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How to Sign Yourself to your own record label | Sign Yourself to Yourself




Every artist fantasizes about signing themselves to their own record label. However, 96% of artists don’t even know what it means. There are two key pillars to this structure that must be understood. While some of this may be confusing if you don’t understand business, don’t worry—you’ll understand by the end of this blog if this method is right for you.


Ludacris - Tell it Like It Is (Release Therapy)

"Open a bank account quick and then follow these steps

Sign yourself to yourself and start signin’ ya own checks"


Services

The first thing we need to get control over is your exclusive services. In many cases, your services will be requested by any party who requires a task from you, and it is your job to protect yourself while doing these services and retain ownership of those services. Services should be loaned out from you, and no company should have entitlement to your labor as an independent contractor.


Loan Out Deal - Sign Yourself to Yourself

This is the core component of signing yourself to yourself. It requires that you set up an LLC just for the services you will provide to the company for payment. This way, your services will not remain exclusive to the purchasing company; they will remain exclusive to you and your new LLC. This provides a buffer between you and the other company.


Insurance - The Inducement Letter

Because you, the artist, have no direct deal with the major label, they will want insurance to ensure you will do for your company what you said you would do for the services. They will ask for this insurance through an inducement letter stating you will give a Personal Guarantee (PG) for financial responsibility of the service fee if your company does not perform the services agreed upon.


Intellectual Property

The second thing we need to address is the intellectual property you create with those services. Your intellectual property should be owned by your company and licensed for use in order for the intellectual property to be returned to you after use.


Advancing Your License

Typically, this model is chosen to gain an advance on IP sales in order to further other vertices in your operation. However, payment terms on the license should not be subject to royalty repayment only; they should be subject to direct repayments as well. The latter takes true negotiation skills, but it provides you with autonomy to regain your independence quickly.


Owning Your Masters Under License

Typically, your Record Label LLC will own your masters that you create and allow the record company to borrow the rights to monetize the masters for a set term, usually 10-15 years, but mostly 10 nowadays. They will advance you for that time period, and it is on them to promote the recordings to recoup the promotional budget back and the advance revenue they paid you out of your percentage. If all of this is done within 10 years, your artist royalty opens up, and after 10 years, the master ownership reverts back to your LLC. Lastly, unless you are on bad terms with your label, it may be in your best interest to allow the label to offer you administrative services to keep the gravy train going.


Do I Need to Sign Myself to Myself if I’m Independent?

In the case of recording services, no. In the case of other high-paying labor services, yes!


At Which Point Would You Do This?

When labor requests are over $10,000.


Why Does Every Artist Fantasize Over This?

  1. It sounds sexy to artists that don’t know how it works.

  2. It works pretty well for artists who know how to use this system.




Check This Out!

If you're a music creative or executive looking to build your label or publishing company in 60 days or less, with a step-by-step foolproof process, grab the 60 Day Record Label Course and get it done today! You’ll gain the ability to get real funding, avoid contractual pitfalls, and keep the middleman out of your pockets. Click the link below to get started now! If you’re skeptical, grab the free guide, "10 Ways to Increase Your Record Label Profits," which comes with a free split sheet download.


If You Utilize the Loan-Out System

You’ll increase your autonomy and allow yourself to benefit from your career much more efficiently. This allows you to make a quicker exit in some cases while continuing to create even better music and enjoying your career.


If You Don’t Utilize the Loan-Out System

You are at risk of being used and abused easily in the entertainment industry.


Conclusion

If you wanted to know how to sign yourself to yourself, now you know how! By following these steps, you’ll gain greater control over your career, protect your intellectual property, and ensure you’re properly compensated for your work. This approach empowers you to operate independently and strategically within the music industry.

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