The different contracts in the music industry
The artist contract
Also referred to as exclusive recording, it unites the artist with his producer, responsible for the production, manufacturing, distribution and promotion of the project, and becomes the owner of the soundtracks. The artist receives compensation called royalties, generally between 5% and 15% of sales.
The artist therefore has no legal structure, he is therefore anything but autonomous in this situation. He becomes like an “employee” of the label, so this has several disadvantages :
- Most of the remuneration goes to the record company,
- He is contractually linked to the record company for several projects.
- He does not always have the last word on various subjects: selection of clips, choice of single to highlight, etc.
- He does not keep the catalog once his contract ends, having only access to the copyright.
Of course, these aspects vary depending on the working methods of the teams within the label. Some will leave the artist at the heart of artistic decisions, while others will prioritize their strategy and artistic vision.
Signing as an artist also has important advantages :
- You are involved in several projects, thus benefiting from substantial budgets per project.
- The label can afford not to be profitable on the first project by investing massively in communication to make subsequent projects profitable.
- A team of experts, made up of often very qualified people, surrounds you and advises you to achieve a common objective: to make you one of the new stars of the current scene.
Despite what we hear, we must not forget that nothing beats a team with experience and a network.
The label will maximize its network, thus providing you with enormous advantages : playlist entry, media coverage, participation in festivals, etc.
The artist is paid for his studio sessions and clips, which in most cases ensures intermittency, guaranteeing a regular salary.
The license agreement
This unites a producer (record company or label) with a company (belonging to the artist or his team or both). The producer finances the manufacturing, production, promotion and distribution. With this contract, the artist receives between 20% and 30% royalties from sales and retains ownership of his recordings.
In this scenario, the artist remains relatively independent: he has his own structure, retains ownership of his soundtracks, and can make his artistic choices as he sees fit.
The contract binds the artist to several projects, offering him various advantages: a substantial investment per project (for the same reasons as the artist contract), a team of experts at his disposal, advantages linked to the label's network ( less important than those of an artist contract but not negligible), financial independence with an advance managed according to your preferences with your team...
Of course, this contract also has its disadvantages: the team is often less extensive and less involved than on the artist contract, it is linked in the medium or long term with the label, and the artist obtains a lower percentage than if he were independent...
The distribution contract
The artist's company partners with a distribution company responsible for marketing the records in stores and distributing the sounds on streaming platforms.
It's the most independent contract that exists (this is what artists like JUL, PNL, etc. have signed).
The artist's company keeps on average 80% of the revenue from streaming and CD sales.
The advantages are numerous: the artist and his team receive an advance and can organize their strategy as they wish: distribution between the clips, the studio, etc. is completely free. However, certain constraints on the number of sounds or clips to be produced may be imposed.
In addition, the soundtracks belong to the artist's company and the distribution contracts are generally short-term (around 3 years for a “classic” contract).
The disadvantages are also numerous: the services offered by the label are often weak and the team made available to you is made up of few people in charge of numerous projects. You are almost completely independent, with the significant chance of having a carefully planned distribution (putting in playlist, putting on shelves if CD sales, etc.) and an advance to organize and implement your own strategy.
To conclude
It is certainly beautiful to dream of total independence, but if you do not yet have teams experienced enough to develop your project, it is sometimes better to make the concession of earning less and being more supported than to try independence and to take several years before finding your professional bearings.
Many artists started with an artist contract and then set up their own structure, this is the case of: Damso, Nino, Vald…
Avoid prejudice at all costs and find out from the right people before making your decision on which contract you will choose. A good decision could save you several years of work... so don't rush.