Do You Really Want A Record Deal? How To Legally Ensure An Artist Can Even Sign One

As the music business has changed, so too has the process by which artists sign a 'record deal'. Here Justin M. Jacobson looks at the legal infrastructure artists must have in place in order to make sure they can actually sign to a label.

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Guest post by Justin M. Jacobson, Esq. on the TuneCore BlogWhile most musicians dream of getting signed to a major “record deal,” the days where a record label executive attends a show and signs an artist based on their performance are long gone. These days, that only occurs in the movies or on television. Instead, today’s music industry has shifted toward a greater reliance on an artist’s social media impressions, presence, and following. It also focuses on the talent’s music streaming platform numbers and other factors unrelated to the actual quality of the music and instead focused on the artist’s perceived marketing and commercial value.In recent years, major recording deals were signed by individuals who had generated their own independent marketing “buzz,” including those who started their own pop culture reference, such as “Cash Me Outside” as well as those who created their own independent success. In contrast, there are also artists who flourish independently without any major label or distributor assistance. This is a rare situation and typically only arises when an artist ensures that all their potential streams of income are properly maintained and established, such as Chance The Rapper.Whether an artist obtains notoriety through creating their own pop culture phenomenon or by independently developing the artist’s following to a level that they can achieve stardom on their own, any musician who is interested in being able to actually “sign” with a recording company must first ensure that their music business infrastructure is in order.This is particularly important as most artists believe that they are ready to sign a deal; however, in reality, the artist may not even own all the rights to the material that they think that they do. This means that the musician generally would not even have the rights that the deal requires them to possess in order for an agreement to be properly executed by the artist.

It seems counter-intuitive to presume that a label or other third-party music distributor would knowingly entertain, let alone enter into an arrangement that could potentially expose them to liability. Therefore, it is prudent that prior to entering into any agreement with a third party, especially a record label or other music distributor, the musician ensures that they have all the rights to the material that the artist thinks and purports that they have.This means that prior to soliciting, submitting or otherwise searching for a music publishing, recording or distribution deal, the musician should ensure that their own music business infrastructure is in proper order. This could include the formation of business entity, such as a corporation or limited liability company (L.L.C.). The uses and potential benefits of such an entity are described further here.It is also prudent for a musician to ensure that the performer name that they choose is protected and clear. While this may seem straight-forward, many musicians fail to search and properly protect the basis of their entire musical career, their artist name. Generally, a trademark protects a particular trade name, including a musician’s performer or band name.It is ideal to ensure that a name is clear prior to attempting to enter into an agreement with a third-party utilizing this potentially infringing name. This misstep could expose the musician to potential liability from the contracting party if another party with stronger rights attempts to enforce them against the label. A more in-depth examination of trademarks as they relate to the music business is available here.Additionally, an artist should ensure that they personally own or that the business entity that they formed and are an owner of, actually possesses the full rights to the finished music that the artist intends to release and license. A prudent course of action is that anything that the artist did not create themselves should be assigned or otherwise licensed to the entertainer. This applies to any third-party contributions to the finished music and is typically effectuated by the entering of some sort of rights assignment, license and/or “work for hire” agreement.In short, the agreement would license or otherwise assign the entire interest and copyrights that a third-party has in the particular work to the other contracting party. This could apply to any producers, vocalists, songwriters, engineers, or mixers who contribute material to a finished song and recording.This same concept also applies to any photographers, videographers, web designer, logo designer, marketing or other promotional material designers who contributes toward a finished creative work, including a song, video, photograph, logo, album cover, web site or other imagery. A more in-depth look at the benefits of copyright protection for a finished work is available here.An artist should also be aware of the terms of any agreement or document that they sign. This includes if an artist enters into a production or other “demo” agreement with a third-party, such as a producer or recording studio owner. In many of these situations, the agreement provides the producer or studio owner with the exclusive rights to the material created and may only provide the artist with a license to utilize the recording or even less than that. Since an artist presumes that they own the rights to the music they create, it is essential to ensure that the documentation signed by the artist provides for this.Finally, ensuring that an artist has proper professionals around them can be the difference between success and failure. The right professionals, including a personal manager, a booking agent, a business manager and an attorney, can open many doors; while, the wrong professionals can severely hamper an artist’s ability to succeed and prosper. Therefore, it is prudent to understand what a professional, such as a personal manager, can provide to an artist. A detailed look at talent managers is available here.Once a musician ensures that they have all the rights that the deal requires, the artist may be ready to begin “shopping” for a music distributor. There are many variables that relate to any artist’s marketability and potential for success, all of which are outside the scope of this article. Ultimately, an artist should be aware that while they may believe that they are ready to “sign a deal;” if they haven’t signed deals and ensured that they have the proper rights to the material they want to shop, then they can’t even sign a contract that they may be presented with.This article is not intended as legal or business advice, as an attorney or other professional specializing in the field should be consulted.

Justin M. Jacobson is an entertainment and media attorney for The Jacobson Firm, P.C. in New York City. He also runs Label 55 and teaches music business at the Institute of Audio Research.