3 big reasons not to do a record deal in 2018.
Okay, so I am absolutely not saying that none of us should ever do a record deal under any circumstances. Most successful musicians from the recent past have, in the course of a career, been on and off major labels, indie labels and used crowd funding projects too when the occasion demands. But in the future all bets are off, it’s hard to call who will want to do what and how we’ll all collectively work it, as we’ve got a lot of choices these days. However I think we can say with certainty that if you do commit to a record contract, there needs to be a really good reason for it. Here are three reasons to think again when a small indie offers you a £15K advance to commit to multiple albums over many years, or if a major label sniffs around assuming you’ll be flattered and impressed by their attentions…
We’ve all figured this out now and some people are getting really good at actually earning money from Spotify plays and other streaming platforms. Amazing isn’t it? Proper good news! So the guys who are maxing this out at the moment all have developed skill in placing new music into influential playlists or even creating their own. It’s not easy to get this right - if it was then the major labels wouldn’t be courting the playlist creators and tastemakers and buying up their brands and output. But it is possible to make some headway yourself and also to hire in a specialist agency to work your songs onto Spotify and Deezer. And this might cost less than you think. For example, you could check out a company like Liberty Music PR. They can offer great quality advice on Spotify playlisting. Contact Dan, Adam or Bee and mention Bruce from WaterBear.
So this is all great but if, having done a record deal, you have signed away the rights to your masters, then the record company will take the bulk of the streaming income. The proportion due to the writer of the song here is so small as to be almost non-existent. It’s a very odd deal structure that reflects the fact that initially no one really paid much attention to the detail, as it was felt that streaming ‘wouldn’t catch on’. Sigh….
So, where the writers lose out, the person(s) who own the masters (the audio recordings), wins. Very approximately, one million streams clock up to about £6K income in pounds sterling so ten million streams might give you a reasonable income of £60K and, although this sounds a lot, you can see independent artists making this work all around you.
So think twice before you sign away the rights to your recordings. This could well determine your financial future.
Maximise your own physical and digital sales income
I think of a record company like a bank. A source of funding - and an expensive one at that! A bit like the payday loan companies, it’s there if you have no other option, but by God you’re going to pay dearly for it.
Of course there’s more to a record company than just money - specialist skills, distribution, clout and probably a roster of other acts that substantiate your position and add leverage for touring slots, supports and festivals, etc.
But don’t forget you can raise money to make the record another way (crowd funding with Pledge, for example) and then simply buy in some specialist services as required, be that radio plugging, press, PR or streaming income generation. All this can be much more affordable than you think, hundreds of pounds rather than thousands in many cases.
It’s important to realise that by signing a traditional record deal you wont be able to sell the recorded work without an agreement in place. So no CD’s or Vinyl on the merch stand for example, which for some genres is a big earner - big enough to pay for most of the costs on a support tour. That’s quite a lot of income to lose.
If you own your own record then 100% of the sale goes to you, the artist. If you use Pledge or Kick-Starter on presales, or a delivery platform for a shop window you might lose 15% tops. An old school record deal gives you 12-18% of the gross dealer price, i.e. about 60p on a £10 CD or £1.20 or a £20 CD, and out of that you have to recoup the cost of recording the thing plus promo costs, video costs, etc., and even then you won’t own the thing anyway!
There’s a lot of difference between £10 a unit and 60p…..before we even think about the streaming issue.
This is why you increasingly see old brands rerecording their seminal works and re-releasing. It’s not just nostalgia, it’s good business as fans are generally very happy to compare the new versions with the old and the band gets to exploit these new recordings and actually earn some cash to keep the show on the road.
Retain your independence.
The DIY Model is something we are big fans of. It’s not the complete answer and admittedly hard to manage on an international level, but how else could you make the music you want without having to justify if or deal with company politics? Some might say there are enough politics in the average band without introducing record and publishing companies into the equation.
You can make the music you want, have the artwork you want, and choose how you manage your campaigns. Critically, you have that option to buy in any expertise you need, budget allowing. That’s what a lot of record companies would do anyway. If you are objective and self-aware enough to admit weak areas creatively and professionally, then all gaps can be filled.
You’ll also have this amazing direct relationship with your audience through social media. This is why any and all of this is possible in 2018, where it was impossible in 1998. There is no limit to how far you can take this and also no ‘sell by date’ for your life as an artist. So long as you have an audience and deliver value to them you will enjoy a life in music. No one can take this away from you. And that’s got to be a good thing, right?