5 Reasons You Don’t Actually Want The Record Deal Of Your Dreams

The record industry, and consequently the record deal, have seen countless transformations over the decades, and while many artists may still be eager to sign the "contract of their dreams," the reality is that these agreements can often leave the artist in a less than ideal situation

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Guest post by Christine Elise Occhino of Soundfly's Flypaper

The record industry has undergone many changes over recent decades. From enormous strings-attached advances and historic record sales, to the internet, Napster, MP3s, streaming, Instagram, and so on, a lot has happened and it’s sometimes hard to keep up with all these global industry trends.

If you’re at all like me, you grew up wanting the kind of international record deal that could change your life overnight. And it didn’t really matter how it all came together, it was just about seeing my face on a billboard. But now that I’m embedded in the industry myself and know a thing or two about how things are done, and what really happens when you sign that contract, I can safely say that that dream record deal is really not all it’s cracked up to be. Here’s why.

1. The Short End of the Financial Stick

Record companies are in business for one reason, and one reason only: to make money. You are an investment to them. You are a number designed to produce numbers in the form of dollar signs. No one cares about your feelings. No one cares how you are living day to day, month to month, year to year, or beyond, until you start making them real dollars.

Signing with a major label is essentially accepting a giant loan with the most unfavorable terms possible. A “million dollar deal” does not mean you get written a check for one million dollars. What it means is that they will spend that budget however they see fit to get a return on their investment. And how do they typically spend it?

A lot of mismanaged funds, overpriced studio time, nonsensical marketing efforts, and a fat bill you weren’t expecting to get with every frivolous line item you can imagine — from the wrapping of your physical CDs, to the unnecessary jet they put you in to get you to your next show. The label needs to make back every penny (and then some), and it’s all on your shoulders to earn that back through your music, regardless of whether it’s done your way or not.

2. Stifled Creativity

Your musical creativity and innovation are likely to end the second the ink dries on the last page of that contract. You are now an asset and it’s ultimately up to the label what music you make, how you make it, when (or if!) it’s released, who you’re marketing to and how, what your image is, and more.

Got a song you feel really strongly about putting out as the first single, but the label doesn’t feel the same way? Guess what happens?

That song will probably never get released. And don’t think you’re going to release it on your own… no, no, no. Remember what you just signed, because whatever the label needs, is what you are to become. Otherwise, you should fear being in violation of said contract (see also: court time and being bled dry financially by one of the biggest corporations in the world, name and brand smeared within the industry), and getting dropped to boot.

3. Likely to Be Shelved

Just because you’re signed, doesn’t mean you will become the next big thing overnight. Actually, it doesn’t even mean your music will ever see the light of day. Being shelved is when a label signs you but “back-burners” your album project, essentially leaving you in musical purgatory.

For a creative person, this is arguably the worst place to be and the absolute most terrible thing that can happen to you. Imagine having so much music, being so excited about getting signed after many years of pounding the pavement, having all your friends and family awaiting your radio debut… and then, nothing.

Welcome to the real face of the music industry. The label doesn’t have to do anything and owes you nothing — and there’s nothing you can do about it because that’s what you signed away. What’s even worse, sometimes a label will sign you not because they think you are the next superstar, but because they already have the next superstar on their roster and they don’t want to worry about any competition in that space. 

4. 360° Deals

360° deals are the music industry’s way of making even more money off their artists since music isn’t quite paying out the way it used to in the pre-piracy days.So what does that mean for you?

Be prepared to not only give all of your music earnings to the label until the full budget has been recouped and then some, but also know that they will take a percentage of all of your earnings from live performances, publishing, endorsement deals, merchandise, movie, and TV appearances, and beyond. Nothing is truly yours anymore, since you’ve got an invested co-owner in your project, and they are going to ensure that their investment in you is sound for years to come, through any means necessary.

5. You Do the Work — They Profit

Today, labels want it all when you walk through the door: high-quality recorded music, a polished “package,” thoughtful artist development, an expansive fan base, and serious social numbers in the form of likes, streams, follows, subscribers, etc. This may seem backward to you and, well, that’s because it is.

Before, a label would sign talent (period). From there, they would develop the artist, nurture their skillset, hook them up with the best songwriters and producers in the biz, facilitate opportunities, and pull strings to put them on every major stage, red carpet, and magazine cover to get them the national exposure needed to become a star.

From there, the fans come and the snowball grows until it’s rolling down the hill full-speed on its own. But now that artists are responsible for doing all the leg work on their own, it’s no wonder why the diversity and overall quality of the pop music industry as a whole has begun to suffer. But more importantly for you, why the heck would you work so hard to get to a point where you’re already a self-made success, just to have a label swoop in to take a piece of the pie for free?

Today’s major labels will only offer you a million dollar deal when they know they can make a whole lot more off of you. If you’ve made it far enough yourself and are seeing results and a real income stream, use this to your advantage — invest in quality, find good people to be a part of your team (publicity, sync licensing, booking, management) who have your best interests in mind, do your research about labels and choose a parter who will help you do what you want to do and how you want to do it.

You don’t need a bunch of people in suits in a top-floor office to tell you how to make music and engage with your fans, because you’re already doing it. Remember what the goal is and don’t lose focus of that. Making a living doing what you love is what’s most important, and creating a body of work you’re proud of that connects with people. A label won’t buy you that, or should I say, you won’t buy yourself that with a label’s borrowed money.

Thrive on your independence, and only entertain that kind of investment when it benefits you, and not the opposite.

Christine Elise Occhino is a serial entrepreneur with a passion for the music business. In addition to being a vocalist herself, she is the CEO of Elise Music Group, Artistic Director of The Pop Music Academy, and owner of Stamford Recording Studio. She is also the proud Founder and Executive Director of Hope in Harmony, a 501(c)(3) nonprofit organization that uses music to help and heal those in need. Christine is a member of the Grammy Recording Academy, the American Society of Composers, Authors, & Publishers, and the Berklee College of Music Alumni Association. She has spoken on many music industry panels, contributed writing for music business publications for over a decade, and currently hosts the music-based web series and podcast, Soundbytez.