Understanding Artist Recording Agreements: 5 Key Points!

For every record label (or record company), entering into an artist recording agreement with a musician is the first step into realizing its services which encompass producing, distributing, and promoting music recordings as well as managing the artists. An artist recording agreement helps to establish a clear framework and mutual understanding between the artist and the record label, outlining the rights, responsibilities, and expectations of the parties. This helps to prevent situations such as uncertainties, conflicts, or costly legal battles.

In this article, we wish to highlight the following 5 key points which you should take note of when entering into an artist recording agreement:-

  1. Term of the contract
    • This is essential in an artist recording agreement as it defines the period in which the artist is exclusively bound to the record label. The term outlines the duration of the partnership, thus providing clarity on the parties’ respective obligations and rights which are tied to a specified timeframe. Therefore, the artist shall work in a timely manner.
    • Additionally, the term of the agreement can be specified either in the form of a time term, e.g. 2 years period, or in work terms, e.g. upon releasing 2 albums.
  2. Intellectual Property Rights
    • This clause is vital as it affects the business of the company. Normally, the copyright of master recordings (the original recordings) is assigned to the record label. Having possessed the copyright allows the record label to use, distribute and reproduce the recordings and such right survives termination. Therefore, record labels may continue to earn more even if the agreement has lapsed.
  3. Advance and Royalties
    • An advance serves as an upfront payment to the artist to financially support them during the production and promotion of their music recordings. After the successful release of the music recordings, any royalties earned by the record label through licenses, streaming, downloads, and sales will be shared with the artist. The advance is later recouped from the artist’s share of the royalties.
    • Having said that, clauses on advance and royalties are essential to establish clear financial terms between the parties including the royalty rate.
  4. Exclusivity Clause
    • An exclusivity clause prevents the artist from recording for other record labels during the term of the agreement. This clause provides security to the record labels as they have invested a significant amount of money in their artists. As such, they should be recouped accordingly considering the amount of time, effort, and money that they have invested.
  5. Termination Clause
    • The termination clause provides an exit option for the parties. It helps to safeguard their interests, particularly for the record labels, in the event of termination by the artist. This is where record labels place emphasis on the artist’s liability to reimburse any advance payments provided in connection to the artist’s livelihood and expenses invested in recording, production, marketing, and other related costs.

Disclaimer: This article is for informational purposes only and does not constitute any legal advice. If you have any questions, please contact us directly