When most people think of getting a recording contract they imagine large sums of money thrown their way. Fancy clothes, expensive cars, and tract mansions on hundred acre lots all come to mind. This is what the recording industry has trained you to imagine, they have stock in perpetrating the illusion of success by their artists. If you really knew that artist was living in a rented house with a leased car and had nothing in his bank account to show for it would you be as impressed?
The most common artist deal that exists is a development deal. When an artist gets 2 million dollars the record company doesn't just cut them a blank check and say "get to work writing hits!"
The cold hard truth is the second you sign that contract you are no longer you, you have become *artist name here* and you are now an asset of the company you sign under. You waive all right to determine how you are to be marketed, how you will dress, what type of music you perform, and everything else you use to be. You are there to generate profit and if it becomes apparent at any point that you are not willing to play ball they will drop you and leave you owing most if not all of the investment they made on you.
See, the money is a loan for your development as an artist, it is not a blank paycheck. This money covers ALL expenses you might incur for a set number of album releases, time, or a combination of both. By signing a 2 million dollar deal you are basically saying "I believe I can generate 2 million dollars in capitol from my album sales" and placing a bet upon that with the record companies money. Even worse, YOU HAVE LITTLE SAY IN HOW THIS MONEY IS ALLOTTED!
Here is how people lose their shirts in the music business. I sign a 2 million dollar deal with Sony. They set aside 2 million dollars for my development that is to last 2 albums. The manager decides what money is spent where, and EVERYTHING has to come from this allotment - recording, design, advertising, videos, touring costs,wardrobe... everything. In essence this is money you borrow from the company, not money they pay you, except THEY control how it is spent - not you. Almost all of the time they use expensive in-house companies for design, marketing, studio, and legal that charge more money than if you were to shop around independently. Its in essence a no-bid contract for all the technical aspects of turning you into a marketable star.
What happens first is you get put up in a nice rented house, get you on a lease for a decent car, and supply you with a decent wardrobe budget - it is important for them to sell the illusion that their artists are well off. Nobody wants to pay money to see someone who lives in an apartment, dresses like a bum, and drives a 92 Accord, so they make sure you look good and appear to be doing reasonably well. They also give you a small per-diem allowance that serves as your paycheck basically, for which you buy food, toiletries, and anything else you might need from day to day.
So I've signed my deal, I am living in my rented house driving my leased car and wearing my new wardrobe thinking this is pretty good. Now it comes time to get in the studio. I am use to using my buddy to do recording and production - he owns a very nice studio and does my projects for cheaper. My handler tells me I am no longer using his production studio because we can use only in-house studios - it's in the contract. While we are in the studio it takes much longer because the A&R agent doesn't like my new material and wants me to change some things. I am not happy about it but I reluctantly agree. It takes me three times as long to record my first single, and I am getting charged hourly at a very high production cost. Of course they don't tell me this at the time because I am not the one in charge of managing my own budget and have no legal say so in the matter anyways.
So I have my first single done - it's not exactly the same as what I was putting out before but it was the best compromise I cold come to. They take some more money out for advertising on radio, print, and television then schedule a tour to promote the single. While I am on tour they have professional sound, lighting, roadies, buses, and booking fees. I am playing slightly better venues than I was before (still no arenas) but it is getting a buzz about my single in new markets. I am not happy that several key cities I have a fan base in are skipped, and some of these new cities do not take to my style of music and I bomb there terribly. My handlers tell me that these are key concert demographic cities and the tour stops are not my decision.
So I am done touring and have generated some buzz across the country - some shows went over bad and some went pretty good, but overall I am just happy to get paid doing what I love. Now it's time to sit down in the studio and complete the album. This process takes forever - the handlers want me to do certain different types of tracks I am not use to. Even though the album is only going to be 16 songs, I have to record over twice that many, some are leaked as promotional, some are finished for the album, and some are scrapped. I can't even release my favorite song because it was shelved and the record company doesn't want that song representing me as an artist! They decide some of my lyrics need touching up, so not only am I being charged huge studio fees for large chunks of time, but I have to pay for editing and co-writing. I try and get everything done quickly because it has been many months since my tour has ended and potential fans are starting to move on to the next thing.
So finally we agree on a tentative track listing - there are about 25 or so songs they are going to pick from to make the final album. The release date is set and the industry begins the design and marketing of the album. Photo shoots are scheduled with expensive in house studio photographers, pricey design teams work on album art and promotions, and even more money is pumped into radio and TV to hype the album release tour. This tour is a mixture of smaller concerts, promotional appearances, and on air interviews. I don't like the direction I have gone and my old fan base is angered that I have done 2 tours back to back but failed to appear in their region. I am really just trying to get all of this out of the way as fast as possible, but they are having me stop at the most inane local radio shows that have nothing to do with my fan base. I have to record hours of promotional "drops" for people and shows I have never heard of nor met, all while pretending to be their best friend.
So finally I am done with the album promotional tour and ready for the release... until the handlers tell me there is a delay. They didn't feel enough of the songs we recorded were marketable enough and had to bump the release date back several months. They tell me we have to change direction; the music I was making when they signed me isn't as popular and they need to soften up my image to appeal to key markets. I tell them that I do not agree with changing direction and want to go with the songs we had agreed upon. They tell me if I am not marketable then the project will have to be put on hold, and that it isn't my job to determine how or where I am marketed. Not wanting to be shelved, I reluctantly hit the studio again.
This time I am doing a genre of music I don't even like! I have lost almost all of what made me "ME" as an artist and my original fan base is all but gone. My new audience is not one I originally intended, and they don't seem to care if it is me on stage or someone else who looks similar and sounds similar to me. I am still racking up huge studio fees, plus now they have to put even more money into re branding me as a different style that appeals to a different audience. I just want to be done with this first album and get my head collected, but there is a new series of promotional appearances for all sorts of radio and TV shows I never thought i would be involved with. They are presenting me as something I am not, nor ever intended to be, but I have no choice if I want my album to come out.
Now, sadly for many artists their journey to fame and fortune ends here. They can not come to an agreement with the record company on what direction to go, or they just plain aren't able to do what the executives ask of them, and they are shelved. What this means is their album project is cancelled, all assets are liquidated, all fees are paid off, and the artist is left holding the bill. You lose the leased house, the leased car, the per diems stop coming, and all royalties for the singles go towards paying off your contract. YOU ARE STILL UNDER CONTRACT UNTIL THE MONEY IS PAID OFF NO MATTER WHAT! You can not sign to another recording contract until the full amount is recouped - that means the only way to get another deal is to buy yourself out to the tune of 2 million. You are in essence blacklisted from the music business, as no major is willing to buy out a contract for an artist that has proven unable to recoup. If you record an independent album all profits are legally required to pay off your balance FOR LIFE! YOU CAN NEVER PERFORM AGAIN WITHOUT GIVING ALL THE PROCEEDS BACK TO THE RECORD COMPANY YOU SIGNED WITH!
Getting shelved before your album release is very common, and it basically leaves your entertainment career dead in the water until you are bought out. Even if you DO put your first album out, chances are you will be dropped before the second album, and unless you get significant Top 40/ Hot 100 chart numbers you won't be putting a third out. There are countless artists I see every week who put out one or 2 albums, then fade into obscurity. A best case scenario is that they broke even and recouped, then kept enough of their publishing rights to get a very small royalty check. The very few that DO make stardom have to get very significant Top 40/ Hot 100 play, and even then only the biggest of superstars live in luxury - it is almost a cliche to see stars of the past penniless on some "where are they are" show.
Getting a multimillion dollar recording contract is not all it is cracked up to be. The expenses are quickly piled on, you lose all control over yourself as an artist, and the odds of you just breaking even are very bad, much less striking it rich enough to keep any real equity. This is why I suggest to people to keep it independent for as long as possible. By staying independent you can dictate how you sell yourself - after all you are the "product" that is being sold. Stop seeking "record deals" and focus on generating a very solid fan base. By showing the majors that you can operate independent of them it raises your chance of getting a PRODUCTION DEAL (which I will discuss next), which is every independent musicians real goal. This signs you are a studio and allows you to do separate projects, in house production, and leaves you with control over how you market yourself. After all you are the one doing all the work, shouldn't you be the one making all the money?
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