Types Of Record Label Contracts

 

 Types Of Record Label Contracts

Mostly new artist confuse Recording contract with Management contract. A recording contract or a record deal as it is commonly called, is a legal agreement between a record label or company and a recording artist or band, where the artist or band makes a song or series of songs exclusively for the label to sell and promote during the duration of the contract. It is basically an exchange of music rights for money.

Today we will dive in the types of record label contracts we have. Below are some of the contracts:

Music Distribution Contract

Distribution deals are deals whereby the artist provides finished recorded materials to a distribution company who then manages the process of getting the songs and products to retail stores or Digital Service Providers (DSPs). With this agreement, the owner of master recordings grants an exclusive right to distribute ‘records’ embodied in any format (compact discs, phonograph records, audio cassette tapes, digital audio tapes, DVD, etc) for a certain period of time (the Term) and in certain countries (The Territory).

360 Deals

In 360 deals, the label has a right to all forms of income the artist receives or makes, aside from the artist’s recorded music. So revenue streams like publishing, touring, endorsements, merchandise and even acting can be counted as means in which the label can recoup and earn from their signed artist or band. In addition, it’s important to note that 360-type deals have come around as the recording labels response to three major trends in the music industry in recent years:

• The steady decline of revenue from record sales
• The increase in prices of tickets to live events and fan expenditure on merchandise and
• The strengthening of the capabilities of the collecting societies and publishers getting better at their roles which translates in income from public performance and synchronisation becoming more and more significant.

 

Production Deals

A Recording and Publishing Agreement On Certain Recordings is a type of agreement under which an Artist assigns both recording and publishing rights to a label in exchange for an advance, royalties and a commitment from the label to fund and release the recordings and procure synchronization and/or performance license for the compositions. The purpose of the production agreement is to help the artist produce high-quality records and eventually sign to a major record label. It is usually offered to artists who can’t afford to produce music by themselves, and have not been offered a label deal yet. If these songs get distributed, the production entity also earns from the royalties generated by the sound recording.

Stay tuned as we bring you the other types of record label contracts next week