The musicians undertake to publish their releases only through their record company. In return, the record company takes care of the financing, production and marketing of the music. Many record companies hinder their independence through their strong influence (which is justified by financial interests) in the artistic freedom of the musicians. However, it would be too difficult for the musician or group of musicians alone to market their music. The term record contract comes from record , a sound recording or music medium .
Types of record contracts
There are two main types of record contract: the tape transfer contract and the artist contract .
Tape transfer agreement
In the case of a tape transfer contract (tape in the sense of the sound carrier; in some contexts also called tape lease deal , master tape deal or BÜV for short ), the record company undertakes to publish one or more of an artist's sound carriers over a certain period of time and acquires the option to do so following productions.
The name comes from the fact that in the past the individual audio tracks were recorded on tape in the studio and that the record company undertook to "accept" the tape as the basis for the release.
Usually these are so-called master tapes. This master serves as a basis for reproduction. The binding handover of master audio files or master CDs is also referred to as master handover.
Band takeover contracts are mostly awarded to established performers or newcomers, as well as to artists who can / want to influence the music independently of the influences of the record company. The BÜV (tape takeover contract) guarantees the band or the artist the greatest economic independence, since after the BÜV has been concluded they act as a client to all other parties except the record company and are fully responsible for the success of the recordings. This in turn keeps the Record Company free from many organizational work steps such as B. the producer search, the booking of musicians and the studio itself. Furthermore, compliance with the previously set production budget is guaranteed for the record company by taking out a BÜV, which is often not the case in other constellations.
As with the artist exclusive contract, the billing is "pro rata", i. H. a share in the sales of the phonograms per piece. Usually the HAP (dealer selling price) is also used here. Since the entire production is licensed here, license fees of 12% to 23% are possible for the entire production. From this, however, all necessary licenses (e.g. to commissioned producers, management, promotion) must be paid for. Often, so-called technology deductions are calculated by the record companies, which lower the agreed license distributions.
The artist is also involved in the distribution of the production via download portals within the framework of the contractually agreed licenses.
With an artist contract , producers bind artists to themselves for a certain period of time (a certain number of productions). The producers can extend the term (if successful) via unilateral options. In doing so, the producers undertake to publish.
The artist contract also regulates the possibilities to express options after the contract has expired. This means affiliation contracts, their terms, remuneration and scope of production.
However, the artist exclusive contract usually also includes all types of artistic presentation as well as the transfer of all personal rights to the record company. For the artist himself, this type of contract drafting is often a problem, since in many cases the record companies are not able or willing to support an artist or a band consistently well and competently over the duration of his or her career, or often not have the stamina and the artistic vision. For this reason, more and more large record companies are handing these tasks over to affiliated labels and producers.
The artist's remuneration through such a contract is a participation in the sales of the sound carriers. The dealer selling price (HAP) has established itself as the basis for billing. The HAP is the amount that the record company invoices the wholesaler when the entire production is delivered in the form of a CD or DVD , i.e. well below the so-called sales price. The artist receives a percentage from the HAP, which can range from 4% to 14%. With established artists it can be more, with newcomers it can be significantly less. The artist-exclusive contract is being signed less and less by large record companies, as most artists now have their own network of musicians, producers, studios, managers and promoters and thus have more economic and artistic independence and prefer to conclude a band takeover contract. From a certain size of the company of the respective artist, the artist often founds his own label and produces his music alone.
On the basis of these license shares negotiated in the artist contract, the right to merchandising , i.e. to exploit the fan articles with the artist image or logo, is usually licensed. The extent to which record companies participate in the income from the live concerts is also currently under intense discussion.