There’s More Than One Way to Chase Your Dreams: 4 Record Deal Alternatives for Musicians

With a mass shift in the way the public consumes music around the world, recording contracts with major record labels are no longer the only option for artists. As the lead singer of the band Pomplamoose, Jack Conte, put it, we are witnessing the rise of an entertainment middle class in an industry that was always starkly divided into either megastars or starving artists.

There was a time when signing a record deal was most musicians’ only option for making a significant living creating and performing music. The label would bankroll all aspects of the production and distribution of an artist’s music, while the artists would receive a share of the royalties. However, the record label would permanently own the rights to the sound recordings and would be able to exert significant creative control over the product.

Now, technological disruptions in the music industry have opened a significant number of alternative doors for emerging artists that are allowing them to reach more consumers without having to lock themselves into a contract with a major record label.

In this blog we will detail a few of the alternatives for musicians who do not want to sign a standard recording contract with a record label. Some of these alternatives are a shift in the way business is conducted between artists and labels that generally favors the artists, while others cut out the labels entirely. To learn more, please contact CALEVOSO LAW today.

1) DIY

The internet age has also led to a rise in do-it-yourselfers in nearly every facet of our lives. With unprecedented access to information, people are able to research and educate themselves in a manner which allows them to do things they once had to pay others to do for them. The music industry is no different. While the DIY approach is certainly the most labor intensive—the artists must handle all aspects, including costs, of production, distribution, and marketing themselves—the ability to reach larger audiences through direct distribution channels, Youtube, and other methods has made it much more feasible to make a significant living as a completely independent musician. You will maintain complete creative control, the rights to all of your music, and receive around 100% of the royalties from your sales. It is by no means an easy path, but it has become much more realistic than it once was.

2) Manufacturing and Distribution Deals

Manufacturing and Distribution Deals, also known as M&D deals, are when the artist does everything except for actually manufacture and distribute his or her music. Artists sign a deal with a company, usually a smaller record label, who will handle the costs of M&D and recoup those costs through record sales. Some M&D deals may also include things like marketing. They can be very beneficial for artists, but since labels don’t stand to make much money from and M&D deal they can be difficult to obtain.

3) Net-Profit or Profit Sharing

Standard recording contracts generally afford artists about a 15% share of the royalties. In a net-profit or profit sharing agreement, the artist and record label will split the net profits 50/50, with net profits being what remains after accounting for all of the costs to manufacture, promote, distribute, etc. With this type of deal the artist gets to maintain control of the copyright and receive a higher share of the royalties.

4) License Deal

Artists may sign a license deal with a label where the label will receive the full rights to the music for a temporary period of time, during which the deal will function very similarly to a standard record deal. However, after the duration of the license expires, all rights revert back to the artist.

Artists are figuring out more and more creative ways to earn a living by creating music every day, and in ways that afford them the chance to maintain significantly more creative control and rights to copyrights and royalties than ever before. If you are a musician who is looking for guidance in discovering alternatives to signing a record deal, please contact CALEVOSO LAW today to learn how we can help.