Signing an Indie Label Contract without Artist Management

Signing an Indie Label Contract without Artist Management

You don’t always need a music manager to take care of everything. You can make a name for yourself in the music industry without a manager. Though, they do have their advantages. They can help you get your foot in the door in the music industry. This may help you get a meeting with a bigger record label.

While that would be great, you don’t necessarily need to record with a bigger record label. If you are taking the indie route, you could end up with an indie label. This can help advance your career.

You get the opportunity to record music professionally. You can reach a larger audience. This could be the next step in taking your career to a new level. But, before you sign a contract with an indie label, there are a few basics that you should understand.

Before covering these basics, you should understand that everyone uses a different contract. You may find details that are not covered in this article. So, the first step in examining a contract with an indie label is the basics. You want to make sure that the contract is not overly complicated and full of legal jargon.

Honestly, a good contract should be easy enough to understand without the help of a lawyer. But, the more money that’s involved, the more complicated that contract can become. So, if you don’t understand any of part of the contract, you should have a lawyer review it.

The Primary Details of an Indie Label Contract

Even though the details of each contract will vary, there are some basics that will be included in almost every contract. This includes:

  • The length of the contract
  • Licensing and distribution details
  • Financial advances
  • Spending caps
  • Earnings after costs

Those are the main areas, but you also need to look at the licensing or recording deal. For example, the contract may cover licensing for an album that is already recorded or an album that is to be recorded after signing the contract.

The Length of the Contract

First, examine the length of the contract. This is also referred to as the term of the contract. This applies to the ownership of the album or songs (either licensed albums and songs or recorded albums and songs).

The term can cover any length of time. This may be a few years or forever. Generally, the term is for 5 to 10 years. Forever would mean that the indie label owns the album forever.

Licensing and Distribution Details

The details of distribution are also important. The contract should specifically mention where the label can sell the album. For example, do they have the right to sell the album worldwide or only within a specific country? These are details that you need to examine and agree on before signing the contract.

Financial Advances

Financial advances are rare with indie labels. The reason is that this is not beneficial to either party. The advance is money that is taken out of the money that you’ll earn after the label recoups the costs of recording, promoting, and distributing your album.

While a financial advance may sound like a good idea, you could end up making nothing after the label has recouped their costs.

Spending Caps

The spending cap is also important. This is the amount that the label can spend promoting and distributing your album. Setting a cap can help ensure that you actually make money.

Earnings After Costs

The earnings after costs are crucial. This is the money that you’ll make. The indie label is putting up the money needed to promote and distribute your album.

They may also be covering the costs of recording the album. Other than an advance, you will not earn any money until the label has recouped their costs.

So, look for the section of the contract that specifies earnings. This will either be a percentage or it will be split 50/50. With a small label, 50/50 is common.

This means that after the label has earned money from album sales to cover the money that they spent on promotion and distribution, you will earn half of the proceeds.

Here is an example. Say that the record label spends $25,000 promoting and distributing your album. After several months, they’ve received $30,000 in sales. That leaves $5,000 in profits. This would then be divided 50/50 – $2,500 to you and $2,500 to the label. 

Additional Details of the Contract

In addition to those areas, there are other details to pay attention to. You need to read the fine print. Look at the accounting, licensing deals, and other details that may not be obvious.

You need to read the contract from front to back. Read every single line. Again, if you don’t understand something, make the label change the wording or take the contract to a lawyer. Additionally, you’ll find some helpful advice by watching this short video on indie label contracts:

Working with a Music Manager

As mentioned, there are advantages to working with a music manager. They may be able to help you avoid signing a bad contract. They could even help you find a better deal. While it’s unlikely that your manager will have a law degree, they will likely have a better understanding of record contracts.

If you are interested in working with a manager, or if you want to learn how to advance your own career, we’ve got some more advice for you. Check out Music Management for Indie Artists. This eBook is the ultimate guide to managing your own career and preparing you for working with a music manager.

In the end, a music manager can be beneficial, but you may not need one at your current stage. So, if you get the opportunity to sign with an indie label, you don’t need to say no simply because you don’t have a manager. Consider your current level of success and whether it would be beneficial to your career to sign with an indie label.

The bottom line is that this is your career. You should be the one making the final decisions. Take charge of your career and do what is in your best interests.

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