With the internet being the modern playground, most labels ask for a worldwide license, often even specified as broad as the universe. A sideman’s clause allows an artist to do studio work. By the purest industry definition, an independent label is a record label that is not affiliated in any way with a Major Label, and uses independent distributors and/or digital distribution methods to get their releases into stores, both online and into the traditional brick and mortar music retailers. Also, ownership of your website URLs may also be a point of negotiation. How If the release does well, we have the rights to exercise the option and the artist is committed to sending us all his new music first, exclusively. If the label has an affiliated Music Publishing division, and wants part of your publishing, don’t be surprised, but be sure your attorney protects as much of your publishing royalties as possible. Royalties are accrued through the money earned by music in any way – downloads, streams, CDs, vinyl, licenses for music in TV programmes or films, compilations, soundtracks or even MiniDisc sales should you be going back to the 1990s to release your album. (As of 2010, 9 cents per song, per unit sold.) Good phrasing is along the lines of ‘label will make any monies owed to artist payable within 30 days upon receipt of a valid invoice, to be sent to [email protected] or postal address as specified above‘. If you have a sideman’s clause in your contract, make sure all members of your band sign the document. Find out how much you get paid for each record sold. In many respects, today’s record contract is much the same as yesterday’s record record contract even in this “streaming-first” music landscape. Who pays for what: deals can differ on who pays for what or what the split of expenses is – for example you may want to employ your own publicity agent or to be flown by helicopter everywhere you go. Please be advised that should any such contract ever come your way, never sign anything without consulting your entertainment law attorney. As for caps, 2 per single, 5 per EP and 12 for an album are OK – however then you must make sure to not exceed these limits when delivering your records. This is usually a recording of a song, the master right, but it can incorporate a variety of other products, such as music videos and merchandise. Note: For an in depth article on the types of relationships that exist between independent labels and major labels see the chapter I co-wrote with entertainment law attorney Bartley F. Day in the excellent resource book The Musicians Business and Legal Guide, 4th Edition, published by Prentice Hall. If an artist cannot get funding or the marketing muscle they need without the help of a record label, then having to deal with the terms in a 360° record contract may simply be the business proposition the artist will have to decide on. Calculating the Advance . (The Big 4 distribution companies currently are: WEA, SONY/BMG, UNIVERSAL, and EMI. Starting a Music Business A recording contract (commonly called a record contract or record deal) is a legal agreement between a record label and a recording artist (or group), where the artist makes a record (or series of records) for the label to sell and promote. The label will need a degree of control over your sound recording copyright (read: master recording) to be able to exploit it; to sell, distribute, promote, license and such. by Christopher Knab - Fourfront Deals with exclusivity over a certain period are usually worded in such a way, that an artist is exclusively bound to the label until the committed products or options have been released. The following information is provided to you as a basic outline to the key parts of a recording contract. How the label will pay mechanical royalties. Get the best of our production tips and news, weekly in your inbox. In return, the artist agrees to give the label a cut of all their revenue streams. By offering more money up front, they ask for higher reductions in artist and mechanical royalty rates. If the relationship is a failure it can often mean the ruin of an artistic career. For 1.000 copies of a 6 minute single, the label pays $105 (1.000 * 6 * $0,0175). In that case, should you put out a 6 track EP, they only owe you mechanical over 5. By industry definition, a major label is a label that commands a high percentage of the annual sales of records, and has their own distribution system.