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owned the copy­right in th­ese works as the au­thor thereof. Whit­ney Hous­ton did not write or own the rights in the mu­sic she per­formed. At the time of her un­timely pass­ing in 2012, her es­tate was ru­moured to be in dire straits: $20m in the neg­a­tive.

The above rep­re­sents only some of the ma­jor is­sues an artist should con­sider when there is a pro­posed record­ing deal on the ta­ble.

The ef­fects of a writ­ten agree­ment may be long-last­ing — long enough to ef­fect an en­tire record­ing ca­reer and be­yond. Artists should also bear in mind that record la­bels de­pend on find­ing and cul­ti­vat­ing fu­ture stars al­most as much as they do on main­tain­ing suc­cess­ful agree­ments with ex­ist­ing, signed stars. Prof­its gen­er­ated from suc­cess­ful acts are of­ten spent in the pro­mo­tion and devel­op­ment of new tal­ent. Arista Records, the first la­bel to sign Whit­ney Hous­ton in 1983, an­nounced an in­crease in gross an­nual prof­its from $35m (when sign­ing Whit­ney) to $400m in the nineties, largely due to this star’s suc­cess. This un­der­lines how im­por­tant a com­mer­cially suc­cess­ful act can be to a record com­pany.

The bot­tom line is that artists and record la­bels are in­ter­de­pen­dent on each other. If a la­bel is not in­ter­ested in en­gag­ing in earnest and mean­ing- ful ne­go­ti­a­tions with an artist in or­der to ad­dress the con­cerns of both par­ties con­cerned, the artist would be well ad­vised to head for the door, rather than reach­ing for the pen.

Record­ing com­pa­nies have adapted their busi­ness mod­els in the wake of the dig­i­tal and on­line revo­lu­tion and the ram­pant ef­fect that mu­sic piracy has on le­git­i­mate record sales. Nowa­days they seek to gain a more com­pre­hen­sive com­mer­cial in­vest­ment in an artist far be­yond a tra­di­tional record­ing con­tract.

Artists should also adapt their busi­ness mod­els and ed­u­cate them­selves on their rights and po­ten­tial rev­enue streams. Seek­ing ad­vice in this re­gard from in­dus­try ex­perts and IP lawyers is a good place to start — be­fore pen­ning any deal.

A well ne­go­ti­ated record deal with a ma­jor record­ing com­pany can el­e­vate an artist to the high­est lev­els of com­mer­cial suc­cess as a ma­jor stu­dio re­mains a jug­ger­naut of the mu­sic in­dus­try with the fi­nan­cial, mar­ket­ing and strate­gic means and know-how to es­tab­lish and main­tain a star in a very com­pet­i­tive in­dus­try.

For some artists, how­ever, a deal with a ma­jor may not be as im­por­tant as a deal with an in­de­pen­dent record la­bel which could al­low for more cre­ative con­trol and IP own­er­ship.

Record­ing com­pa­nies … seek to gain a more com­pre­hen­sive com­mer­cial in­vest­ment in an artist far be­yond a tra­di­tional record­ing con­tract Record la­bels seek to ac­quire the right to ex­ploit orig­i­nal mu­sic com­mer­cially for the du­ra­tion of the copy­right therein


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