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Music biz question: how does it work when you sign with a label?
Old 1st June 2019
  #1
Gear Maniac
 

Music biz question: how does it work when you sign with a label?

And is it different today, then in the 70s, 80s, 90s?

Someone told me the basic way it works, and I wanted to see if this is true, because honestly, I have no idea if he knows what he is talking about.

Of course, not all deals are the same, but in essence, this is theoretically how it works.

Band gets signed to label. Label fronts money for album, which it then recoups from album sales. After the label is done recouping, band gets cut of album sales (known as mechanical royalties, I think?), and that continues in perpetuity. Is that predetermined, or negotiated?

Label gets the publishing, and writers in band get writers, so when a song airs on radio, the label gets the publishing royalty stream, and the members of the band who are on the cue sheets get the writers royalty stream.

Sync fees are split 50/50 - when a movie studio wants to use the band's song in a new film, it pays x-dollars as a sync fee, and the label gets half, and the band gets half.

Is that about correct, and am I missing anything?

Thanks!
Old 3rd June 2019
  #2
Old 11th June 2019
  #3
In a nutshell and IME yes, but it varies.

In many regions, there’s also performance royalties - wherever the song is played/sold, there’s a royalty that goes to the performers.

The splits are determined by who the band is, how much the label wants to sign them, and prior success.

Also now the licensing deal is much more common. Band records their own album, and licenses it to the label for a period of time. The splits are much more beneficial to the artist then since there’s no upfront recording cost, and they never actually lose ownership of their own recordings.

I believe marketing is or at least can be a non-recoupable cost too.

The label sees nothing of the publishing. The publisher signs the writers to a publishing deal, and it’s like the record deal - the publisher takes 100% til recouped, then a 50/50 deal with the writer is usual.

And of course many writers don’t have a publishing deal and rely on the PROs to handle collecting the publishing royalties.
Old 2 weeks ago
  #4
Gear Maniac
 

Thanks^
Old 2 weeks ago
  #5
Gear Head
 

So your question is how many different ways does a Band/Artist get paid?

In that case you're missing several keys.

Like publishers, booking agencies are third party entities completely separate from labels.

They broker with promoters all over the World (literally). Everyone from the big time festival/stadium/arena people to colleges/high schools to the local dive bars & clubs. Even parents. When I worked at one in the 00s, we would often get requests to book Birthday Parties, Family Reunions, Weddings, and even Funerals. Keep in mind that concerts and tours are only a small subset of Musical Events. I could go keep going for days...

The second major one would be the manager. Besides handling an Artist's overall business, a good number of deals come through their management. The company I work for now, we generally get 100 requests a week from unsigned artists seeking features which are easier to fulfill since they can be recorded remotely. In addition to actual vocals most Artists are involved in Production/Songwriting to some degree and get hired all the time to do independent projects.
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