is licensed to the label for a set period of time which will be stated under the terms of the music business contracts.
You may choose to include an opt-out clause in music contracts. This mainly states that if the popularity of an artist decreases or they fail to sell records then they can be dropped. This can be great for a record company but ultimately not so great for the artist. It protects the company but also encourages the artist to perform and produce at the highest levels.
The following items are what you will find inside recording contracts: definitions, terms and commitments, exclusivity, grant of rights and copyrights. You may also see sections such as, advancements, royalties, recording costs, publishing, group provisions, creative control and cost control. Lastly, music contracts may contain; tour support, equipment, producers, accounting, promotional terms, miscellaneous and a line to sign on. Music business contracts are complex but educating yourself with the basics your first step in the right direction.