The legal aspects of this industry aren’t always so straightforward. That’s why we place the utmost importance on providing as much information as we can to help you navigate through it with ease. There are many different types of contracts artists and labels will encounter throughout their careers, so let’s break them down a bit. In this post, you’ll learn about 6 major types of record label contracts you should definitely know about. Let’s dive in…
6 Types Of Record Label Contracts
Exclusive Recording Contract
An Exclusive Recording Contract means the artist agrees to work only with that label as a recording and performing musician for the duration of the deal. It also usually covers any songs the artist writes during that time, and sometimes even includes songs written before the contract began. The exclusivity applies to:
- The artist: They can’t sign with or release music through another label during the contract period.
- The songs: The label often controls the rights to those songs for the full life of the copyright (unless stated otherwise).
This type of contract is commonly used when a label wants to fully invest in an artist’s career long-term, both as a performer and songwriter.
Music Distribution Contract
A Music Distribution Contract gives a distributor the exclusive right to distribute your music (also known as master recordings) in physical or digital formats, like CDs, vinyl, cassettes, downloads, or streaming, for a set period of time and in specific countries or regions.
In this deal, the artist or label keeps ownership of the music but allows the distributor to handle getting it out into the world within the agreed time frame (called the Term) and geographic area (called the Territory).
Non-Exclusive Recording Contract
A Non-Exclusive Recording Contract allows a label to license specific recordings from an artist without requiring exclusivity. That means the artist can still work with other labels and release different songs elsewhere.
The label gets rights to use only the recordings listed in the agreement, while the artist keeps full freedom over anything not included. This type of contract is great for short-term or one-off projects and is often used as a “trial run” before committing to a more long-term or exclusive deal.
360 Deal Recording Contract
A 360 Deal is a comprehensive contract where a label or music company partners with an artist across multiple areas of their career, not just recorded music. This can include things like songwriting, live performances, acting roles, merchandise, sponsorships, and brand deals. In exchange for investing in the artist’s broader career, the company takes a percentage of earnings from these different revenue streams.
These deals became more common as labels adapted to shifts in the industry, such as:
- A decline in revenue from music sales
- Growth in live event and merch income
- Increased earnings from public performance and sync licensing
While a 360 deal can offer valuable support and resources, it also means giving up a bigger slice of your overall income, so it’s important to weigh the pros and cons carefully.
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Music Composition and Recording Service Contract
This type of contract is typically used when a company hires an artist to create custom music for a specific project. like a film, TV show, commercial, or video game.
Under this agreement, the artist is paid a one-time fee to compose, arrange, record, and produce the music. In return, the company receives full ownership of the work, meaning all copyrights are transferred to them, and the artist waives their moral rights. However, the artist still keeps their writer’s share of public performance royalties, which they can collect through their performing rights organization (like ASCAP, BMI, etc.).
The company is also allowed to use the artist’s name, image, voice, and bio in connection with the production. The artist must also guarantee that the music doesn’t infringe on anyone else’s copyright. This kind of contract is ideal for companies that want to commission both the composition and the recording in one go, especially for media productions.
Recording and Publishing Agreement On Certain Recordings
This type of contract allows a label to acquire both the recording and publishing rights to specific songs from an artist. In exchange, the artist typically receives an advance, ongoing royalties, and a commitment from the label to fund, release, and promote the music, including seeking sync and performance licensing opportunities. Under this agreement:
- Recording rights are assigned for the life of the copyright (typically 50 years after release).
- Publishing rights are granted for a set period, usually around 15 years.
- The label usually has a set window (for example, 6 months from delivery) to release the music and start pursuing sync or performance placements.
This setup is especially useful for labels that want to handle both sides of a release, recording and publishing, within one streamlined deal, without negotiating two separate contracts.
To wrap things up…
Understanding the different types of record label contracts is crucial for protecting your rights and setting yourself up for long-term success in this industry. Whether you’re navigating your first deal or re-evaluating an existing one, having a clear sense of what each contract entails can make a huge difference. Always take the time to read the fine print, ask questions, and when in doubt, consult a legal professional who knows the ins and outs of music law. Knowledge is power, and when it comes to contracts, it’s your best form of protection!
You got this. 💪
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