Contract Negotiation and Safe Practices For Emerging Artistes

Written by: Francis James

Braxton, A R&B songstress Toni Braxton was large and in charge in the ’90s, offering $170 million worth of records and bringing home a heap of Grammys. But Braxton just observed a minor division of that cash — her first eminence check was scarcely finished at a thousand dollars. Without a doubt, she spent more than she ought to have, but as her recording costs expanded, she wound up profoundly flat broke to her mark.

Imagine being able to pull in 170 million dollars as an artist, and still end up broke? O wrong now!

As an artist, your talent and creativity are what fuels the fire behind these contracts. You should not be afraid to negotiate certain terms to make the contract equally beneficial for you and the party at the other end of the table. With this in mind, you should be aware of certain terms that will guide your understanding of this topic so as to avoid costly mistakes.

A. Royalties

Royalties are the payments made in order to use someone’s work. You pay for the right to use. This payment is received by the owners of the work, this includes everyone that is listed as a contributor to such project. There are different levels of payment and usage. For one to be paid, they need to be listed as one of the owners of this work: no rights or ownership means no money. You will be paid in terms of a percentage of each sale of your album sold. The typical rate is 12-15% of the amount of the net sale of each album. There are different types of royalties that largely depend on how the music or intellectual product is consumed. Which include; Mechanical royalty, public performance royalty, digital sales royalty, master recording royalty, synchronization royalty etc.

Here’s a breakdown of royalties by Groover

B. Exclusivity

When you license one of your songs through an exclusive agreement, this is what happens: The licensee pays you part of the fee received from the third party. You can NOT sign another agreement with another licensee to shop that same song around to third parties.

C. Advance

This is more like a pre-payment of royalties. This is the money you receive when you get signed to a record label. The record label in a sense acts like a credit card company and fronts all of the costs associated with producing. Costs to promote your image, your name, branding, promotional materials, studio time, background vocalists, art, and travel expenses are all paid by the record label. But these advanced costs must be paid back. Advances in the music industry do not earn interest and are not loans. It is a popular misconception that artists are “in debt” to their record companies or writers to their publishers. You only get to pay back what was invested in you.

There’s certainly more to discuss. But, let’s take a pause here.

Now that you know all these snippets, here are some safe practices and questions you must ask before signing that document.

1. Compartmentalization:

Do not go for the all-or-nothing approach as some artists do in their first contracts. Break your negotiation down in sections. Stand your ground, and it’s okay to turn down your first offer from a label if you feel you’re being exploited.

2. Ask for SDTs:

No, not STDs, SDT ( standard deal terms). To be on the safe side always request for SDTs because it relieves pressure from you as an artist and gives the label the notion that they have to uphold their part of the bargain.

3. Emotional Botching:

Remove your emotions from the negotiation table. Always have viable options, avoid conflict, and if they arise have a plan of Pat to handle. Most importantly stick to the objective. In the words of Nigerian rapper Blaqbonez ” Show these bitches no emotion or else them go walk all over you.” What he said is what I am saying, use facts, not feelings. Successful negotiators separate business from personal, facts from feelings. They avoid letting an unpleasant personality or style drag down the negotiations. They also avoid making the negotiations seem personal by using language such as “I believe” or “I think,” focusing instead on statements of fact (“If we pay this price, both parties to the venture will be at risk.”)

4. Control Negotiations:

No matter what happens, control the negotiations, the pace the content everything. Because the team that frames and presents an idea in its backyard always has an upper hand.

5. Focus:

In a Hollywood sniper thriller movie. The most important thing for the actor is focused, a little distraction, and boom he’s dead. It’s the same for a negotiation team. When it comes to the music business as an artist divulge your team spread-out duties especially Risk management ones. Why? Because labels are signing you into a billion-dollar industry, they’ll be investing in you and by right will have a need to talk about the “What Ifs”. Stick to your goals and let your team handle their duties.

6. Travel Half the journey:

Make sure the other side leaves the negotiation feeling they’ve made a good deal. The offers you make should always leave you enough wiggle room to make acceptable concessions to the other side. This also means you shouldn’t start negotiations by revealing your absolute bottom line. If you instead leave yourself room to negotiate, you’ll make the other party feel that they’ve won something — and you may be surprised to find that the other party is willing to give more than you would have been willing to accept.

7. Ask Questions

Question rather than demand. If the other party is taking a hard line on certain issues, ask why. Questions open up the discussion; arguments often close communication down.

8. Set a PCT

Positive collaboration tone. Find points of agreement and end on a positive note. This upbeat approach requires that you find opportunities to say, “You’re right about that,” or “I agree.” Always try to end each meeting on a high PCT.

9. Dealing with burnouts.

If the other party resorts to threats (“Agree to these terms or there’s no deal”) you’ll have to decide what the underlying deal is really worth to you. If the ultimate prize is so valuable that you’re willing to accept the other party’s ultimatum or put up with endless haggling, that’s fine. If not you’re in an industry with 7+Billion customers, you’ll find your niche.

Last but not least, Research and read more!

Digital Junkie

Digital Junkie

I am married to two wives. Music & Tech. I love them all. **Yikes

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