Exclusive Recording Contracts or Record deals: What should I check before signing?
For several decades, the dominant model for album production has been the exclusive recording contract, also known as the album contract, record deal, exclusivity contract or more recently, phonogram production contract. Although this model has been considerably replaced by the self-production model, it is still very common and not a document to be signed lightly. Before you even enter the studio, it’s vital to reach an agreement with the production* on the terms and conditions of your recording contract.
To be sure you understand, an “exclusive recording contract” is a contract by which the maker retains the exclusive services of one or more performers to produce a sound recording to be exploited. It is therefore the maker that pays for the financing of this sound recording.
Exclusivity clauses and options
Duration of exclusivity
Exclusivity exists to encourage productions to invest in a project where the performers, and more often the featured performers, will not leave to record elsewhere. When signing such a contract, you need to be aware of the duration and scope of the commitment.
Make sure you are not already bound by another exclusivity agreement that is still in force. If this is the case, the maker to which you are initially bound could invalidate the new recording contract or claim sums from you for breach of its own contract. In the case of a group, check whether any of the members of the group are already bound by such an agreement or, conversely, whether the agreement you are about to sign will allow the members of the group to record solo albums in parallel, during the exclusivity period.
Remember that long-term exclusivity is generally to the advantage of the maker company, while the opposite is to the artist’s advantage. In fact, the performers give up the possibility to record with another maker for a given period in exchange of the production’s services. If the situation turns sour, you may not be able to record for a certain period of time.
Options
Clauses stipulating that the production may take advantage of one or more album options are also commonplace. They exist for the same reasons as exclusivity. By investing in a first album, it may be reasonable for the maker to want to be able to produce and exploit subsequent albums if the first one proves to be successful. As an artist, you should try to limit as much as possible the number of options you agree to. Beyond one option (i.e. two albums), you are engaging yourself for many years. For example, an exclusive recording contract with 4 options (i.e. a total of 5 albums) could bind you to a maker for almost 12 years!
Normally, the maker has a given number of months after the release of the first album to exercise its option. Make sure you know what these deadlines are, so that they can be respected.
Artists’ associations such as the Union des artistes (UDA) and the Guilde des musiciens et des musiciennes du Québec (GMMQ) specifically set limits on the duration of exclusivity and options. These are limited in time and number. Please refer to the applicable collective agreements. By requiring UDA or GMMQ contracts from your maker, you benefit from these protections, but we encourage you to negotiate better terms than the maximums provided for the duration of exclusivity and the number of options.
Don’t hesitate to contact your respective artists’ associations if you have any questions about this type of contract, and they’ll be happy to answer them!
* By production we mean the maker.