What Record Companies Want

The deal should be this: both sides will make a success. That means, essentially, both will make a profit. Now here, it must be understood that the record company is taking some risk. It will be spending quite a bit of money on getting your music to market. Consider what is involved, and thus what has to be paid for: studio time; sound engineer; producer; mixing engineer; mastering engineer – and this is just for starters, not even one CD has been produced yet.
Meanwhile there is CD package design; photographer; layout; sleeve notes; mock-up artwork; credits; rights’ clearance (on cover versions); catalogue registration, and so forth. Again, not even one CD has been manufactured yet, but all of these pre-production costs have to be catered for. When the CD printing starts, there are more costs – the casings, the discs, the wrapping. And then there is warehousing and storage and distribution and administration, and launch and press & media interviews and posters and advertsing and marketing and… phew! And not a single sale, yet.
There are other types of contracts – say, for example, you have recorded the CD yourself and just need a company to do the distribution; in other words, you are looking for a route-to-market. But right now we are just taking a high-level peek at the contractual process from the beginning.
The point is that your recording contract is going to make provision for the recoupment of these costs. It is, after all, fair?
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