On september 2020 Kanyee West tweeted 196 angry tweets shining a light on a problem long ingnored by the music industry: how high are the stakes for anyone signing a contract with a record label.
Oftentimes, artists who are offered a label contract are too excited because this mean they usually “made it” and forget that they are signing a legal document that could have a huge impact in their carreers and lives. Same goes for music producers contracts.
Kanye started saying that contracts need to be simplified because they are usually written in complex, legal jargon and makes it difficult for people other than lawyers to completely understand them. This tweet thread then completely blew up and he even called the music industry “modern day slavery”.
How does money flow in the music industry
When we think about a movie, we instantly understand that there are hundreds of people responsible for the making of said movie. From the actors, writers, directors, musicians, port-production, etc. We also generally understand that the copyright for the whole of the work belongs to the person or company that paid to hire all those people and took a risk betting on its success. With music artists we tend to associate the material produced with a single person or, at most, a band, but in reality it works in a similar way for all major artists and labels. Both artist’s contracts and music producer agreements also play a role in the whole legal scheme of things.
To put it simply, the money that a song earns is split in two: on one hand you have author’s rights and then master’s rights. Owner’s rights is attributed to whoever composed and wrote the song; but once that song is recorded in a studio, that finished track belongs to whoever paid to have that song recorded and mastered, usually the record label; these are master’s rights.
Performing artists usually get paid a percentage of earnings, or royalties. A lot of artists don’t know this or ignore it and then come to the ugly truth only after they’ve signed their contracts.
This final recording file, is called the “master” and it’s how the final song, song, sound, or performance sounds and will sound wherever it is played.
Kanye’s rage began when he found out he wasn’t the owner of his master recordings.
The master recording
A master recording is usually made when an artist goes to a recording studio, records their songs with a team of performers, sound technicians and producers; and then is mixed until a final version of that project is ready.
In the old days, this would be a physical vinyl record that was used to make all the other copies. In the digital age, this file is a sacred .wav file that will be used everytime the song is played. The one paying for all of this is usually the record label, and it is the owner of said master. This is a product that they paid to have made and now they’ll want to maximise their profits on said product.
The owner of the master can choose where, when, and how a song is played. It can be streamed on Spotify, YouTube, make a CD, used in a movie or videogame, or wherever they see fit.
Depending on the contract, the songwriter owns only a portion of this product, and it has no say in how it will be used. The producer agreement can also have varying degrees of credit and control.
Many famous artists never learned this harsh truth until it was too late. The Beatles never owned their own songs, and most recently I’m sure you’ve heard about Taylor Swift’s battle to reclaim hers.
It is very important to learn to navigate the money flow in the music industry so you don’t get caught in a disadvantage if you ever sign a producer agreement or contract with a label, or with anyone for that matter. Many of these artists didn’t realize it until the contracts were signed and were compromised for 20 years or more in a terrible situation.
If you composed a song, that can only be done once. But that same song can be recorded thousands of times, and that’s why record labels try to protect their product as much as they can, often by adding clauses in the contracts that forbid re recordings of songs owned by them.
Curiously, this means that many artists who played their songs from their houses and livestreamed on social media for their fans during quarentine, were breaching contract if they included a non-rerecord clause in them. Absurdly as that sounds, this contract clause means the songwriters can’t play their own songs and get directly paid for it.
Now, I feel Kanyes outburst was more a marketing stunt than anything else, but it does shine a light on a problem that most music artist face: on average, musicians only take 12% of whatever an album made.
So you’ve been offered a producing contract, now what?
First of all, don’t rush and read the producer contract in detail. Whenever possible, review whatever you’ll sign with the help of a specialized lawyer who keeps your best interest at heart. You can always negotiate and change things around until both parties come to an agreement. Remember to keep those changes on paper too.
If you feel uncomfortable at any point, don’t sign it. The world isn’t going to end, and you’ll be happy you didn’t sign your life away.
During the negotiation, the amount of rights you give to the label will vary in amount and time. The tricky part is that if you grant a label less rights, they’ll put less money in your album and career. Read carefully and choose acordingly.
However, as technology advances, suddenly producers and artists don’t need record labels anymore because anyone can make hits just from their home studio and independant marketing efforts with social media. Just like big corporations started in a garage, you too can start your big carreer in your bedroom. This is a huge rock in the shoes of record labels becaus why on earth would you sign away your rights for just a portion of the profits when you can keep everything yourself?
If you’re going to be your own publishing label (so to speak) then it’s crucial you mind the legal aspect of music making, collaborations, promotions and all the other subjects that are important to retain your rights over those beats that you’ve put your blood, sweat and tears into.
Get your music producer license and contracts right
Just as labels detail how and when an artist’s music will be played, you too need to have a legal document granting permission to other people to use, share and edit your beats. This permission is called a music producer contract or a music producer license.
What is a music producer contract? A music producer contract or license is a legally binding agreement that efines the specific terms of a relationship, usually between a producer and an artist, determining ach party's rights, responasibilities, compensation, and other crucial details. A producer agreement can be used to protect songrwiters and recording artists from record labels and producers seeking to gain exclusive rights to their work. It can also be used to arrange a partnership agreement between an event producer and the artist recording their works. The music producer license also covers any distribution considerations of the tracks.
Don't skip this step when you're starting to sell your beats online, as it is very important to know what other artists can and can’t do with your beats as well as set a numper of placements, streams, etc and divide the percentage of royalties you’ll recieve from any profits that are made from the final song.
There are two types of music producer licenses: Exclusive and Non-Exclusive. You can sell non-exclusive music producer licenses to an unlimited amount of artists. But an exclusive music producer license can only be sold to one person.
- Exclusive rights are, rightfully so, more expensive and might require some negotiation.
- Non-Exclusive rights might include a finish date and/or a number of plays.
Decide what type of music producer license will be the one you’ll use in your work, and get your guidelines on track so that people who buy from you know what they can and can’t do. Some tracks can be non-exclusive and others can be exclusive, you decide.
Don’t panic, we have some free music producer license templates for you to do this. However please note that for special cases or specific questions you should always contact a local lawyer that knows the laws that apply to your country/region.