LET THE SIGNER BEWARE
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