What you give up when you sign a record deal

Technology, and specifically streaming, has transformed the way people consume music, upended traditional cashflow structures, and leveled the playing field for independent and mid-sized musicians.  

It used to be that artists needed a record deal to build a successful career in music. Now, virtually anyone can do it; create music, share it with the world, and develop a fanbase that ultimately becomes profitable.  

But that’s also where the challenges begin.  

While all of this has afforded a bit more equality for emerging artists, it has also created an increasingly competitive industry in which funding remains a key factor in the ability to stand out.  

This is why many artists still see “getting signed” as the best way to kickstart their career, but major label deals come at a high cost and it’s important for artists lucky enough to get a label offer to understand what’s really at stake before signing on the dotted line. 

Understanding the risk involved 

While major labels may sometimes be willing to provide the largest advance available to an artist, bigger offers come with greater risk. This means that when a major label gives an artist more, they’re going to have to take more from them too.  

Labels come with experienced resources, connections, and deep pockets, and while they can make a big difference when they really get behind an artist, everything they could offer comes at a price. Artists often don’t receive the full force of those resources and connections but still pay the price for them with a very low royalty rate.  

What you don’t know can hurt you   

Too often, we see artists lock themselves into a record deal in order to get an immediate investment in their career. In exchange, artists agree to what look like short-term “compromises” that actually hurt them in the long-run.  

Many artists don’t realize the gravity of deal terms – and if it's your first offer, why would you? The problem isn’t the artist but rather that labels tend to use what emerging creators don’t know to their own advantage.  

Instead of considering deal terms only as the label presents them, read between the lines and look beyond the short-term because those seemingly small sacrifices can have major implications for an artist’s career and earnings potential.  

The power of ownership and creative control 

One of the biggest things labels want in return for an offer is ownership; ownership of the artist’s music recordings, and in many ways, their career. Artists should protect their music ownership because whoever owns their music wields the most power; they own the copyright, they control how the music is released, used and promoted.  

In a typical deal, artists are only entitled to about 10-20% (or less) of the total lifetime economics generated from their music while the label pockets the rest. So, artists might find that their signing advance loses its luster when they wind up losing a huge amount of revenue in the long-run.  

Record deals also often require artists to sacrifice certain creative control, and the fact is, whoever has ownership gets the final say in the sound, image, and overall brand.  

Fans don’t just fall in love with songs but also with the artists behind them; their individuality and uniqueness. No dollar amount should come with conditions of an artist changing who they are as an artist.  

Nothing is worth the sacrifice of your independence 

Record labels can play an integral part in the career of some artists, but artists don’t NEED a record deal to succeed anymore. With new technologies and companies like beatBread providing an alternative way to fund careers, artists now have more freedom and flexibility than ever before. 

Our mission is to enable more artists to access funding so that they can put more great music out into the world on their own terms. We provide the funding, and leave the rest up to the artist (and their chosen team) – and we don’t ask them to give up ownership or creative control in return.