Music Promotion for Hip Hop Artists

4 Types Of Record Deals

Filed Under (Music Business) by FuNkwoRm on 26-12-2008

Tagged Under : ,

The terms in recording contracts are always tailored and negotiated for each individual situation. So no two are alike. However, they all have a basic structure from which they build from. Even if you decide to remain an independent artist, it is imperative that you learn as much as you can about the business you are in.

 
I’ll lay out some of the most common record deals in the industry, but I advise you to always research for yourself.  The structure of these deals are changing constantly along with ever changing ways people are receiving their music.

 
Distribution Deals:
Distribution deals with a major labels, commonly referred to as P & D (pressing and distribution) deals, are usually given to artists or indie labels who have created a significant buzz for themselves.  In this agreement, the label takes on the responsibility of making the artists’ music accessible to the public by pressing and distributing it to retail stores and throughout the internet.The artist or indie label that the artist is signed to, is responsible for all other costs in a P & D deal. That includes any promotional costs, videos,  radio, posters, wardrobe…everything.

 
The artist or indie label retains ownership of the masters. The distributing label almost never pays an advance and takes 20% to 25% of the profits made from music sales.  Accounting for and retrieving your share of the profits is usually a task so make sure the contract you have with the label makes this less of problem.

 
These deals are useless to artists who don’t have the adequate financial backing nor an effective promotional plan to drive fans to their product. In other words, your CD maybe be distributed by Sony, but it will collect dust on some Walmart shelf, if you don’t know shit about running an indie label or promoting a record.

 
Artists and indies that have their street and internet grind together, find that they can do well without a distribution deal,  but this takes an extreme amount of hard work and discipline.

 
Production Deal:

Instead of being signed directly to a label, some artists sign to producers that record projects on them.  A major label then gives those producers an agreement to develop artists under their umbrella and turn over complete projects for release.  A lot of what the artists receive in a deal like this depends heavily on the aggreement between them and the producers. After the major gets it’s share, it is not uncommon for the production label to split 50/50 with the artist after recouped costs. Producers usually own the masters or share them with the label.

 
Major Label Deal:

This is the most sought after deal.  The record label pays for everything. Recording, pressing, distribution, promotion, videos…etc. They even give you a hefty advance do you can you look fly while your record is out. Who’s wants an artist on their label looking broke? No one! So you go spend that fat advance on some fly shit and maybe buy you a nice whip. The only problem is…every dime they spend has to be recouped and you have to sell a helluva lot of record to make up for. Artists seldom do. Your royalty rate, as a debut artist,  will be somewhere between 11%-15% of your music sales, and the major label almost always own the masters (even after they recoup their expenses).

 
360 deal:
The 360 deal, often referred to as the “multiple rights” deal, seem to be the future for artists agreements between them and labels. With this deal, the label gives the artists a big advance and joins with them in a kind of  “partnership”, sharing in any and all profits made by that artist.

 
With the ever increasing decline in physical CD sales, labels entered into these deals with artists to create other profitable opportunities. These profits usually include a share of touring, songwriting,  and merchandising.  The label pays for everything and basically invests in the artist as a brand that can be used as a source of advertising revenue. There is no standard structure for this deal because they have not been around for very long.

 
As with any record contract agreement, always seek the advice of a competent entertainment attorney.

Have you read these yet?

  • http://WWW.KUSHMONEYENT.COM KU$H MONEY

    THANX ALOT FOR THE MAJOR INFOE,CUZ IM BOUT TO COME WITH A NICE PLAN TO GET MY SELF AND MY LABEL HERD..THANX PIMP

  • Nyne

    well, i guess its safe to say that with me wanting to be an artist in the hip hop industry, i sure was dumb to a lot of the things that go on out there. thanx a lot for the much needed info!

  • http://myspace.com/heavygwopceo -rell

    This wuz sum good knowledge 2 kno..i appreciate that.

  • http://www.quickbeats.net FuNkwoRm

    Thanks Rell. Keep checking in.

  • azeez

    record label asking me how i want it ….? but i dnt no yet

  • mikala

    so this is why rihanna is skint, signed to a minor label who wont pay her recording fees/ music video fees ect. only that of her debut album. now to make money she has to sell and tour and when she sells she makes bare min as her label take all/most of it.

  • kaya

    Awsum news this info bro!!!

    Need this stuff…

    Thankx…

    Kaya

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