Recording Contracts #2

Musicians on the threshold of an exciting future are no different from sportsmen and film scriptwriters. The notion of getting a record released is too much – the same as getting to play for your hero football team, or having a film producer indicate that he is going to make your movie! In these heady moments, the business side of things is far from your thoughts. All you wanna do is sign that damn contract, before the opportunity slips away….. Bad mistake!!!
A contract is an agreement between two or more people – called parties. These parties can be natural persons, ie., human beings, or they can be juristic ‘persons’ such as companies. In Legal Structure of a Band we look at the various ways in which your band can be incorporated into a legal entity, so that it acquires a business-like status and enjoys the benefits and protection for the members and assets that are available to juristic persons like partnerships, corporations and companies. That juristic status is also available even if you are a solo performer. The point is that when it comes to that record deal that one of the majors has just slapped in your hand, it might be two corporations doing the deal – yours and theirs.
For present purposes we are going to proceed on the basis that there is, on the one hand, a “band” (however it happens to be legally structured) and the “record label” on the other hand.
Remember that a record label is not a charity institution. It is a profit-making organization, and so has the aim of making money. Its primary aim is not to make you rich; well, not directly that is. Of course, when you become rich as a result of cd or digital sales of your music, then the record label is also coining it. The point is that a record company only makes money out of the sales of music – and when that is your music, it impacts upon you and your band, and the money you will make. That’s not rocket science, is it? We have a look at the mechanisms and revenue flows in this regard a bit further below.

May we recommend that you take a little time to delve further into all of this, starting with….

Introduction to Recording Contracts

Then, you can look at:-

The Fine Print
What Record Companies Want
The Deal is in the Detail