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A Look At Record Label Contracts

Oh, the record contract. The sweet and the bitter. What starts out as every band’s dream all to often becomes a nightmare. Years and years in dirty smoky clubs, playing sweat-drenched shows to four people, finally provide the basis for a record company to come along, like what they hear, and provide some actual money to the band. What’s next? The studio, of course. This can be the make or break point, however. While the goal is to emerge from the recording process with a hit record playing all over the world, too many times we see that record flop, leaving the band not only bankrupt but in debt to the same record company that recently discovered them.

And here’s where the all-important record recording contract comes into play. Perhaps more than any other music contract, these agreements may be the most complex and difficult contracts. They change drastically from band to band, label to label and situation to situation. While recording contracts often aren’t as favorable to bands as they are the labels, understanding what is included in these contracts will be extremely helpful in understanding them, whatever side you are on.

Services, Terms, Rights and Master Recordings

The first section of the contract will establish the basics of the agreement. The duration of the contract, as well as what services the artist is expected to perform during that time, is one of the most important clauses. Additionally, this section will spell out what rights the label has to the finished product after the recording is complete. Additionally, and perhaps just as importantly, this section will determine how long the label will retain the rights to the recording.

Compensation

Another section that can get very convoluted very quickly, the payment portion of the agreement will state how much the artist gets paid in what situations. Often, this will include different pay scales depending on what format the recording was sold in, and where it was sold. Also, this section will direct when the artist is to be paid.

Audio Visual

Many other stipulations will also be put into place, such as which party is responsible (and controls) any album artwork or other photography or art used for promoting the band. There also may be considerations for videos made for a song or songs from the recording. These will determine who pays for the videos and how both the artist and label will be compensated for proceeds.

Additional clauses in contracts touch on such topics as leaving members, termination conditions and the relationship of the parties, among other stipulations. Record label contracts and can be long and dense, but they don’t have to be scary if you know what you are getting yourself into, no matter which side of the contract you are on. As long as everything is clear and understood, the contract will serve as a guarantee that protects both parties’ interests.