Let’s face it, the music business is still a hotbed for sharks and crooks. Don’t blame the big ones, look at small business operations who cash in on musicians’ naivete, left alone those who know right away they will cheat a little here and there to make ends meet. I know countless musicians who have been ripped off by their labels, distributors or managements. But is there anything you can do?
Doubtful sales reports, late payments (if at all) and lame excuses. We have heard it all before and yes, it happens all the time. While you cannot convert a crook into a honest person, there are a few measures you can take to work in your favor. If you are signing a deal with a label, distributor or any middle man (like a manager), it’s in the contract.
The legal disclaimer
Okay, I am not a lawyer and I do not provide legal counsel – I just share my experience and knowledge which I have gathered over many years in the business.
Set a Release Date
In order to avoid your record will gather dust on the company shelves while your rights are being blocked, include a date at which your album will have to be released in physical format and shipped to stores (it’s too easy for the label to just put a sales link on their website and thereby justify a “release”). If the label doesn’t meet that deadline all rights will revert back to you. Make that clear and don’t be afraid to ask for it. Again, this is common practice.
Reports and Payment Schedule
Believe it or not, many small record labels or similar label services do not provide any language about sales reports and payments in their contracts. However, it is simply common practice to state clearly when and how payment should be rendered and how a seller will provide evidence of units sold.
So make sure you ask for appropriate language about accounting periods and payment terms, for example quarterly or bi-annually payments within 30 days following the preceding accounting period.
Also be sure to clarify in writing how sales reports should look like. Best for you as an artist would be a broken down report that shows which distributor or wholesale company sold how many copies. I work with a distributor who provides stats about direct to customer sales as well as Amazon sales (where the percentage is a bit lower).
Especially for a first edition it is good to agree on a particular quantity of physical records to be manufactured or, as an alternative, be shipped to the label . This way you can make sure the label really believes in you while in addition you are now aware of their inventory.
Now it often happens that a label reports only a few sales while the remaining copies have somehow gone down some mysterious “promotion channels”. In order to avoid this scam, agree upon a certain number of copies used for promotion in writing. If the label is supposed to start with 500 copies and uses 100 for promotion you now know there are 400 copies remaining for sale.
Any serious music promoter will not only supply you with a list of all the media she has sampled with your music, she will also provide evidence, be it weblinks to reviews and interviews or photocopies of printed reviews. Yes, this is how serious music promotion works, forget anything else. Ask for detailled reports. Get it down in writing.
Buy back / send back Option
Especially if you work with distributors and you are the one to supply the copies you should include an option in your contract that allows you to ask all remaining copies be sent back to you (at your expense, which is okay) upon request after a certain term (e.g. 12 months) or – if the label manufactured the discs – to buy the remaining stock at wholesale price, maximum.
Why do this? First, if the label fails to sell you can get your stock back and use other avenues. Second, if you believe the label’s sales reports are wrong you can ask for the remaining copies. And this is where the truth can come out:
They got 500 copies of your record and used 100 for promotion. 400 remain. Now if they report 50 sales they should be able to show the remaining 350 copies. If they can not, you know there’s something wrong. But this time you are in a stronger position than you will be without having made any agreements about quantities and return options.
But what if they won’t let you?
Contracts are there to be negotiated and drawn individually. However, I know well that many labels, distributors and other services are not willing to amend their contracts and come up with all sorts of excuses. “If everybody asked for a differet contract we’d have twice the work”. Or “I cannot make changes to the contract without consulting my lawyer, who will charge me way more than I will make selling your stupid record”.
It is all shit of the bull. You do not need a lawyer to fill in a date at which payment is due. Besides, such provisions are standard and should be there right from the start.
So if the label you are dealing with does not concede a little it is simply time to move on. Otherwise you would be giving them too many options to cheat. They do not necessarily have to – but most of the time if their contract is unfavorable and they are too stubborn chances are rather big they will “exercise” their options.
Don’t sign a bad deal just because it’s the only deal you’re being offered. Move on.
This week is the last opportunity to register for the MusicBiz Madness Conference in Frankfurt, Germany on October 11, 2015. Get all the information here.
To your success – Julian Angel
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