Is A Record Deal Really, Really Necessary?

Is A Record Deal Really, Really Necessary?

"Please listen to my demo" " How you get a record deal?". These were common sentiments of the late 80's and 90's. When you look at the era, it makes perfect sense. Larger than life videos and a 24hr music channel exposed the world to the lavish and exciting lives of musicians and performers.

It was "Rock n' Roll all night and party everyday". It all seemed so easy too, sign your name on the dotted line and enter a world of "Champagne, caviar and bubble baths".

At the beginning and end of every music video, in the bottom left hand corner, right after the song title and the band name, was the name of the record company.

The record labels had become as famous as the artists they signed. The question is, in 2013 is a record deal still necessary???

For those that don't know the nuts and bolts of recording contracts, lemme break it down. It's ultimately a loan that the record company gives a recording act to cover the cost of recording, promoting and distributing their album.

Some contracts are for multiple albums, which can either be an advantage or a disadvantage to the act depending on the circumstances. Normally, the artist and their manager would negotiate an advance, which is an upfront sum of money given to them based on the projected success of the record, or to sweeten the pot.

Often times, artists are so dazzled by the advance, that they don't pay attention to the points. Points also called royalties, are the percentage of record sales the artist is paid.

The points range about $0.08 per unit (album) sold for new artists, and anywhere from $0.10 to $0.15 per unit sold for established acts.

It is standard industry practices for the record company to own part of the publishing rights of the music. Meaning they get paid any and every time the music is performed or played (and in some cases hummed).

They can even license or lease the music to other performers for them to record, and the don't need the artists permission. They also own the master recordings for 10 to 20 years give or take, which prevents the artist from licensing or re-releasing (as in a best of) their own music.

A savvy artist would try to gain as much control of their product as possible. Remember the number 1 rule of contracts, EVERYTHING is negotiable.

Now it gets a little tricky right here so follow me closely. They way the contract reads, the artist gets 90% of the total album sales. But out of that 90% the label has to recoup (be reimbursed) the cost of recording, marketing, promoting and distributing the album, as well as the advance money (the initial loan) and any incidentals.

Not to mention the label has to recoup all promo tour costs, the cost of a stylist and a publicist, attorney fees and let us not forget the manager gets 10%. All of this is before the artist sees one thin dime. But hold up a second, because you haven't heard the piano part yet.

If the album doesn't sell enough for the label to recoup, the artist is indebted to the record label for the balance. So then the label has the option to shelve the artist, meaning prevent them from recording or releasing any material, for umpteen years.

Or the label can release the artist from the contract and they get nothing. Or, they can give the artist a budget for another album, that would hopefully sell enough to cover the previous amount owed, plus the current amount.

The label can (and quite often do) garnish the artists royalties in lieu of repayment. If you think about it, it's a lot like one of those predatory payday loans.

But all is not lost you see, the artist has an option themselves. With a stroke of luck and shrewd management, they can arrange for another label to buy the contract.

Of course this will render the artist indebted to the new label for the old debt, in addition to what they owe for recording a new album with the new label. Kinda explains how so many entertainers go bankrupt huh?

If you have read this far you may be saying F#&% THAT!!! You'd be right to say it too, especially in this day and age. Once upon a time, recording and promoting an album would cost millions of dollars.

Part of that bloated price was paying the salary of an A&R (artist and repertoire) rep, who is essentially a middle man between the artist and the label head.

Granted without some very gifted A&R's who found talent, cultivated them, put them in the studio, secured producers and basically oversaw projects from top to bottom, we wouldn't have many of the great artists and albums we have today.

However most labels have seen fit to eliminate the A&R position altogether. Truthfully, if you take the time to learn your craft inside and out and really think and plot out how you want your audience to see and receive you, then an A&R person is someone you can afford to do without.

This cost cutting measure combined with current technology and the advent of social media has reduced the financials of recording and promoting from millions to thousands. Of course, that might still be quite a bit for the average independent artist, but it's not nearly as unattainable.

You're still gonna have to cough up the 10% for management though, because representation is invaluable and a must.

Then you have the exorbitant cost of distribution. At one point, labels would take 25% off the top to pay for packaging and 10% for damaged copies, this is prior to calculating the price of distribution.

Would you believe they even had the gall to charge the artist 100% of the cost of  all unsold copies.

When the music format switched from vinyl and cassette to compact disc, the price to produce and distribute the actual hard copy drastically dropped for the company but not the artist.

The labels would still take the 25% and 10% fees. These days most people listen to music on their phone or computer. Therefore, distribution, while there is still a market for hard copies, isn't really required. Unfortunately they still take the 25% packaging fee, charging it to bandwidth digital rights and transaction fees.

If you know the song please sing along with me. "Industry rule number four thousand and eighty, record company people are shadyyyyyyy!"

Let us now examine this unscrupulous rule of the record company owning the artist's master recordings. Through the 50's 60's 70's and 80's, music was recorded on huge extremely expensive reels.

Since the label foot the bill for them, it made sense that they would claim ownership.

However, since 2000, recording is done to hard disks (for all intents and purposes a CD), or onto hard drives. Both, as I'm sure you know, are very affordable.

Even back in the early 90's the format went from reels to the vastly cheaper ADAT (pretty much a VHS tape). So, why in James Brown's name would an artist let a label own their creativity and expression? I don't know why, do you?

I can never say too much about publishing (the system of collecting money for the playing or performance of musical works). Publishing and performing live, are the bread and butter of your musical career.

You can have the best song in the world, but who's gonna buy it if they've never heard of it or you? Nobody, that's who! That's why getting it played on the radio has always been so important.

Back in the day, a musician couldn't get their works published without first having them played on the radio. And, they couldn't get them played on the radio without first having them published.

Yes, you did indeed read that right. The first 22 artists that fell for this is probably where they got the phrase Catch 22.

Coincidentally (yeah right), record labels already had publishing companies. Songs would wind up published under the name of the record label, entitling them to receive partial compensation along with the writer and producer (the only ones who deserve to be compensated).

Which in-turn made the artists dependent on them in order to have the music played at all.  This was/is systematic of the unholy relationship between record companies and radio stations (but that's another article).

Anyway, today for a musician to get a publishing company is easy as a point and click. Publishing determines the royalties you receive, i.e. gettin’ paid, so publishing is your #1 priority. Gitcha $$$$$ mane!

There have always been independent labels and artist, but it seems major labels have spent the last 20 or so years conning artists into believing a record deal was necessary.

When downloading and file sharing bum rushed the door, record labels were caught with their pants down. They didn't know how to handle it and couldn't afford to compete with it. It seemed as if this was the stone that would slay Goliath and make way for the era of the independent artist to take control.

Somehow the major label monster held on and was able to adapt, and now charge and even prosecute people for doing what used to be free and not illegal. Surprisingly record deals continue to be highly sought after. Just so you know, the change in times has caused the recording contract to change structure.

Nowadays they have what's called a 360 deal, where the label owns your name, likeness, image and your music, and takes a portion of every cent you earn, including from endorsements and film roles.

In exchange for covering the cost of the same recording and promoting you could conceivably do yourself, and an advance most times, is much less than the average annual salary. Of course, that's only after you get a few thousand downloads and or a couple million YouTube views on your own.

Now that you see that getting a record deal means you could likely owe the record company more than you have, and more than you may ever get, is it worth it? It might be. How successful do you think you could be?

After you answer that question, ask yourself if you have the money and motivation to make and record your own music? Will you be able to promote, distribute and manage yourself?

Do you have the connections to get your music out to the public? If you do, then maybe you don't need a deal.

If not, acquiring a record deal might be your best option. But with a little determination and  a whole lot of perseverance, it is possible to do it yourself and not be indebted to anyone.

Know and understand that the choice is yours, and that you can be a success either way. Or not.

Randall Irwin The First

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