Exclusivity In A Small Label Recording Contract In The Modern Age

contract2.jpgBands often have me look over the contracts that they receive from small indie labels, looking to get involved with putting out their music. I am shocked at the fact that most of these contracts still look like they were drafted in 2002 when majors and large indies were still buying bands out of their small indie contracts like there was no tomorrow. Follow me to the jump and I will explain a way to alter your contract that is both beneficial to artist and label.

In the past, small indies hoped to sign artists and then be bought out of their contracts for insane prices while keeping some points on the artist for their genius discovery. While this prospect gets increasingly rare, many labels haven’t adjusted their contracts to the current climate. They ask to keep a band bound to their label for 12-48 months which not only holds potential sales back but can hold back the growth of both label and artist.

Keeping an artist in a contract for 18+ months can be like a prison term. I don’t mean to demean any label by saying this, but the music industry is moving faster than ever before and waiting around even three months to get an artist for a reasonable price becomes not worth it very fast. It is obvious that if a band moves on to a bigger and better label that there is more potential to increase sales for the label, and artist. When your contract locks the artist in with you, this potential is diminished, holding both parties back from a more prosperous future.

Instead what I suggest is altering the contract to allow the artist to sign to another label, while the label holds exclusive rights to the recording of a predetermined amount of songs from the releases they put from the artist. Depending on how much the label invested in the artist, the terms of how long the label own the recording and exclusive rights to a release should be determined. While there are many smaller labels offering only pressing, physical distribution and minor marketing budgets, obviously the compensation should be smaller if this is all that is offered. The length of exclusivity and how many songs the label retains should be negotiated on a case by case basis, seeing as no two deals will ever be the same.

The benefits of this changing of terms will enable both artist and label to grow. The label can profit from an exclusive release, which will sell as a back catalog release to an artists expanding fan base, while the artist is free to move on to bigger and better things. The label will also be seen as more artist friendly and get the clout a label earns when their artists move up to a bigger label, while still profiting from the time and money they put in. A win-win situation for all.

Jesse Cannon is the editor of Musformation. He produces records at his studio Cannon Found Soundation. Follow him on Twitter at @JesseCannonMusF. For more info please visit his website.