Record Labels

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RECORD LABEL Get Signed! Now!

Also called a "label," it is an enterprise whose business activities may include:

1) Acquiring the rights to material (e.g., songs, master records, videos, etc.),
2) Locating and signing talent,
3) Securing mechanical licenses,
4) Producing master recordings,
5) Manufacturing end-user commercial recordings,
6) Releasing end-user commercial recordings,
7) Promotion,
8) Distribution,
9) Sub-publishing,
10) Publicity,
11) Public relations,
12) Accounting for royalties collected,
13) Reporting to the IRS on Form 1099--MISC certain royalties, independent contractor fees, salaries, commissions, interests, rents, pensions, medical assistance programs or health, accident, and sickness insurance programs, certain direct sales of consumer products for resale, and other compensations paid out. Each recipient is reported separately and the report must include the recipient's name, address, taxpayer identification number (social security number for sole proprietorships), and the total paid,
14) Paying the required employment and other taxes to the proper agencies, and
15) Distributing the proper royalty payments, accompanied by a royalty statement.

Record companies may be large (majors or minors) or small. Small record companies have limited release objectives and capabilities.

The rights appropriated by the record company from the artist are defined by written document. This document, called a recording contract, contains many clauses because it covers a wide range of agreement.

Record labels are best categorized by listing them with regard to…
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Q. How Do I Start-Up and Run a Record Label?

A-1. Read the 12 Magic Bullet Seminars to give you a step-by-step detailed overview of the entire music industry which will get you started…
| SMP - The Magic Bullet Seminars |

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A-5. Then familiarize yourself with the related contractual agreements…
| TMBIO - Contracts | TMBIO - Contract--A Closer Look |
| TMBIO - Songwriter/Publisher Contract - How to Negotiate - 48 Clauses Outlined |
| Copyright Assignment Agreement -- Form Contract Purchase Online |
| Mechanical Licensing Agreement -- Form Contract Purchase Online |
| Master Recording Production Agreement -- Form Contract Purchase Online |
| TMBIO - Production Deal | TMBIO - Production Costs | TMBIO - Production Contract |
| TMBIO - Recording Contract - How to Negotiate - 58 Clauses Outlined | TMBIO - Record Deal |
| Recording Contract -- Form Contract Purchase Online |

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Purchase Music Form Contracts Online

Here is an Example Excerpt
From the TMBIO Site Discussion on the Recording Contract…

THE RECORDING CONTRACT Get Signed! Now!

A Recording Contract is a written document that outlines, identifies, describes, defines, and governs the business relationship between a recording artist (also called a royalty artist) or group, and a record company. The contract is called an executory agreement, i.e., it is an agreement that is yet to be executed or performed.

It is the business of the record company to exploit the rights they acquire with the intention of making a profit. As the proprietor of these rights they administer the related business and financial aspects concerned. The label will not usually sign an artist unless they are fairly certain the artist will engender wide and strong acceptance. This is because of the high cost (from $300,000 up) of breaking a new artist.

The type of rights appropriated by the record company from the artist are defined by the recording contract. The contract contains many clauses because it covers a wide range of agreement.

Contract Negotiation and Content

At the start, all terms of a contract are negotiable. Although it is possible for a novice artist to acquire a "fair" recording contract from an "honest" record company with his first signing--it does not always happen. Even honest record companies are going to first look out for themselves and try to negotiate a deal that is not detrimental, or potentially detrimental, to themselves. The dishonest ones, however, look out only for themselves. So, the depth of the contractee's music business experience is important. Past experience helps in negotiating fair contracts. Further, it is predominately a contractee's past track record that will establish his bargaining power. For these reasons the operation of contract bargaining between an artist and a label varies greatly.

Here then, are two points of major concern:

1) Bargaining power, and

2) The contents of the final considerations of the agreement.

Attempts at exercising bargaining power and maximizing the label's self-interests may become apparent at the outset. The artist may be asked to sign an industry form contract that is said to be "standard for everyone." He may be led to believe it is only a formality, and told in so many words that this is his "chance of a lifetime" and not to sweat the small stuff.

If the artist asks any questions or proposes changes the record company spokesperson might accuse the artist of insinuating that he (the record company representative) is dishonest. This is a ploy by the record company representative to put the artist on the defensive. This enhances the record company representative's position of strength and authority. The artist is made to feel that any objections will jeopardize the whole "deal."

Record company representatives will also exert authority by having the signing at their office. This further enhances negotiating strength via the psychological edge of being on their own turf.

Many experienced artists will ask for time to read, study, and go over the contract with their family, others who are directly or indirectly involved, and with their legal representative. This would enable a thorough understanding of the contract's content and consequences.

Other artists will hire a competent music attorney to study the contract for them and to do all the negotiations. For example, the experienced music attorney brings with him, not only experience, but clout. This would enable the negotiation of the largest advance and highest royalty rates possible. He would seek over scale wages for recording sessions. He would try to secure generous record promotion budget provisions and guarantees for concert touring, etc..

Also, having an attorney handle the negotiations would completely remove the artist from any confrontations with the record company. In this way, they are able to remain "friends" with the management of the record company while their representative hammers out the final agreement.

Legitimate record companies will respect sound business procedures implemented by an artist.

Experienced artists never …

To Read the Full Commentary on RECORDING CONTRACTS,
To Include Contract Negotiation and Clause-by-Clause Content Analysis of
The 58 Clauses Found in a Typical Recording Contract…
Join TMBIO and Go To CONTRACT-RECORDING CONTRACT

Start and Run a Record Label Online Today!

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