Whether you’re a new artist or an established one, it’s important to know what you’re getting into when signing a recording contract. A good contract will protect your interests and ensure that you receive royalties for the music you create and release, but the opposite is also true: if the terms aren’t set up correctly in your favor then you could end up losing money while your song is still on the charts. The following sections will discuss some of these issues in more detail so that you can decide whether or not this type of agreement is right for you.
Basic contract terms
A recording contract is an agreement between a record company and an artist. It outlines the terms of their working relationship, including compensation and royalties paid to the artist for their work.
A basic contract should include:
- The name of both parties involved in the agreement (you and your record label)
- A description of what services are being provided by each party (your music being recorded)
- How much money will be paid for those services (royalties)
How to negotiate a recording contract
The first step in negotiating a recording contract is to know what you want. This may seem obvious, but it’s important to be specific about your goals and objectives. For example, if one of your primary goals is to get paid more money at the end of the recording process, then this should be reflected in your contract negotiations.
The next step involves knowing what you can get based on what has been offered by the label or publisher involved in the deal. If they are offering an advance against royalties (AR), then find out how much that amount would be before agreeing to anything else regarding terms and conditions of payment for recordings produced under this agreement. You should also try asking about advances on mechanical royalties if applicable; these payments could come later down the line after sales have begun generating income from physical copies sold through stores like iTunes or Amazon Music Store – so don’t forget about them!
Publishing rights are the rights to the song, but they aren’t the same as copyright. If you’re a songwriter, you own your publishing and can license it to any company that wants to use your music in their projects. When people refer to “publishing,” they mean two things: 1) ownership of musical compositions; and 2) collecting royalties generated by those compositions (or recordings).
Your publishing company will collect money from record labels that use songs on their albums or movies that use songs in their soundtracks; they’ll also collect money from TV shows and commercials featuring songs written by members of their roster–and then split this revenue with those artists based on an agreed-upon percentage rate determined before any work begins on a project.*
Recording and marketing budgets
Recording and marketing budgets are a major consideration when selecting a recording contract. You should have an idea of how much money you’ll need to record, promote, and tour your album before signing with any label.
The following costs are included in the recording budget:
- Studio time (the cost of renting out expensive studios)
- Producer fees (the amount paid to producers)
The following costs are included in the marketing budget:
Producers and writers credits
The producer credit and payment are two separate things. The producer’s role is to help guide the artist through the recording process, often by choosing session players and songs, providing feedback on song arrangements and instrumentation, etc.
The amount of money paid to a producer varies widely depending on his/her experience level (beginner or seasoned), whether he/she has worked with your label before and what kind of deal you’ve negotiated with them (i.e., flat fee vs royalties).
This can be negotiated during contract negotiations so that there’s no surprises later down the line!
Other terms and conditions you should consider in a recording contract
- What happens in the event of bankruptcy?
- How do you get your masters back?
- What can be done if you want to terminate your contract early?
Be sure you understand your contract before signing.
You should read your contract carefully, and ask questions if you don’t understand something. If the recording company won’t explain it to you in plain English, get a lawyer to look over the contract before signing anything. And never sign anything that you don’t understand.
If you’re a new artist, it can be overwhelming to try and understand all of these terms and conditions. It is important that you have someone who is experienced in negotiating contracts help guide you through the process.