A Guide To The Major Record Deal

In a previous post I talked about the 360 degree artist deal, but this time I will talking about one of the most popular artist contracts - the major record deal.

With this deal, the record company pays all the costs - recording sessions and gear, videos, promotion, pressing, distribution and any other costs. Bands or artists also get a huge advance as an additional 'sweetener' and contribution to some of the said costs. This deal comes with huge expectation and promise to the artist/band, with the intention to engineer big sales, fame and fortune.

If only it was that easy. The reality of this deal is that the artist/band has to recoup all the costs, and to do that they have to sell a lot of records. Major labels spend a fortune on the initial videos, pressing, promotion, distribution, recording, production and whatever else, and all the staff involved in those processes have to be paid before the artist/band receives anything from the fruits of their work. Typically a new artist/band gets 10-15% of the royalties on their initial album sales. Any artist/band has to be aware of these costs, and not get carried away with the fact that they've signed a major record deal and believe their sales will go through the roof. Record sales aren't what use to be, so it may take time just to recoup to the initial costs. Quite often an artist/band doesn't get that time.   

However, having a major record deal has plenty of benefits. It can open many doors to many different areas of the music industry. It can give an artist/band the complete music business experience, both positive and negative. It can be a great learning curve for them, especially given the fact that they are surrounded by people who generally have years of experience behind them and can strategize the best method for an artist/band's success. It's an incentive for the label to make the band a success because that's how any label makes money - they are almost entirely dependant on artists.

A major record deal can be a huge breakthrough for any type of musician, but the risk is always there and any artist/band has to be aware of the expenses they have to recoup.