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How to Get a Record Deal (The Pros and Cons)

Updated: Nov 16, 2022


How to Get a Record Deal

For many aspiring musicians, getting a record deal is the ultimate goal. A record label can provide resources, distribution, and marketing support that can help to propel a career forward. However, the music industry has changed a great deal in recent years, and it is now possible for independent musicians to find success without signing a contract.


In this article, we will examine the pros and cons of a modern recording deal, how to pursue your own offer, and the things to look for in a deal that will lead to success.


First, lets establish the basics.


What is a record deal?


A record deal is a business agreement between a record label and an artist, in which the artist agrees to release their music with the label in exchange for certain benefits.


These benefits can include financial compensation, marketing and promotion support, and access to recording studio facilities. The terms of a record deal are typically outlined in a contract, which is signed by both parties.


The length of a record deal can vary considerably, but most contracts last for multiple albums or a set period of time. If the artist gain significant popularity, they may be able to negotiate a more favorable deal when their contract comes up for renewal. However, if they fail to meet the expectations of the label, they may be dropped from the label or have their contract terminated early.


Not all record deals are the same.


Most record labels offer various types of record deals, each with their own nuisances. Different management models are tailored to each recording label individually, as artists have different reasons to sign.


record label producer

The more difficult to succeed a musical genre is, the more complicated a records agreement will often be. This is because a record label must provide more studio hours, promotions and marketing support to make it known. Recording deals are not uniform and should be carefully considered before singing the dotted line.


Lets examine 5 of the main types of record deals independent artists should be aware of:


1. Traditional Record Deals

When someone mentions a record deal, they are likely talking about the traditional major-label ones. In this exchange, the record label will grant the artist a large advance for their masters’ ownership and upwards of 85-90% of their royalties. Additionally, before the artist even sees a dollar of their royalties, they must recoup their advance and recording costs, which rarely ever happens.


Largely popular in the 1980s to the early 2010s, the power in this relationship lies with the label. With the rise of the internet and more artist-friendly deals, traditional record deals are phasing out. However, these deals were commonplace during the physical era of music.


2. 360 Deals

This is a conventional, by-the-book arrangement with a record label. The label will take a percentage of all forms from income - tour sales, merchandising and fan club membership on the thought that if they break an artist it’s only right this cut should be theirs. Usually, this percentage taken by the label can also be anywhere from 60-90%.


This deal is good for artists who have no desire to learn any music marketing or promotion tactics alongside a plethora of other skills (hint: learn valuable marketing strategies for musicians here.) However, the deal can be harmful for long-term revenue and often despised by artists who do succeed. Think of a 360 deal like signing away a big portion of your company on Shark Tank. It will greatly help your chances of success to have support behind you, but your piece of the profits will be significantly reduced.


3. Profit Split Deals

The artist is compensated for their time and effort in a profit split deal. This includes any recording, marketing or other expenses they incur while working with the label to promote its releases. Once expenses are defined, and royalties that go into the "profit" category, or essentially, any money made after covering all expenses will be split.


In this type of deal, a contract can be very straightforward if both parties agree on everything upfront. However, there are times when conflicts arise that need to be resolved before signing off on paper- essentially how much each party will get back after all costs have been paid out from inception until completion of production work (including any advances).


For example, the label may agree to a 50/50 profit split for an album in exchange for an advance, but only recoups what is spent on recording and marketing. This would be a lost opportunity for a label. Therefore, agreements may include different royalty rates depending on streaming averages.


iSpyTunes offers independent artists the chance to do profit split deals and co-release strategies. This can be arranged for individual releases such as singles or albums. If the partnership proves successful, a continued working relationship can be established. Reach out for specific inquiries, or learn more here.


4. Distribution Deals

Distribution deals have been on the rise in recent years. These deals typically provide less opportunity for artists than other types of copyright management. However, these agreements can be perfect if you're looking to distribute your release without any overhead costs or risk involved! Distribution deals can cover both digital and physical selling, depending on the company and offer.


Although in this type of deal marketing usually falls on the artist or brand, you can fill that void with a music manager or management team. (hint: learn more why a music manager may be the solution you need to grow your music career here.)


5. Upstreaming Deals

Upstreaming deals are similar to traditional record deals, but they offer more money up front in exchange for a greater share of future profits. The downside is that these deals are much harder to come by, and they often come with stringent requirements.


For example, the label may require the artist to deliver a certain number of albums or singles, or they may impose strict limitations on creative control. But for artists who are able to secure an upstreaming deal, the rewards can be significant.


record label meeting

Upstreaming deals can be beneficial for artists as they provide access to greater resources and a wider audience. In addition, these deals can help to increase the value of an artist's catalogue, making it more attractive to potential buyers. However, upstreaming deals can also be risky, as signing with a major label can result in the artist losing control over their career.


How much is a record deal usually?


record label money business deal

Companies can typically invest anywhere from $250,000 to $5,000,000 in new artists. These investments involve two equally main components, an advance and the expenses. Advances can be paid directly and immediately to the artist in exchange for their music or future recordings. Expenses typically cover distribution, publishing, marketing, legal advice, and other expenses. Therefore, artists usually earn between $125,000 to $2,500,000 up front for their rights and master recordings.


The specific number of money can depend on popularity, the length of the contract, and the size of the advance. Advances can range from a hundred thousand dollars to millions, depending on the drawing power.


The average recording contract is for three to five years, but some deals are for much longer. Or, contracts may be based on recording commitment, where a first record or album is only part of the required projects needed to be released.


So, there's no easy answer when it comes to how much a record deal is worth. It all depends on the individual artist and the terms of their contract. But one thing is for sure: signing a record deal is a big step forward in any musician's career.


What is in a record deal?


A record deal is a contract between a recording artist and a major label. The agreement covers the terms of the recording and release of an album, as well as the artist's touring and other promotional activities and branding.


In exchange for these rights, the artist typically receives an advance against future royalties, as well as a percentage of the sales from each album. Importantly, the advance is typically recouped from the artist's future royalties, meaning that the artist does not begin to earn royalties until the advance has been earned back by the label.


The size of the advance and royalty rate vary depending on the artist's popularity and negotiating power, but advances can range from $100,000 to $1 million or more. Again, these rates can vary depending on the artist's popularity and negotiating power.


Finally, it's important to note that record deals are often very complicated contracts with many different clauses and provisions. As such, it's always advisable to have an experienced entertainment lawyer review any contract before signing it.


How do you get a recording deal in 2022?


There is no one-size-fits-all answer to this question, as the best way to get a record deal as an independent artist depends on both your music and your music business acumen. However, there are a few key steps that all artists should take in order to increase their chances of being signed.


record label musician

First, it is important to create a strong online presence. This means not only having a website and social media accounts, but also making sure that your content is high-quality and engaging.


In addition, you should try to build a following of dedicated fans who are willing to support your music financially. You can do this by offering exclusive content or merchandise in exchange for pledges on platforms like Patreon.


Finally, it is also important to connect with industry professionals who can help you find the right label for your music. By taking these steps, you will improve your chances of getting a record deal as an independent artist.


Which strategy should I use to get a record deal?


There are a few different ways to approach getting a record deal as an independent artist. The most direct way is to submit your music to labels that you’re interested in working with. (Click here to submit music to our label :) This can be a lengthy and competitive process, but it’s worth doing your research and targeting the right labels for your brand of music. (Click here to see the best blogs you can submit your music to)


Another way to get a deal is through an artist development company. These companies work with unsigned artists to help them get signed to a label. Or, you can also work with a booking agent or manager who has relationships with labels and can help facilitate a deal.


The size of the record label you are attempting to contact can also impact your chances of getting a contract in the first place. Let's now shift our focus to which size of label is best for outreach.


What's better: signing to big labels or a small record label?


small and big record label visual comparison

Big Labels

As an artist, signing with a big label is easier said than done, especially without connections in the music industry. Large labels may have more of a proven track record, and will often require little to no effort from the artist. However, big record labels will also desire more money from artists and other contract requirements that may be determinantal to the musician long-term.


Small Labels

The arguably more feasible option is to work with a small, independent label. Although they may have less of a track record, these labels typically also have less restrictions than major labels. Small labels can also provide more focused care, and they may be more willing to take a chance on an unknown artist.


One independent label is iSpyTunes, as we are always looking for the next great musician. We can offer short-term or long period record contracts for master recordings of music publishing, at flexible rates.


If you think your music could be the next big thing, submit a song of yours on our website, or message us directly at contact@ispytunes.com.


What can make a recording contract bad?


independent musician with a bad record deal

Recording contracts (or record deals) are notoriously complex, and it can be difficult for artists to understand all of the terms and conditions. Unfortunately, this often leads to signed agreements that are not in the best interests of the artist. Common issues for artists may include a lack of creative control, low royalty rates, legal repercussions, and copyright issues.


Creative Control Issues

One common problem is a lack of creative control. Many record labels require artists to adhere to specific genre guidelines or to produce music that is radio-friendly. This can limit an artist's creativity and prevent them from exploring their full potential. Or, an artist may want to release their music, but the major label will halt or slow the release of music to build hype and maintain status.


Royalty Robbery

Another issue is the royalty rate. Record labels typically take a very large percentage of an artist's royalties, leaving the artist with very little income. This can make it difficult for artists to support themselves, especially if they are just starting out. Or, when they grow they will be disappointed the company is the entity earning more and more money while their revenue remains relatively stagnant.


Legal Repercussions

When signing a contract with company in the music business, it is important to read all the fine print. There can be serious legal repercussions if the musician wants to switch the production style or distribution deal, and they are locked into a certain path. Lawsuits are fun for no one.


Copyright Headaches

Some record labels own the rights to an artist's recordings, so even if the musician leaves the label, they may not be able to release their music elsewhere. These issues can make recording contracts bad for artists, so it is important to be aware of them before signing any agreement.


What should I look for in a record deal?


what to focus on when signing a recording contract

What should you focus on when looking for a deal? Here are eight major factors:

  1. Recording commitments.

  2. Creative choices.

  3. Advancements.

  4. Artists & royalty.

  5. Music Video Budget.

  6. Copywrite Terms.

  7. Exclusivity.

  8. Features & collaborations.

The owner of the land has a right to own the land. Make sure your sacrifice is worthwhile, and be sure to consult with an expert before signing to an industry label.


If you have interest in signing with iSpyTunes, learn more about our offers to support independent musicians here.


In Conclusion


As an independent artist, you have the freedom to create the music you want, without having to answer to anyone. However, there are also a few drawbacks to going it alone. Similar to dating someone, when signing record contracts there are more responsibilities and opportunities for growth.


record label music video editor

By signing with a label, you can get access to their promotional resources and industry contacts, which can give your career a major boost. Of course, there are also some downsides to consider, such as giving up a certain degree of creative control.


As a small artist, often signing with a smaller label may be easier and more beneficial. Before agreeing to a record deal, make sure you understand the terms of the agreement and that you are comfortable with the arrangements.


There are many different types of record deals, and the terms of each deal vary depending on the artist's career stage, musical genre, and level of success. While a record deal can be a great way to get your music career off the ground, there are also some drawbacks to consider. Continue to master your craft, and eventually, that is how to secure record labels attention and land yourself a deal.


Funny enough, the term "record label" is so old that it refers to when music was still enjoyed on phonograph records. These discs are far from relevant in our digital streaming age, and likewise, record labels are less relevant than ever. More modern solutions like iSpyTunes are able to help independent artists garner a fan base with expert marketing and management options.


Reach out to our company today, for some of the best music industry services for independent artists. We have both free and paid options to help take your records to the next level, browse our website today!

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