It’s important that you read any deal thoroughly before you sign it. You need to know exactly what you are agreeing to, as for make no mistake, a record label will structure a deal that benefits them more than you.
An option is basically the record deal getting you to sign to say that they can, if they want, demand you record ten albums for them, but that they may not. This is a record label covering itself and it’s always structured in their interest, not yours. If you sign an option deal and record a single with the label, and it flops, you won’t be going on to record those ten albums. If your single is a great hit you may record the first album, and then see how that goes. Basically, it’s giving the label all the options and you none. Unfortunately, options are a fact of life, and you should see it as an opportunity. You’re gonna want to make damn sure that single is not a flop!
It used to be the case that when an artist signed a deal they were agreeing to record x number of albums in x amount of time. When albums sold in big numbers artists were often contracted to record two per year and the length of their contract would be set at, say, two years, meaning they had to produce those albums in that set time. Things are different now. As album sales have dropped and artists often deliver the goods months later than agreed, labels have tightened up their contracts. Now deals state that, instead of recording this amount of albums in this amount of time, your current contract will end six months after delivery of the album. This means the label can drop you six months after the album, with no obligations and no matter how long it took you to record it. It’s not in an artist’s interest to take years recording an album, but it often happens.
Be very careful about how your deal is worded when it comes to delivery of your album. When the words ‘technically satisfactory’ are included it means you must deliver an album that is technically well made. Simple. But this is quite rare, especially for new artists. It’s more likely you’ll see the words ‘commercially satisfactory’ and this again gives the label all the power. If you are required to deliver an album that is commercially satisfactory you are agreeing to produce something that will sell well. So if the label thinks what you’ve come up with isn’t saleable enough they can demand you re-record it or they can drop you altogether, stating you haven’t delivered what you agreed to deliver.
If this all sounds like artists are being played by labels, remind yourself of why labels exist. They want to make money. They HAVE to make money, or they won’t survive. So, yes, they structure deals so they are less likely to lose. And if you want to play with them, you’ll have to work to these agreements.
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