Before you sign that record deal, there are a few things you need to consider. Hopefully you read this before you sign and it is too late. It is possible that growing up all you wanted to be when you grew up is rich and famous. Signing a record deal doesn’t not guarantee that you will become rich or famous. That’s what they do not tell you in the fine print.
In any business or negotiation table, the number one question that you should always ask yourself is, what value do I bring to the table? This is not just in the music business but relationships and partnerships as well. If a record label is willing to sign you that means that they see potential in you and by signing, you believe that if they invest in you that they will not only recoup what they have invested but get return on investment as well.
What many fail to consider when signing a record deal is the question of what happens if the music projects or investment fails to yield returns. In the music business, an artist only starts to make money from their music once the label has been paid for any advances or expenses. So, if the label pays an artist an advance of 100,000 and invests 150,000 in the project. Once the project is released and starts to make money, the artist will only start to make money or earn a share of the revenue once the label has recouped its 250,000.
Like any business, not all music ventures are successful. The truth is that only a handful of signed artists are successful. The music business is like betting. Record labels take bets on different artists hoping that artist will become the next big artist. As an artist, you hope that you will become the next big thing and become rich and famous. The odds are however stacked against you with many different factors in play that determine what success in music looks like. If you sign a record deal and don’t become successful, you don’t own any of the music or work that label produced. It is their work whether it is successful or not. They paid for it and depending on the contract you sign, you will receive a share of revenue after they have been paid for their investment. So ask yourself, do I need to sign to a label or invest in myself until I can walk onto the negotiating table with my terms? Or should I keep ownership and own all of my work? Keep in mind there are good and bad record deals, it depends on your situation but if the deal is too sweet then think twice. You might have something on your hands, that’s why someone wants it, it might be wise to hold onto it a bit longer.
