Music Industry Monday
As an artist trying to navigate the music industry, there are lots of things to get hung up on. It is a very complex industry with ins and outs that not many people consider when signing up for a career. One of the lesser-known aspects of the industry is the label advance system. Of course, many of us know that labels exist. Not many know how labels work. In today’s article, we will be briefly discussing how label advances work & how you can make the best use out of them.
What is an advance?
For lack of a better term, a label advance is essentially a business loan. It’s not free money. The artist has to recoup (or payback) that loan (assuming your music is selling). Until you can pay back that advance, you will not be able to accrue any revenue from your royalties.
The good news is that, in most cases, if your music doesn’t sell then you don’t need to pay back that cash. There have been a few cases where contracts were signed and the artist was responsible, but that is very few and far between.
Why do I need an advance?
For some people, having a label to help you out with advances is a great thing. Not only do you get the value of that money upfront, but the label will also be able to help you record your music in top-tier studios. You may also not have enough cash to get you by with rent & bills. Most of the time, an advance is a great way to get ahead in the industry before making money yourself.
Generally speaking though, having an advance is just a sure-fire way to get the highest quality out of your music and the marketing surrounding it.
What’s the Catch?
It seems great, right? Free money in exchange for paying it back with your royalties. But what’s the deal? Why does it seem almost TOO good? Well, earlier I mentioned that the label has to recoup its investment. If your music isn’t making enough traction, it could be YEARS before you see any money from your music.
Many music managers tend to try and get a cap on the label recoup clause. Labels have the power in this scenario, but it’s up to you to make sure that the terms of your contract match your needs. We always suggest that people get a professional consultation before going into any deals.
What Label Should I Go With?
The sky is the limit! There are hundreds of labels out there that both generalize and specialize in their artists. Of course, when we talk about labels many people default to thinking the bigs. We’re talking about UMG, Capitol, etc… But little is known that there are many different label types.
We have independent labels, micro labels, and a whole gamut of labels that can help you get your music out there. The bigger labels will always have more money and resources, but a label is a label. If you are just starting, look around for smaller labels that will help you get started.
Take the Advance!
If you are ever in a situation where you need money to get your track off the ground, we highly suggest looking into getting a label advance. The representation not only helps you out financially but being attached to a label legitimizes you as an artist.
Have more questions? Check out the blog resources that we make weekly to help you navigate the industry!
Music Industry Monday
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