For musicians and songwriters, there is no greater feeling than signing a contract with a label or publisher. This is the life goal of most musicians,
For musicians and songwriters, there is no greater feeling than signing a contract with a label or publisher. This is the life goal of most musicians, but something that only a small percentage are able to achieve. While it is certainly a cause for celebration, there are a few things to be aware of and consider before putting pen to paper. Keep reading to find out more.
Types of Music Rights
First, you need to be aware of the two different types of music rights. These include:
Master rights: The actual sound recording. The controller of the master rights determines how the recording is used and who profits from it.
Publishing rights: These refer to the composition of the piece, such as the lyrics and melody. Generally, publisher rights are owned by the songwriter or publisher.
Before signing, you need to be aware of the important distinction between these rights and understand who controls the rights to both when signing a contract.
What are Royalties?
Royalties are an area that can often cause confusion for musicians and songwriters when signing their first contract. Music can generate royalties in a few ways these days, including:
Mechanical royalties: These refer to money earned from physical and digital sales (CD sales, vinyl, downloads, etc).
Public performance royalties: Earned when your music is played live, in public spaces, and on the radio.
Sync royalties: Royalties earned when your music is used in adverts, films, TV shows, and games.
Digital performance royalties: Generated from music played on non-interactive digital platforms, such as internet radio.
Who Receives Royalties
You must also have a strong understanding of who receives royalties and what the split is before signing a contract. Royalties are generally split between:
- Recording artists (often through master rights)
- Songwriters (through publishing rights)
- Record labels (who usually own the master rights)
- Music publishers (manage and monetize publishing rights)
Why Ownership Matters
Ownership is a hugely important consideration for any musician or songwriter. By keeping your own masters, you have complete control of how your music is used and can license it directly. It is common for labels to ask for the rights in exchange for promotion and distribution, which can be hugely beneficial, but keep in mind that you could be limiting your earning potential. By retaining publishing rights, you can collect songwriting royalties and negotiate licensing deals on your own. Keep in mind that there are also resources available for financing and funding your work.
Key Contract Considerations
Before signing a contract, you must always consider the following:
- Royalty splits: How will the royalties be divided and are there hidden costs or clauses?
- Rights ownership: Who owns the masters and publishing rights?
- Agreement duration: Is the agreement for one project or multiple years?
Hopefully, this advice will be useful for any musician or songwriter looking to sign with a label or publisher and help them make an informed decision.
