Members bbrian Posted February 25, 2003 Members Share Posted February 25, 2003 Hey everyone. I would appreciate some advice. I'll try to explain the situation the best I can. My band has been together for about 2 years, and we just put our first full-length record, on our own, in January. SInce then, we have gotten some attention from an indie label. The label is, in my opinion, well-known for an indie. In fact, I own a few CD's put out by the label and have seen some bands on the label. What I'm getting at here its that the label has a decent reputation, and isn't just some shady guy with bands I've never heard of. It was actually a label we were considering sending our stuff to until they contacted us. Anyway, here' s the deal. We've talked with the guy who owns the label, and we've gone over some key things we want out of the deal. After getting a feel for what we want, he is working up a deal (contract) and getting back to us. Of course, when he actually gives us a contract we will get a lawyer, but until then I wanted to educate myself as much as possible on the matter. So far we like the guy, and nothing has struck us as odd, so we are going to the next step. So, I just wanted some opinions on these aspects of the SUGGESTED deal. 1. We own all merchandising and publishing.2. He owns masters on FUTURE records.3. He sets us up with a booking agent for tours.4. He sell CDs to us for like $5 and we sell them at shows.5. We get a percentage (12% I think) of list for CDs he sells in stores.6.He distributes the CDs.7.He presses the CDs and puts up money for recording. I know there is a lot I'm missing, but we will certainly go over everthing with our lawyer. I just wanted to cover what I thought were the key things. By all means, if I'm forgetting anything important, let me know. Finally, I have one more important question. The label wants to do a 3 record deal, and the guy suggesting counting our record as one. He suggested licensing the masters from us, and repressing the record on his label. We still have plenty of our CDs, and we would be able to finish selling those first. However, my bandmates think it might be better to SELL the masters to him, in hopes of only being obligated to do one more record with him (instead of 2). So here's the big question: ***What are the advantages/disadvantages of selling the masters?? Can a lot be gained from only licensing the masters?*** I know it must be tough to say without knowing the details, but I'd appreciate any insight. Sorry for the long post. Thanks in advance for any help. brian. Link to comment Share on other sites More sharing options...
Members John61480 Posted February 25, 2003 Members Share Posted February 25, 2003 Considering he wants future masters, I guess he's testing the waters with you guys. Seeing if you swim, he'll make further adjustments. All the more reason you should do what you can to succeed in a way that makes him pay more attention. Another key point is that you guys sell CD's at your shows. Which is another way of seeing your business flair. Obviously the label/person likes what they/he hears. The information here is whether you guys can be savvy enough to take things further. Sort of like a person/s who put up money for someones business venture. They back you but you'll still have to fend for yourself and make your business float. That way everybody is happy. Just remember, that label has a stake in it too. So even if you flop, your not the only one hurt. They take a dent as well. -John Link to comment Share on other sites More sharing options...
Members ovenmit Posted February 25, 2003 Members Share Posted February 25, 2003 ive been reading a great book that breaks down a lot of the questions you're asking called, " Confessions of a Record Producer : on Backbeat books. It's a pretty easy read and the author hits all the key points in easy to understand english. You may want to check it out. Also-sounds like the deal you're being offered is very common and especially if its a well known indie lable with a lot of fan credibility (matador, spinart, jadetree, subpop) then you are already WAY ahead of a lot of bands-they may also have great distribution contracts and have direct links to the majors-not sure if thats the direction you want to go-but thats where the $$$ is. another quick question, how were you guys discovered? did you send out your cd or was it a showcase or word of mouth etc....just curious because you're deal is exactly what my band is looking for too...so good luck! Link to comment Share on other sites More sharing options...
Members Scheming Demon Posted February 25, 2003 Members Share Posted February 25, 2003 The items you touched upon in your post are pretty common contract points. There was nothing you mentioned that immediately sent up any red flags. Of course, you have to check the actual contract like you said. It seems fairly standard and Indy contracts are "fairly" simple. Usually with licensing as opposed to a full fledged recording contract, the band gets a higher percentage because you're taking up a good portion of the upfront financial risk. I would suggest that you request that each succeeding album, if the label chooses to exercise their option, that you get a slightly higher advance. You can also suggest that if certain sales plateaus are reached you receive a certain bonus or better percentage. You probably wont get that, at least for the first contract period, but it is pretty common that each advance is a little more than the preceeding one. From what you describe, it sounds like a decent offer, especially if it's your first offer. Make sure the contract period doesn't exceed the period of time you think it does. Find out from a lawyer, that if the company exercises every one of their options how long the contract will be in force. Good luck! As long as there's nothing major in there, I think it is wise to take a chance, get in the game and see what happens. Link to comment Share on other sites More sharing options...
Members 6am eternal Posted February 25, 2003 Members Share Posted February 25, 2003 Take Ovenmit's advice and read that book. You'll thank yourself for it. You didn't talk about an advance? You said he'd pay for the recording, but how much? Is that recoupable? This is far more important than 12% of the list price (imagine he's spending $50k recoupable, and you'll never see a cent!). Try to see all the money that will be recoupable. However, while you're dealing with the guy, keep one thing in mind: a good contract is one that makes BOTH parties happy and willing to work together. So don't pull all the sheets on your side leaving him in the cold. If he's got 10 bands signed for 12% and you get a lawyer that negociates 15% for you, well the label will end up working for the other bands more than yourself. But congrats on the deal, big hopes for your future and have fun. Enjoy! Link to comment Share on other sites More sharing options...
Members bbrian Posted February 26, 2003 Author Members Share Posted February 26, 2003 Hey. Thanks for all the responses. If anyone has any other opinions regarding the whole licensing vs. selling the masters to the first record thing, I would appreciate it. I think I pharsed the question a bit akwardly, so I'll give it another shot. Option 1:Mr. Label Guy suggested licesing the record we put out and repressing it on his label. Then we would do 2 more records ON his label, meaning he would own the masters. That would be our 3 records in his typical record deal. Option 2:My bandmates want less commitment and are therefore considering selling the masters to the label, in exchange for doing only 1 MORE record with the label. Any Opinions? Also, as if this isn't long enough, a couple more questions.-At risk of sounding stupid, will the label pay us to license the masters? -If so, how do we now what a fair amount is? -How do we know what a fair amount is for BUYING the masters? To answer Ovenmit's questions, no we didn't send anything to the label. We asked Mr. Label Guy how he found out about us, and he said he heard an MP3...from MP3.com I think. We did get ourselves on some mp3.com radio stations though, which I assume helped. The label isn't as big or good as some of the ones you mentioned (matador, spinart, jadetree, subpop); it's more like one step down from there. But, it's going to make touring and distribution a lot more feasible, which is what we are looking for. Thanks again for the help. brian. Link to comment Share on other sites More sharing options...
Members John61480 Posted February 26, 2003 Members Share Posted February 26, 2003 I kinda figured the advance was basically in the form of them selling CD's. Since I take it he's getting them made, it would suffice it to say that's they're bank. Correct me if I'm wrong please, but hey, at least you guys are signed. Thats a heck of a lot more than what most people have. Another thing you might want to check, is the label, despite the "size" an extension off a major. Basically a vanity label? That may be important because like the above posts, in Confessions of a Record Producer, there are some pros and cons with Vanity Labels. By the way, check out the book, it's really eye opening. -John Link to comment Share on other sites More sharing options...
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