One of the quickest ways to grow as a recording artist is by getting a record label. If you are interested in songwriting, being a musician or working with a band, then you have probably heard of record labels too many times. The question that most aspiring artists always ask is: “What is a record label and how does it work?”
Defining Record Label
A record label, also called a recording contract or record deal is defined as a legally binding agreement between a record label and a recording artist or group. In this agreement, the artist is supposed to make a record or many records, and the label sells it or promotes it. When an artist is under this kind of contract, they are only allowed to work with the recording label exclusively. In most instances, the label gets a percentage of the sales that the record makes.
How They Invest in Artists
Most of the time, when labels approach artists, they anticipate a symbiotic relationship where they invest their money on producing records with the artists while hoping that they will make money from the sales of the records. This means that they always pick an artist who has shown a lot of potential. The record label always covers the following areas:
- Advance payment: This payment is given to the artist to bond them to the contract and get them ready for the recording.
- Recording payment: As the name suggests, it is given during the recording stage.
- Video production: After the recording, the artist is given payment to work on video production.
- Tours and marketing: One of the ways to publicise the recording is by going for tours and shows. Record labels always put a payment down for it, anticipating good sales.
- Promotion and marketing: promoting and marketing the record takes a big chunk of the payment.
What You Should Know About Record Labels
When you are an artist, and a record label approaches you, consider it as a calculated risk. They are telling you that they are taking a chance on you with hopes that you will yield good returns. This should not put too much pressure on you. The reality is that the music industry is saturated and everyone is trying to break even. You may not get the gains that you had hoped for. It says nothing about your capability as an artist, and even recording labels know that as long as they are taking risks, they will not always win all.
Copyrights and Royalties
In most instances, the labels will own the copyrights of the records that the artists make. They will also take the master copies of the records. There are instances when the artist maintains the copyright, and the label takes a distribution deal. The first label deal artists get may not always give the most money, but subsequent ones get better based on the success of the first.
What to Do Before Signing to a Record Label
Always bear in mind that a record label is a legally binding agreement, and once you sign against the dotted lines, you cannot go against it. This is why you should do due diligence and ensure that you are satisfied and you understand what is in it for both you and the label before you sign.
- Involve a lawyer: Since it is a legal document, it will be written in legalese that you may not be able to see through. Take the copy to a lawyer and have them interpret it to you in layman’s language so that you know what is expected of you.
- Discuss with every member if you are a band: There have been cases where band members disagree or have a major fall out when individual members start feeling shortchanged by the contract. Every band must have a discussion on what every member is entitled to, and how they are bound by the contract.
- Ask about every little detail: The temptation to accept any label that comes your way can be overwhelming, especially if it is your first one. You should make sure that you understand issues of copyright, royalties, and payment.