What music contracts are available to artists?

Today, we're here to explain the different music contracts available to independent artists and music creators. We've tried to make this blog post as interesting (and informative) as possible, so get comfy, grab a pen, and take a step toward building your music career!

The 7 Music Contract Types:

1. Production

2. Publishing

3. Music Licensing

4. Collaboration

5. Distribution

6. Management

7. Record Deals

Production Contracts: What Does a Music Producer Do?

You might’ve heard of the term “music producer”, but what does a music producer do exactly? In Europe, the term is often seen as synonymous with "record label,” but the US differentiates these two roles:

1. Music producers typically work individually, while record labels tend to collaborate within large teams.

2. Music producers oversee artistic direction, while record labels are primarily in charge of funding and other business-related aspects, such as distribution.  

To keep this blog simple, we'll focus on the American definition of a music producer: "The artistic director of the music world, blending selections of individuals and tools in a studio to create a collaborative piece of art for your ears." 

So, how do you sign with a music producer?

It's simple. A production contract signals a collaboration between an artist and an independent music producer. It determines the producer's level of involvement in projects and the amount and type of compensation. Occasionally, producers can also be investors, bringing in their own funds to support the music creation process.  

If you, as an artist, want to retain more independence and control, collaborating with an independent producer can be a great choice.

Publishing Contracts

As a songwriter, you can partner with a publisher who promotes your song to third parties. This is THE partner for managing your copyright and synchronization rights (aka the rights to use your creation as a soundtrack for visuals, such as in commercials). 

Signing with a music publisher can help kickstart your career thanks to the publisher's professional network, financial resources, and expertise in copyright.

What does a music publisher do?

A music publisher sells your songwriting work and expertly manages the technical details in exchange for an advance and a split of the related copyrights.

Want to get your music into commercials, series, movies, and video games? Want to take a step further as an independent artist? Want to save time and focus on music creation? A publishing contract might be a great fit. 

Music Licensing Contracts

Music licensing contracts can seem complicated, but we've broken it down simply:

• They typically occur after recording a music project

• For one record only and are usually short-term

• Signed by the artist and the distributing record company

These contracts are an excellent way for artists to promote and distribute their work after producing the end product.

The distributing record company can help with concerts, press and online media, video expertise, partnerships with social networks, streaming platforms' playlists, and more. Since the label only comes into the process once the recording is done, artists earn more revenue than with a record deal contract (i.e., saving you money!)

If, as an artist, you want greater independence during the recording process and professional support during release and promotion— a music licensing contract is the way to go. Retain your artistic freedom while taking advantage of the knowledge and reach of record companies. Best of both worlds.

Distribution Contracts  

Distribution contracts formalize the partnership between an artist and a distributor, the intermediary between artists and streaming platforms or record stores. In exchange for this service, the distributor receives the master rights for a specified number of records over a given period (usually 1-5 years) and in certain territories.  

Digital music distributors vary in how they charge for their services. Many digital music distributors, such as DistroKid or CD Baby, work via a fee system—with DistroKid charging a yearly fee and CD Baby charging a fee per release. After paying, artists upload their sounds for sharing on streaming platforms and keep 100% of the royalties issued from the master rights. Artists choosing to work with Winamp for Creators can distribute their music completely for free, whereas other digital music distributors take a percentage of the royalties. 

Collaboration Contracts  

Do you collaborate with other artists on musical projects? If so, it's crucial to outline how you will split the revenues and royalties before recording or releasing your team's work.  

This discussion matters as much as agreeing on your artistic strategy because it will prevent future disputes or misunderstandings. Ideally, the collaboration contract should last for as long as the project requires.   

When reading a contract or discussing a professional collaboration, remember the "LOMO" rule, which stands for Length, Obligation, Money, and Ownership. These tend to be the most important clauses to consider before making an agreement.  

Management Contracts  

A music manager can be incredibly helpful in strengthening an artist's music career. Typically, a manager works as an intermediary between the artist and all other people and entities working on developing or promoting the artist's music.   

It is vital to feel perfectly aligned with your chosen manager since they will represent you, make key decisions, and make your vision a reality. Think of your manager as an extension of yourself— someone taking over the technical details so that you can focus on what matters most: your music.  

Management contracts tend to be one year long and renewable, with details on the relationship, duties, and compensation. Usually, compensation for managers does not exceed 10% of an artist's income.   

Record Deals  

Let's face it—record deals are the Holy Grail of the music industry. They encompass all the services we've mentioned above while also providing artists with financial support for recording.  

Of course, these services come at a debatably heavy price— master ownership with a varying percentage of musical rights. Typically, record labels take around 75-80% of the master rights, leaving only 15-20% of the rights to the artist. However, some indie labels now share up to 50% of the rights with artists.  

This percentage distribution really depends on the amount of label services you ask for. For example, if you sign a 360° contract, your record label manages all aspects of your music project, which means they take a bigger percentage of your master rights. 

How much does a record label pay an artist? 

The record company's first and most basic job is financing its artists. Usually, the label will pay artists an advance—funds given ahead of time that give artists the time to work on their projects until they are released. Additionally, artists get a budget for promoting music, buying equipment, outfits, and so on.

How long do these partnerships last?  

The duration of an artist's contract with a record label can be defined in two ways:

1. By the number of projects an artist commits to producing in collaboration with the label

2. By a specified period (usually one renewable year)

There are no rules on how to get signed to a label, but we recommend consulting a law professional to read the contract and clarify any details of the partnership ahead of time.

Before signing any record label contract, it is key to be aligned and comfortable with the team, art director, and services offered. Remember to clearly communicate your vision and goals as an artist to ensure the smoothest process possible.