Once you’ve made a deal, the label will typically pay the artist a cash advance against your future royalties. In addition to the advance the record company will pay you a royalty for every record sold as well. What rate you get will depend on your leverage when you negotiate that deal. We'll also cover Royalty Math. In practice, trying to calculate royalties often feels like a game of hide and seek.
- Okay, now that you know what kind of commitment…you're signing up for,…now you want to know how much am I getting paid.…So, let's talk about that.…In exchange for those rights that we've talked about,…the record label agrees to pay you a cash advance…and a royalty for each record sold.…First, let's talk about these advances.…Once you've made a deal,…the label will typically pay the artist a cash advance…against your future royalties.…That advance is called a quote on quote fund…and it's used to pay for all the costs…of recording the masters,…including studio time, producers,…engineers, musicians, pizzas, lattes,…and anything else you might spend.…
Hence the term all in,…which means that that advance covers all the cost.…Any money leftover goes to the artist.…Now, the amount of the advance…or the quote on quote fund…will depend on your stature in the business…and your record selling potential.…So, for a brand new artist signing to a major label,…the fund's likely to be anywhere from 150,000…to 250,00 dollars as a ballpark.…
In this installment of An Insider's Guide to Today's Music Biz, Steve Rennie explores the role of record labels in the music business. He starts by talking about the different types of record labels and what they do, from marketing to manufacturing and radio promotion. Then you'll learn about why you need a record label, how to get a record deal, what a music contract will look like, and how the signing process works. As a little bonus, Steve gives you some insights on your commitments and compensation (advances and royalties) once you get signed.
- Understanding how record labels run
- Finding a record label
- Meeting with A&R and business teams at a record label
- How record labels promote your music
- Negotiating a record deal
- How record labels recoup costs