Artists and their first record deal

Artists and their first record deal

Let’s imagine a new band that has already recorded their first demo, with reasonable but improvable quality, and has played in several local’s bars, not only for friends and family, but also has been contacted by a record label manager who promises them greater resources, a wider audience, and more promotion. Suddenly, and without warning, legal issues appear on the table that go beyond registering with the SGAE and indicating the percentage of the lyrics or melody that correspond to the author’s rights of each member of the group.

It is likely that the experienced manager will present them with an agreement so-called “360” or a series of agreements with the music publisher, record label, and management and representation team. These documents will regulate their life as a group, depending on their negotiating skills (usually low, in their beginnings) and their knowledge of the industry, to agree on conditions with which they are satisfied.

This blog is not intended to be a monograph on this issue, which would require at least 5 or 6 posts to write, but rather a basic introduction to provide certain elements of knowledge to these groups or artists. The starting point is to understand what we are signing and with whom we are signing, bearing in mind that in many cases, everything revolves around the record label, which, as a subsidiary or company of the group, has the music publisher and a management department that includes bookers, publicists, etc.

Firstly, we have the music publisher, who will manage the group’s copyright and to which they will assign not only the associated rights but also those related to the compositions. For example, they will be responsible for collecting the mandatory collective management rights or managing the commercialization of the sheet music.

Secondly, we have the record label, which will be responsible for producing or commercializing the phonogram, which is understood as the first fixation of the musical works, that is, the master of the record. They will be responsible for distribution or public communication, that is, in physical or virtual format. At this point it is necessary to take into consideration that the group is not only operating at the level of intellectual property as authors of the work, but also incorporates the rights as artists, while the former are those who create the work, the latter are those who perform it and whose results are fixed in the phonogram. Likewise, the rights corresponding to the music producer and sometimes those of the arrangers are also included.

Finally, the management department will oversee promoting the group, seeking concerts and festivals for them, negotiating their performance conditions, but also managing the band’s merchandise and even their appearances in the media and collaborations as models!

Normally, all the above is usually accompanied by Record Label Contract, in which the group is commissioned to compose a series of works, usually albums, within a defined time horizon. The record label will be responsible for providing the necessary resources for recording and sometimes, cash advances to the group, which will be returned later, either through privileged royalties until the investment is recovered or through the repayment of the loan, on a previously agreed date, if the investment made is not recovered.

With all of the above, I just want to illustrate two issues. The first is the mixed nature of the agreements that the group will sign and the different layers of complexity that they can have, especially if the group has no experience. Despite this, and without prejudice, if this post is well-received, I will prepare a more detailed series on the subject. This new group must first consider what it wants and how far it is willing to compromise. In the end, although it is easier now than it was 10 years ago, it is difficult to succeed without a label’s support because, as we all know, they are the ones with the resources and contacts that can take the group to the next level.

And it’s true that these agents in the music industry should not be demonized; they perform a fundamental role, and it’s clear that we all want to succeed in our work. The key is for the group to find a label that they are comfortable with, which is seen as a win-win for both parties because the label will actually benefit more if the group succeeds.

In any case, and to provide a brief overview, it’s important to (i) value what they can bring to the table, (ii) be aware of the length of the partnership you want to have with them, (iii) as well as the duration of the intellectual property rights transfer, (iv) how their commitment to you will be realized, (v) and the amount of royalties (don’t forget the difference between gross and net). When you sit down with them, with clear ideas in mind, after an initial contact, ask for the agreements to review them calmly and, in the second meeting, be able to present the scenario you want for your future and try to bring the positions closer together so that the collaboration is reciprocal and successful.

And in any case, if you need it, we can help you with everything you need.

And in any case, we recommend that, in case of any doubt, you consult with lawyers specializing in copyright.  At Letslaw by RSM our intellectual property experts will be happy to advise you. Intellectual property lawyers | Letslaw