Independent Deals
by Ben McLane, Esq.
In today's rapidly changing music business, major labels are hesitant to sign new,
unproven acts to their rosters. However, do not be disheartened; a major label deal
is only one avenue to obtain mass exposure for a musical artist. This article will
explain some alternatives to signing a recording contract with a major label.
Independent Labels. These labels tend to specialize in a particular style of music and
obviously have smaller rosters. This can work to the artist's benefit because the act
should receive more attention. Also, an independent will usually have some form of
distribution in place, which is necessary to put records in stores. Many independents
have become successful subsidiaries of major labels, which has provided them with
major label distribution.
Distribution Deals. Here, the artist delivers to a record company an agreed amount
of completed product (e.g., compact discs). Then, the label will distribute the product
to stores. Sometimes, the label will also market and promote the product. Otherwise,
this duty is left to the act. For its services, the label will collect a percentage
of the selling price of the record.
Production Deals. In this type of deal, the artist signs on with a production company
(usually headed by an established producer). These deals are normally structured like
a regular recording agreement. In essence, the producer will record the act's music
and then attempt to obtain a deal with a record label. If the production company is
successful in procuring a deal, the royalty paid by the record company to the production
company on records sold will be divided between the production company and the artist.
Pressing and Distribution Deals (P&D Deals). In this situation, the artist delivers
a fully mixed master and finished artwork to the record label, which in turn manufactures
and distributes the records. One advantage of this kind of deal is that the artist should
be able to obtain a higher royalty on sales because the act has already paid for the
costs of recording the product.
Since it seems that major labels prefer to see what the public responds to before making
a large financial commitment, many artists are considering independent labels, distribution
deals, production deals, and P&D deals in order to prove that they do appeal to a record
buying audience. As a warning, some of the operations listed above can be suspect.
Thus, an artist should make sure that any deal made is with a reputable entity/person.
Copyright 1998, Ben McLane
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