Here’s why your royalties are always less than what you might have expected. Recoupable Expenses. Because recording costs are not the only costs that are recoupable against your royalties. Some of the biggest costs of marketing your records are charged against your royalties as well. Debt to the Label. Over the years I’ve had lots of artists ask me if they ‘owed’ the label the money for that unrecouped balance. The answer is no. In reality, you do not owe them anything if the deal does not work out.
- Here's why your royalties are always less…than what you might've expected.…The concept is called recoupment…and it's an important idea to get your arms around…because it's going to come up a lot…in this discussion about record deals.…Here's how it works.…Those advances you got when you signed to the label…are recoupable against your future royalties.…What that means is that whatever royalties…you earn on records sold…will not be paid until you recoup those advances.…
If you've earned more in royalities…than you've taken in advances,…then your account is recouped…and everything is good.…You'll be seeing a royalty check every six months.…If, on the other hand,…you've taken more in advances…than you've earned in royalties,…you are unrecouped…and your royalty account will be…in a quote on quote deficit position.…That unrecouped balance will follow you around…from one album to the next until it's recouped…or you're dropped from the label.…
The longer it takes an act to break,…the more difficult it is to actually ever earn royalties.…
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