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How to understand music contracts to avoid getting screwed

What's the Deal? You don't want to get screwed

All musicians at some point will need to sign a contract with a music producer, label, publisher, or some other source for the advancement of their careers. The problem with that is when you’re new you probably have never seen a contract before because you’re focused on creativity.

Now, because you have never seen a contract you don’t know its basic terms or terminology to grasp an understanding of what will unfold in front of you. Secondly, you may not even have an attorney. This is quite nerve-racking because there’s money on the line that you, in some cases, may desperately need!

This is the one thing I hate about the music industry when it comes to the saying “There’s no school for this” because on the one hand, the main industry tool of choice is the contract, and in this industry, nearly 90% of all newcomers don't know how to look for its most basic terms and most will never know throughout their entire careers.

The reason why this channel is so successful is because I took the time to truly understand music contracts to a pretty high degree. Though some things change here and there most of it stays quite the same. You don't just explain this stuff with ease after 20 years so let’s hop in!

Contracts are all about give and take

Contracts are all about give and take. You're going to be asked to do something in exchange for what you want (a record deal, an advance, etc.). That's why it's important to know what you're giving up and what you’ll get in return.

  • Is this contract too restrictive and what clauses make it that way?

  • Is the contract flexible enough to allow for future changes in your career?

  • Does it cover all the details or does it leave anything out?

You may be willing to change your sound a bit for the sake of getting more exposure or promotion from the label, but make sure that doesn't mean giving up too much creative control over your music. This is why we must move on to the next section, Copyrights.

The 6 rights of copyright

Copyright is what you will always be exchanging for a means of value in this industry. Copyright law is the legal right of creators and publishers to protect their work. It gives you exclusive rights over your own creative work and allows you to profit from it. In general, these rights are:

  • Reproduction (copying)

  • Distribution (selling)

  • Public Performance (playing or broadcasting in public)

  • Public display (displaying publicly)

In addition, there are a few special cases:

  • Derivative works (remixes or sequels), which can be protected even if they're based on another person's copyrighted work.

  • Digital Performace (the digital transmission of a master song recording), this is the case where your sound recordings are simulcasted on web versions of terrestrial radio stations like iHeart radio, and with cable tv music channels like Music Choice, Dash Radio, and Stingray music. Also, any other webcast radio station that pays royalties to SoundExchange

Once you understand your copyrights then you can effectively move into the contract with a bit more understanding.

Basic parts of a contract

A music contract has three main purposes:

  1. To establish a business relationship between two parties

  2. To define the rights and responsibilities of each party

  3. To determine how profits are shared

In the case of music, we need to examine this and take a deeper look at the basic parts you need to be aware of.

Purpose - Is this a producer agreement, an artist agreement, a publishing admin agreement? You'll usually find this listed at the top of the page. If not you've got a janky situation on your hands

Exclusivity - Will this agreement be exclusive to this company or will it be non-exclusive so I can move about the chess board freely?

Territory - What county and or territory will this agreement be upheld in, the US only or worldwide?

Term - How long will this binding agreement last?

Rights Granted - What rights of the 6 copyrights do I need to grant to the other party under this agreement? Is it reproduction rights or any and all copyrights?

Advances - Will I be advanced on the future sales revenue of the product upon signing?

Royalties - What is my cut of the sales of the product?

Warranties - Does this agreement require that I'm currently not in any other agreements with other companies?

Clearly, there are more that should be addressed but you will find all of these clauses in any contract across the board.

When to hire an attorney

If there is a lot of money involved, if you are not confident in your ability to negotiate, or if you have questions about the contract, it might be time to contact an attorney. An attorney can help you better understand your rights and obligations as an artist. You should also hire an attorney when there is a dispute over payments that were not made on time or according to the terms of your agreement but beware hiring an attorney when you're in a rush is going to cost you more money and time for waiting.

Where do I start?

How do I find an attorney? In short, Linked in and industry mixers and conferences but go watch my video How to Find the Right Lawyer for Your Record Label

Can I do this by myself without an attorney? Sure you can but you better make sure you know what you're signing and keep a signed copy on file to give to your attorney later if a dispute arises.

What if I already signed but am having second thoughts? Hire an attorney and ask them to help you find an exit in the contract or one where you will have to create a breach. Breaching may cost you but at least you're out. Think Kanye.

Get Busy

Take the time to educate yourself on the parts of a basic Label, Producer, and Publishing admin agreement because you're will see those all the time throughout your music career.

If you need further assistance you can always book a call with me on the site.

At the end of the day

You will have a better chance of succeeding under the contracts you sign if you understand what you're signing. Of course, this success depends on the people that will be executing this agreement, but at least you get to sleep well at night knowing that the contract was meant for you. I don't think I have to tell you signing any agreement before reading can lead you nowhere fast or put you in a position you don't want to be in. This is how most people come out bitter about the music industry. Take your time to learn this side.

All in all...

you stated this thing off right in this series and you'll be able to build on the foundation that you have going forward with the proper legal instruments and team.


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