[Editor’s Note: This article was written by Scott Ronald, editor of Guitar Gearheadz.]
There is no question that signing to a respected, successful label can bring you exposure and opportunities that are hard to achieve by yourself.
Labels can take your music and amplify its reach, exposing you to a much larger audience and plugging you into the wider infrastructure of booking agents, press and publishing/sync agencies.
However, there can be an assumption that signing to a big label is an automatic, golden ticket to success. While a label can often represent a good chance of finding success, for many acts, a record deal can end up being restrictive and limiting, sometimes even destroying bands and acts.
Having experienced some of the worst and best that a label can do, I have some understanding of what you can do to future-proof your career and ensure you sign a deal that works for you, both now and in the long run.
Here are the five things I wish I knew before I got signed that will help you in your label negotiations.
1. Understand Why (and if) You Need a Label
Gone are the days when labels would sign unknown bands off the strength of their music alone. Signing and developing an artist is costly for a label, so they need to know that an act is a worthwhile investment by looking at what they’ve already achieved.
This is an important change in the industry, because it means that by the time labels are getting in touch, an act will have likely already had some degree of independent success.
Therefore, it is crucial that acts take the time to work out what actual value a label can bring within the context of their existing success.
By way of example, let’s look at a hypothetical band – “Band B”
For Band B, a record deal would take up to 80% of the revenue they currently get from their music.
Therefore, Band B need to know that the label not only has enough clout to get them a booking agent and raise their profile within the live industry, but will also be able to amplify their sales enough to compensate for the revenue they sign away.
Of course, nothing is certain in the music industry, but by knowing this before they even enter into talks with a label, Band B are in a good position to be able to evaluate whether the label are on the same page strategically, and whether the label will be able to offer them what they need to grow.
Instead of simply signing to a label in the hopes it will boost their career, they understand exactly what boost they need and understand what a label need to do to give them that boost.
By thinking about you career objectively and working out where you need support from the industry, and where you are strong independently, you stand a much better chance of controlling your career and being successful.
2. Plan For Success
Acts can often find themselves losing out on money and control over their music in the long term.
In most cases these situations arise because acts sign deals that make sense for them as struggling artists, but not in the context of later success.
Let’s look at another hypothetical band – “Band A”.
Band A are not making much money from sales of their music. They very much need a large cash advance and marketing budget from a label. In exchange, the label gets a lifetime license on their masters, multiple options on future releases, and a percentage of publishing rights.
With the support of the label, Band A’s album ends up selling better than they could have imagined, making the label a lot of money. Since they signed for five options, their current label is able keep them when a bigger label approaches with much better terms.
Their music is used in a global soft drink advertisement for eye watering amounts of money, but since they also signed away a significant portion of their publishing rights, they lose a large amount of this cash.
Years down the line, their loyal fan base is still eager to buy reissues of their popular first few albums. However, the record label doesn’t see a lot of value in pressing enough or distributing them properly, meaning that Band A is unable to profit from their albums later down the line.
For hungry young bands that are desperate for an opportunity, it’s all too easy to sign away important rights that don’t seem significant now. By giving away too much at the beginning, many bands preclude themselves from having a long career in music due to their initial eagerness.
Never bet against yourself, and make sure you spend time with your lawyer to understand how the deal can affect your future earnings and control over your music.
3. Make Sure The Label’s Ambition Matches Your Own
When an act is courted by a label, they’ll be sold the best case scenario of what that label can do.
However, a lot of things can change an artist’s place in the label’s pecking order. Their release might coincide with a larger artist’s album cycle, or poor sales could mean there is less budget to go around. Additionally, advocates for the artist within the label, such as A&Rs, could leave their roles, meaning the artist doesn’t have internal support.
This kind of thing happens quite regularly, which is why it is important to ensure that the label is ambitious towards your music and committed to the release.
This is where advances and marketing budget can play a crucial role contractually. Advances are important in making sure that a label has enough of a vested interest in your music that they’ll need to do a good job with the release in order to recoup their investment.
The same goes for marketing costs. While some labels won’t commit an exact figure on marketing spend, it is always a good idea to make sure that the album will contractually be serviced worldwide with the appropriate press and plugging support.
By negotiating a contract that ensures the record will be released by the label with the same excitement and ambition as you put into its creation, you can make sure you’ll get the full weight of the label behind you.
4. Evaluate The Label’s Smaller Acts
As a smaller act joining a larger label, it is important to know that the label has a good track record of growing and developing their artists.
This is particularly important for major labels. While it is easier for majors to sign established acts and build them up even more, they can sometimes lack the resources and connections to build emerging acts to their full potential.
You can’t expect every act on the roster to be massively successful, but you should make sure that the lesser known acts are with good booking agents, getting good press and live shows and are obviously receiving the support they need to grow from the label.
A label with a small roster, where every act is growing and doing well, is almost always going to be a better bet than a label with a couple of huge acts and a roster full of bands not getting the backing they need.
Remember, as a smaller act, similarly sized artists on the roster are more likely to be representative of what you’ll achieve than the biggest acts. Make sure that the success the smaller acts are seeing is worth the rights and music you’re signing away.
5. Do Your Due Diligence
Even when keeping all of the above in mind, there are almost limitless ways a label can under-perform.
Perhaps the best way to make sure that a record label is the best home for you is to approach other artists (and ex-artists) on the roster and see how their experience has been.
Labels will usually be somewhat genre specific, meaning that you’ll likely run in the same circles and perform on similar line ups as other bands on the label. Don’t feel shy about reaching out to these artists to see how they’ve found their experience.
However, when doing this, remember that even the best label will struggle to keep all of its artists happy. It’s easy for artists to blame poor sales or bad reception on the label, when actually the label did a good job with the release.
Therefore, take vague testimonies with a pinch of salt.
Look for more serious and defined red flags such as the label taking away creative control over music, missing release deadlines or not paying out royalties correctly.
As well as artists on the roster, if you have the connections, it’s also a good idea to discuss it with lawyers, management companies and booking agents familiar with artists on the label. The music industry is very small and word travels fast, meaning that labels that don’t perform well will often become known for it.
By doing your due diligence, you can have a much better idea of who you’re entering into business with and make sure you don’t sign with an incompetent or exploitative label.
Keeping these five points in mind when entering negotiations with a label will give you a framework to think strategically about how signing with a label will impact your music career.
Always remember that signing with a label isn’t a miraculous ticket to success. A label needs to bring value if they are to justify the rights and potential earnings you are signing away to them.
Ultimately, it is up to you to decide what this value is and make sure that you leverage the support and resources a label brings in order to support your vision, instead of being a passive part of the process.
Scott Ronald has been an active musician for over seven years, playing everywhere from dingy basements in central Europe to some of the most prestigious venues in the UK.
He is also the editor of guitargearheadz.com, a guitar equipment comparison site that helps players pick and choose the right gear for them.