Why the biggest advance isn’t always the best advance

For the developing artist, there’s really no such thing as too small of an advance. What might be $1k in the hands of an emerging creator can be similar to $10k for an established artist if put to good use. 

Then again, why would anyone turn down a bigger deal? 

Assuming an artist is even given the chance to strike a bigger advance, bigger doesn’t always mean better – and it doesn’t mean they shouldn’t take the smaller one either. 

The downside to bigger deals 

Believe it or not, there can be a downside to larger advances.  

When a label or distribution company makes an artist a big offer, there’s greater risk involved. This means that in order to make sure they get a good return on their investment, they’re going to have to take more from the artist in the process.  

On the other hand, independent funding sources like beatBread mitigate the risk involved for all parties without having to own the artist’s music or provide low royalty rates to artists.  

In some cases, major labels may write the biggest checks, but a smaller (some may say “smarter”) advance can be much more valuable than you might think.  

None of this is to say that a beatBread advance is always going to be smaller than other options artists might have. In many cases, we may be the largest (or the only!) advance an artist has in front of them.  

Regardless of size comparisons, we do believe our advances are “smarter” because of the data-driven model we’ve created. Our goal is to provide the most amount of funding, on the best terms possible, and that gives the artist the greatest chance to actually recoup within their chosen term length. 

It’s all about strategy 

When mapping out your career, do you plan the steps and then try to get the cash you need to achieve each one, or, do you get the money first and then figure it out from there?  

The better answer is the former, but artists tend to think their next single will blow up overnight and more money will come their way because of it. So, they wait to take advances thinking someone will give them more, but it doesn’t usually take long for the realization to hit that a bigger offer probably isn’t coming their way so soon.  

The moral of the story is that artists need to be pragmatic and honest with themselves about the size of their offers, and should pursue an advance for a specific reason.  

At beatBread, artists have complete control over how they choose to spend their advance. Whether it’s on marketing and creative partners or an upcoming car payment, artists can use their funding in whatever way makes the most sense for them right now.  

Lower stakes 

Artists have to be able to recoup their advances.  

Major labels tend to look past the possibility that an artist may not recoup and provide a massive advance anyways. This puts the artist in an all or nothing situation because the only way they can realistically recoup is if their career skyrockets. We aren’t saying it’s impossible, but it doesn’t typically work that way. 

Most artists find themselves on a steadier growth path that, although still profitable, isn’t always enough to recoup. If the artist does recoup their advance from the label, they’re typically only entitled to about 10-20% (or less) of their earnings post-recoupment.  

Smaller, shorter-term advances are an opportunity for artists to invest in themselves without having to worry about the loss of control or ownership. The stakes are lower and recoupment is more attainable.  

At beatBread, we lower the stakes even further for artists by affording them an extra layer of transparency that lets them know exactly how much funding we’ll give them, what their recoupment rate is, how much they need to earn to be fully recouped, and how long the deal is expected to last.  

Plus, artists are able to customize their offer to get the best terms for their specific needs. There are no hidden fees, interest rates or penalties, and the amount the artist owes will never go up. 

Don’t underestimate the value of a smaller deal – take it 

Artists tend to think this is the biggest decision of their career, but here’s the thing: it’s not.  

Your career might blow up overnight, or it might not. Either way, take the offer that allows for ultimate flexibility, do what you can with it, and prioritize maintaining your financial and creative freedom for as long as you can.  

Regardless of advance size, no amount of money is worth the sacrifice of your independence.