Relationship Between Artists and Record Labels

Musicians are responsible for creating their own products, but the distribution of their work is the job of a recording label. They do this buy distributing recorded music to "Big Box" retailers like Target and Best Buy as well as through digital platforms like iTunes and Spotify. This allows artists to have their work reached by many more people and helps them gain publicity. However, there is an agreement between the artist and recording label that allows the record label to take a large percentage of the artists income.

Similar to as we learned about sports, the two must sign a contract that expires over time. The length of the agreement comes in different options. The First Contract Period continues either one year from the date of agreement or six months after the Record Label releases an artist's album and it must be renewed afterwards. With this deal comes some requirements. Artists are expected to release one album with each Contract Period containing twelve tracks, with a total of 75 minutes. Unless it is allowed by the Label, artists must not record performances in fulfillment of the Recording Commitment that is not recorded in a recording studio, instrumental performances, solely speech or spoken word, not in the English language, remixed/re-edited, bases on an overall theme, or performances of more than one composition. This gives artists very little room for creativity when it seems like their record label is controlling them, and when it is necessary to have your actions/ideas approved.

There are "recording funds" for albums that are subjected to a minimum of $50,000 and a maximum of $70,000 for each album, however, they are open to negotiation. Artists are expected to pay an additional advance of recording costs to ensure they will fulfill their obligations to the label. Record labels are expected to pay artists 1/2 of each recording fund and can be paid to artists within a month of the delivery of each completed album to the label. The minimum amount is seen as a price floor while the maximum is a price ceiling.

It can be challenging for artists to know how much money they are actually making when it comes to todays digital music streaming. Subscriptions like Spotify and Apple Music, where the consumer is not paying for individual songs, means that the subscription companies generate more revenue while artists make less than they would selling songs individually.  However, artists are more likely to have their songs listened to when consumers have access to millions of songs instead of just what they buy.

I think that it is crucial for artists to sign with record labels in order to gain the publicity required to make revenue. Without it, it can be very difficult to advertise your music and gain new listeners. However, it can be a risky business for recording labels. If artists do not generate much revenue, the money that record labels invest in them can go to waste. This is made up for when labels sign big time artists, who bring in lots of revenue allowing the recording labels to make a fortune.

Sources:
https://www.tunecore.com/blog/2017/05/artist-record-label-relationship-look-standard-record-deal-part-1.html
https://www.rollingstone.com/music/music-news/the-new-economics-of-the-music-industry-234924/