The 15 Most Important Points
In Every Recording Contract

In the music industry, one word in a 50,000-word agreement can 
mean the difference between success and failure - financial security 
or  bankruptcy. Therefore it is absolutely essential that the Artist 
and their representatives understand the basic provisions of the 
recording contract and what the document actually means in terms 
of  "real" money.

Standard industry record contracts are filled with hidden meanings 
and pitfalls that will determine the amount of money you will earn 
from the sale of CDs, tapes, digital downloads, streams and videos, 
including how or if you will be protected as new technologies
and distribution models are developed after you have signed your 
contract. There are, of course, many important variations that can be negotiated - both from the 
artist's and the record company's point of view.

Before signing a record contract every performer must know the answers to the following questions, 
since they will have a substantial effect not only on the direction of his or her career and the 
amount of money that is earned but also whether an artist will ever be on the charts.

1) Time limit: How long will the contract last?

2) Options: How many times may the contract be renewed, for how long, 
and by whom?

3) Web Sites: Who owns and controls the artist web site?

4) New Technology Uses: How is the artist paid for methods of 
distribution that doesn't exist but are invented in the future?

5) Audit Rights: What rights do artists have to make sure they are 
getting paid correctly?

6) Recordings and Releases: How many sides will a performer record, and 
does the record company have to release the finished recordings 
commercially?

7) Royalty Clauses: How much money does an artist receive from the sale 
of singles, albums, cassettes, CDs, downloads and videos?

8) Reduced Royalty Clauses: How much does an artist receive for sales 
in foreign countries, record club or television album collections, radio 
station promotional copies, low priced budget albums and new 
technology?

9) Record Company Deductions from a Performer's Royalties: What 
expenses do record companies deduct from a Performer's earnings?

10) Escalating Royalty Clauses: Are there ways to guarantee that as an 
artist becomes more successful, royalties will automatically be 
increased?

11) Costs of Packaging a CD, Tape or Other Recording: How much money do 
record companies deduct from an artist's royalties for the cost of 
album covers, special inserts, download services, and tape, CD, MD or video 
containers?

12) Free or Discount Recordings: How many recordings can a company give 
away for free or at a discount without paying royalties to the artists?

13) Returns and Reserve Accounts: Since an Artist is not paid for 
tapes, CDs and other recordings that are returned for credit, how much 
money can be withheld from royalties in anticipation of such returns?

14) Advances: When do record companies give cash advances to artists? 
What criteria do they use?

15) The Recording Artist as a Songwriter: Do record companies pay lower 
songwriter royalties to artists who perform their own songs? Can a 
million-seller or successful "best hits" album mean financial disaster to a 
writer/performer if other songwriters on the album don't agree to 
reduce their writer and publisher royalties?

Negotiating the right answers to these questions is critical if an artist is to make
money and be successful in the music industry.

(c) 2004 Jeff Brabec, Todd Brabec

This article is based on information contained in the new, revised 
paperback edition of the book "Music, Money, And Success: 
The Insider's Guide To Making Money In The Music Industry" 
New Expanded 4th Edition, written by Jeffrey Brabec and Todd Brabec.

This music business book and other titles are available at 
a 10% discount at  The Musician's Atlas Shop.

Todd Brabec is Executive VP and Director of Membership for the American 
Society of Composers, Authors and Publishers (ASCAP).

Jeff Brabec is VP of Business Affairs for the Chrysalis Music Group.
Both brothers are former recording artists, writers and entertainment 
lawyers. They are also adjunct professors at the USC Thornton School of Music, 
Music Industry Department.