Major label standard operating procedure
By industry definition, a major label is a label that commands a high percentage of the annual sales of records, and has their own distribution system. (THE Big 5 distribution companies currently are: WEA, BMG, SONY, UMVG, and EMD). When pursuing a major label deal be absolutely sure that this is what you really want. Here are some points that might help you determine if this is the right thing for you to do:
Options
A major label often signs artists for six to eight records (not years). A&R Research the A&R person know whom they’ve signed, who they’ve worked with, who they’ve worked for, and how long they have been employed.
Number of releases
Find out how many records the label releases per year. You don’t want to sign with a label that releases too many records. Remember, they only have so much time and enthusiasm to put into the promotion of each record. Many major labels have between 12-25 releases coming out each month.
Here are some clauses that you will encounter (and sometimes have to watch out for) in a contract with a record label:
Exclusivity
Every record contract includes a provision stating that the deal is “exclusive.” In other words, during the term of the agreement, you can’t make records for anybody else. Therefore, an exclusivity clause in a contract refers to the fact that you may only contract with this record company (you are “unilaterally married” to that company.) I strongly recommend that your attorney define the extent of exclusivity.
Term
The duration of the contract. (How many records? Any time constraints?)
Product/Creativity
Who will control the amount of product and the quality of the product? You always want as much creative freedom as possible; the record company often maintains a veto power when letting a band choose the producer, engineer, studio, etc.
Recording costs
HOW MUCH (RECOUPABLE) RECORDING MONEY WILL YOU GET? DON’T OVER DO IT! REMEMBER, YOU WILL HAVE TO PAY IT BACK FROM YOUR ROYALTY RATE AS APPLIED TO ACTUAL SALES.
Advances
How much (living) money will you get that is recoupable? What about other advances, such as videos, and touring? Remember, you will have to pay back that amount to the label.
Royalties
The money paid for your service as recording artists. Outside of U.S. is calculated differently. (Canada: 75–90 % / UK, Japan, Australia: 60–70 % / Rest of the world: 50 %–of U.S. rate).
Video
Who controls the music video and how the costs are apportioned. Try to have only 50% of the cost recoupable.
Publicity
The label will need your permission for name, likeness and voice in order to publicize your record. Also, ownership of your website URLs may also be a point of negotiation.
Merchandising
Same as with Independent labels
Union
Your promise to join a union (AFTRA, AFM).
Auditing
Your right to audit the books. Make sure this clause is included in the contract.
Accounting
The label’s responsibility is to report financially to you (reports to artists usually occur every six months; i.e., if an accounting period lasts from January till June, the label will report to the artists approximately in September).
Assignment
The record company’s right to sell the contract. Majors sometime shuffle acts around from one affiliated label to another within their family of labels.
Controlled composition
How the label will pay mechanical royalties. Standard practice is that the label will only pay on 10 songs on your record, and at 75% of the current statutory mechanical license fee. (As of 2002, 8 cents per song, per unit sold.) This rate changes every two years.
Termination
This clause specifies the songs you may not be allowed to record for a set time after the ending of the contract.
Sideman’s clause
You might want to consider including a sideman’s clause. A sideman’s clause allows an artist to do studio work. The artist still needs permission from the record company; they however, can’t say no unless they have a very good reason. Under normal circumstances — without such a sideman’s clause — you would be prohibited from performing for any other band/label under the terms of an exclusive contract. If you have a sideman’s clause in your contract, make sure all members of your band sign the document.
Key man clause
If a significant label executive resigns, or leaves the company, you may terminate the deal. The label may also put such a clause in concerning a band member.
I hope this information was useful for you. Knowing some basics about the realities of recording contracts before you get involved with them can save you a lot of grief down the road. Remember, record company lawyers have a reason for every clause in their contracts—so should you. when a record label A&R, music manager, music publisher or music producer states that they only accept solicited material this basically means that you need to ask permission to send a package. Simply mailing them your demo & promotional material in high hopes that they will listen to your music is not likely to be successful, although this strategy has worked for some artists in the past. Making contact with your intended music industry professional & making sure that they are expecting your package seriously increases your chances of being heard. You should definitely make contact with those that accept unsolicited material to make sure that they are expecting your package as well. You should always call first before submitting your material. This will ensure that your package will get priority over another unsolicited package.
You don’t have to be a famous music mogul to be solicited. When speaking with A&RS, managers, publishers & producers you must be extremely professional even when you are speaking with an assistant. These people are responsible for filtering out calls from amateurs. The important thing is to build a relationship with everyone you come in contact with. Find out the names of everyone that you come in contact with. Ask them questions like who they have worked with in the past & what styles of music they prefer. It is much better to pinpoint A&RS, Managers, producers & publishers that work in your style of music. Don’t waste your efforts! Always be ready to explain who you are & what you are doing. If you have a website with some music clips the manager or label will tend to listen to what you have to say. Don’t ever call a record label like a rookie & start telling them that you are platinum & whatever. These days the most important thing an artist can have is a website. When calling record labels it is extremely important to make friends with assistants, secretaries & receptionists. Ask them if they will accept your package & listen to your music. You may even be doing them a favor by entertaining them for a few minutes. Remember that some people who work at record labels are just doing a job & sometimes don’t get the money or respect that they deserve. Try & light up their day with your upbeat personality. If you want to be in the music industry you must be able to handle rejection as well.
If I get negative results when trying to speak with someone it only makes me more persistent & determined to prove to them that I am important. Don’t be surprised if people are rude or a little hard to deal with, this is the music business. Sometimes you may have to kill them with kindness. At least if they hear your name & listen to your music you made a new contact in the music industry. When an assistant answers the phone you should already know what you are going to say to him or her. Don’t sound anxious or be overly aggressive. Think of the assistants, receptionists & secretaries as a filter.
The warning no unsolicited material is usually used so that record companies don’t get swamped with submissions. It’s not that A&RS & Managers don’t want to listen to new material. It’s more like they don’t have the time to listen to everything. If a record label hasn’t heard of you yet you should always give them a call first. When your package is solicited it gets priority over something that is not solicited. This doesn’t necessarily mean that they aren’t going to listen to your music at all. Most record labels do have people that listen to unsolicited material. It is usually an assistant A&R or an intern. Other companies may throw unsolicited material away or send it back to you. It is a known fact that a lot of huge artists where discovered by someone listening to unsolicited material.
Record Labels, music managers, music publishers & music producers get a good number of packages each day. When you call them to let them know that you are going to send a package, ask them for some kind of code that you can write on the package so that they know it is solicited. I’m not saying that this is standard practice by most labels anymore but they will still do it. Another great way to ensure that your package will get reviewed is to have a messenger deliver it. I know it is expensive so only use this tactic when your odds are good. Only use this strategy when your intended target is looking for an artist or producer with your characteristics.
