1. The Licence Deal

Under a licence deal the artist licenses the use of their recordings to a record label. The licence would usually permit the label to manufacture, distribute and sell named recordings.

2. The Exclusive Recording Contract

Under this type of deal the label are appointed to exclusively manage the artist’s music for at least one year. The label may also reserve the right to renew the contract for further periods of time.

During the term of the contract, the label will usually require the artist to record at least one album and in return, the label will agree to invest time and resources in the artist.

3. The Development Deal

In contrast to the exclusive recording contract, a development deal is an agreement that the artist will record a number of demos or singles for the label, rather than a full album. The investment from the label will usually be limited to recording costs.

The label will then monitor the success of the artists with a view to hopefully offering them an exclusive contract if all goes well.

4. The Production Deal

This type of deal is made instead between the artists and a production company. The production company will then license or assign the recordings made to a label. This will usually be done through a licensing deal or assignment.

The production company then works to develop the artist with a view to getting them a deal with a major label.

5. The 360 Deal

As seen above, typical recording contracts involve the label investing money in the artist to record and album. The record label will then take a percentage or royalties from the record sales.

In a 360 deal, however, the record company has a hand in most or all aspects of the band, including revenues from live events, touring and merchandise.

These deals are becoming more common, but, whilst these contracts can work to your advantage, they also carry a different type of risk than other contracts. Specialist legal advice should be sought to go through the many aspects of these deals.