In the recent past, the contraction of the music industry took record company's advances with it, to the point where artists would often opt out of record deals altogether. It looks like this belt-tightening may be coming to an end however, at least where hip hop is concerned.
Guest post by Bobby Owsinski of Music 3.0
There was a time in the recent past when the record company advances for a new record deal had shrunk thanks to the overall music business being in such a bad way revenue-wise. It got to the point where many artists considered going the DIY route since it actually offered better alternatives to make money. That period has long been over however, as the business has seen some excellent growth again over the last 5 years and labels are stronger than ever. That also means that advances are back well over the $1 million mark once again. The catch is that it’s mostly hip hop artists that are reaping the rewards for a new deal.
The reason is that urban music currently dominates the charts right now, so just like in the rock, punk, grunge, pop and EDM trends before, any artist with potential is seeing a record deal at a pretty price. According to Warner Bros. Records new co-chairman,Tom Corson in a Billboardarticle, “anything that shows promise is being snatched up. We’re definitely in the middle of a very competitive and expensive moment here with hip-hop acts.”
Of course what many artists coming into a new deal don’t grasp is the fact that the money is an advance against royalties that has to be paid back. It’s supposed to pay for studio time, music videos and tour support, and not lavish lifestyles. The label is the bank that gives you the credit card, but you will get a bill that needs to be paid at some point.
That said, now is a great time to be a hip hop artist, but remember that trends come and go in the music business. Tomorrow may be the first day of the next completely different style of music, and that’s what the money will follow.