Tips Every Artist Must Know Before Signing Their First Record Deal

Hey! You made it; a record label has offered you what seems like a deal of a lifetime because they’ve recognized your talent. But before you sign the dotted line, make sure you actually understand what you are agreeing to so your dreams don’t turn into a nightmare.

Here are some tips on what to consider before you sign your first contract.

Contracts with more than a year lasting term

Generally, the initial length of a recording contract is one year and can improve consequently afterward with several option periods where the record label can choose to renew your contract for an additional time period if they like the body of work you are producing.

By limiting the length of your contract by a year, you dissuade the record label from controlling your life and your creative work for an unreasonable amount of time.

You never know where your career will take you, and it’s important to keep your options open. A lot of record labels have locked their artists in five- and even- ten years long term contracts that destroy their artists’ creative lives and financial futures.

Make sure you get a release commitment

Without a release commitment from the record label, you have no guarantee they would actually put in the work to get your album produced, packaged, and distributed to the public.

A regular release commitment is a guarantee from the record label to release at least one album during your contract term. If you record the necessary songs for an album and they refuse to put it out, you should then be free to walk away

Reasonable Royalty Rates

The royalty rates differ, depending on the artist’s success and fame. For unknown new artists with little to no notoriety, it’s within 5 – 10 percent and up and coming to get as much as 10 – 14 percent while seasoned artists bring in as much as 18 percent in royalties.

In most cases, record labels offer new artists a 1-2 percent royalty rate as an industry standard which is just not true. They also offer the artist huge signing bonuses giving them an illusion of success ensuring that the record label – not the artist reaps the long term benefits of artistic success.

Be Careful of hidden royalty deductions

Even if an artist is given reasonable royalty rates, artists should still keep an eye out for hidden royalty deductions. Before paying you any royalty, the record label is allowed to recoup much of its expenses through “deductions” which includes recording cost, video production cost, and other similar costs.

Some record labels still sneak in enormous royalty deductions that basically guarantees you will never receive a royalty payment.

It’s always a good idea to hire a qualified counsel to review the record labels proposed contract before signing any record deal.

But with the tips shared above, you should be able to discern if the record label is trying to squeeze every penny out of your artistic abilities.

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