Ep. 79 - What Is A Record Deal?

by: Phase Vi

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[0.06]
what's going on everybody welcome back to Phase six your source for music business motivation and support is your boy cirlove I'm excited to talk to you guys again we're staying with our topic that we've been going through lately which is just talking about high level understandings of contracts what type of contracts exist so you can understand what either the goal is or what the goal is not going forward when you're trying to navigate through success and trying to create value for yourself so today we're going to be talking about record deals now I've done a lot of videos about record deals positives negatives pros cons 360 standard whatever so this is gonna be review for a lot of you guys that watch my content but for people that look this up specifically to understand more about record deals I'm gonna break it down to you guys so let's jump into it avoid sell out let's go [Music] all right so I just got finished breaking down a publishing deal and I feel like it's only fair that I give record labels their opportunity to shine too so I talked about a publishing deal basically what I said in a publishing deal is that a publishing deal is a situation in which you're trading your intellectual property ie your copyrights you are you know your royalties and different things of that nature your training that for exposure or some type of partnership or some type of situation is going to add value to you in reference to a company that is probably a publisher or a publishing entity that it's going to do b2b business with your records with your intellectual property to create value for you and for themselves they either gonna give you an advance or fee upfront check or something of that nature and for your services and then you know you either have a split or you're giving up a hundred percent of ownership in the intellectual property going forward that's publishing companies what the thing about record deals is that they are very similar the difference between a record deal and a publishing deal is a publishing deal is b2b a record deal is typically b2c they're doing a deal with you because they like the appeal that you have in the consumer market right they're gonna be doing this deal with you and they're going to be saying hey we're gonna give you an advance or we're gonna give you a fee or we're gonna give you a fee and an advance in exchange for your services your services is whatever you do if you're a singer slash writer then you write and sing when records if your rapper writer you write and rap on records and you perform on stages and you have a brand and people care about you and what you do and what you represent and all these different aspects right all these things are the things that you are selling to an individual so what the record deal what you're basically doing is like I said you're training your service for you know a fee and a percentage in the vibe that they're gonna add to you the value that the regular labeled adds is that they're going to front money to market and gain and create exposure for you use their relationships and their networks to expand your exposure in the market to create the highest potential of success now with all of this exposure it doesn't mean you're going to be successful but they're gonna give you a chance to be successful by the amount of exposure they're gonna get to you Greenwich or deal your parameters what you set up in different things of that nature in exchange they're gonna ask for a few things this is going to depends on the type record deal that you have now if you have a standard record deal traditional record deal it's kind of hard to say what standard and traditional is because there's been so many types in every record deal was customized for different people but when i say standard and when people think about standard they're thinking about you know the time period before 360s and what you had to deal with the company and that company was taking a percentage of sales from the albums and you know maybe they had some percentage in the publishing and royalties and different things of that nature in exchange they were out there pumping you promoting you doing paying for tour support paying for all sorts of different things to help you get established as an artist so that both parties can eat so that they can make their money off you you make their money you make your money off of the investment that they put into you by pulling money out of the fans pockets by way of sales streams merchandise whatever it is you're selling directly to the consumer the way that this would work things at the label would front money and then you would have to pay back everything that they fronted and then at which point you've paid back everything they're fronted there's been some type of split that would be set up in the agreement and you may get a maybe a 70/30 split you're getting 30 or 60/40 or whatever you put together now the genius thing that was done by individuals that are very entrepreneur and and had a lot of business savvy they started doing joint ventures a joint ventures was known as a JV deal a JV deal was a 50/50 deal with the record label what that typically means the record label recognizes that you are valid business when you came to them you had all of your ish put together you were already selling records in the street you already selling records you know in in whatever vehicle you were selling records you know nowadays that's gonna be streaming you're getting hella streams and you have a business model for doing so not only can you break one artist but you can break a series of artists consecutively and you're able to create value from a label perspective not only are you able to create value but you can handle the business the paperwork and all the different things you're starting to look like a mini major yourself at this point the label says we're not just signing you and investing in you as an artist we want to invest in the whole company itself because we see this company is a partner that we can make money with long-term JV 50-50 partnership the way that these deals are set up is that when a record label comes in the record label is going to first pay back everything that you've spent or half of everything that you spent to get to this point so they can say hey we put in on this you know a lot of times they pay a hundred percent they recoup you for everything that you did just as a sign of good faith to say look we want to be in business with you whatever it cost you to get here we will cover that cost for you and going forward we want a 50/50 deal out the gate we're going to cover your cost and we're going to front your future in these situations record label front you a lot of money then at which point you go out there you produce records your do your thing you know your own label they just give you money and when you ask them for support and assistance they give it to you in whatever way because it's advantageous for them to help you because they're getting fifty percent of whatever you guys make so they'll make certain phone calls and pull certain people in because you're doing all the groundwork in a 50/50 situation you've proven your value since they know that you can handle the business you're gonna get offered a JV deal which is a 50/50 deal with the record label once you know you sell records all the money that we spent fronting your records they're going to of course calculate that take that money off the top so they'll take their investment money put it back in their pocket and then split the remainder 5050 with you down the middle it's a beautiful deal is the type of things that you know a lot of people have in this game and a lot of people have shot for for a long time so that is a 50/50 deal what's coming today is the 360 deal we talked about this a lot the way the 360 deal works is that a record label has a standard deal but they also have an ancillary deal or a passive income system built in there as well but they're also going to get an additional percentage off of anything that you do like a manager so we talked a lot about managers and how managers eat and what managers do basically imagine the second management feed they'll get additional percentage on everything you do from shows to merchandise to add to endorsements to product deals to whatever it is that you put together now the reason that labels are rolling these out is because albums aren't selling like they used to sell streams have not quite close the gap even though they're going to close the gap and supersede the gap very soon however to make up for the money that's not happening record labels are saying hey we'll give you more of the sales if you cut us in some on the other side that's starting to drive more revenue because ticket sales are going this record sales are going like this and they said look we'll give you some of this if you give us some of that and when I just doing that that makes no freaking sense and it made a lot of you know old-school artists a particularly angry before a lot of the newer artists it was still an opportunity and they were getting bigger cuts even though record sales were going down they were still getting bigger customer I have been seen in the past and being Elling making a lot of money off of it now the whole concept of having a record label involved with the 360 is that the label is saying if there's no benefit for us why should we sign you so at the end of the day do you have to sign up 360 deals a new artist no but if you need the money if you need the support if you need the foundation then it has to be something in it for them for example I think literati is amazing though the yachty is really really amazing he came out a young kid captured the public did his thing if people go back and forth from how they feel about him lyrically musically old school new school all that other type of crap I don't care the boys hot the boy makes things happen the boy creates a lot of value however his albums is early album didn't move the same way that a Kendrick Lamar or any other artist at that level that's getting endorsement deals with target and getting endorsement deals with where the sprite I think sprite whoever else he's getting his deals with he's giving these large endorsement deals but his albums aren't making the same type of noise as other people that are getting the same type of deals his shows aren't getting booked at the same rate well how does a record label make sense of this you're getting all this other money we help make you famous but we're not seeing any revenue so if their idea was look if these types of artists are gonna exist if nowadays artists are gonna make money off of their brand versus their music if we're gonna promote them as a brand eccentric artist we need to have a cut in on the brand I think little yachty is an amazing example of a person has a dope brand right and so it's a record label is you know 360 I don't know it's business but he's you know he's signed to QC and QC signed and you know it who knows how the situation is set up but I'm pretty sure the kids being taken care of but that's 360 and how that works in the logic behind it we've talked about it a lot I don't want to be the dead horse so moving on single deals single deals are very popular for record deals single single deals happen when you have one song that's really hot but the song is stronger than your brand the song is stronger than you the song is stronger than everything it happens when a person has a song that gets 500,000 views but they only have 20,000 views on Instagram yeah single deals happen a single deal is a scenario in which the record label says we want to bet on this single we don't want to bet on you we don't want to commit ourselves to you but we want to commit ourselves to the song so we're going to give you a deal only based off this song so the amount of money that we're going to give you instead of giving you five hundred thousand dollars we're gonna give you fifty thousand dollars in just focus on this one song we're gonna take some intellectual property ownership over this record we're gonna help you promote this record we're gonna make this record as big as it can possibly be now in the process of the record becoming big what we also want is first right of refusal which means if the record blows up and then you become a star we also would like to have the first shot assigning you or have we have to have the option to say no before you go somewhere else to someone else right that's the whole concept of a single deal is basically saying you're not all the way there yet but your song is maybe you'll get there but let's just test the waters there a little bit more before we jump down something as serious some for album deals or something of that nature now is that fair for the artist absolutely you have someone else investing in a record and you pretty much get to get away scot-free and enjoy and go south however a lot of artists have bigger dreams they see themselves as a bigger person so it really just kind of depends alright but that's how a single deal is structured it's all about the record and getting the record out there Jeremih to my knowledge well he did birthday sex had a single deal that he turned that into a whole career so it kinda pens on who you are your situation your work ethic your talent and what you're able to do your team et cetera et cetera last deal that I'll talk about I don't even think I'll talk about it we'll talk about it on the next one because it's a lot more dynamic and this videos already long so in the next section we'll talk about distribution deals because that's still considered somewhat of a record deal even though it's not a traditional record deal but let's talk about distribution deals so you guys can know what that is because a lot of people still throw the term out their distribution I don't want a distribution deal and so we'll talk about what that used to and what that is today and why people want those types of deals and hopefully this guys this will help you guys out now I'm doing all this videos just to really add value to you guys a lot of people who are out here you know striving for deals or striving for you know success in situations that they don't understand some give you real high-level understandings of all the different types of things that you may come in contact with and hopefully this helps because a lot of times it's not the last deal that screws you it's the earlier deal that screws you but the last deal could also screw you so understanding what all these deals mean and what they stand for and the purpose behind them and why you're signing them and why people are thinking this way is important that's why I'm doing this to try to get add a little bit more knowledge in the community now I don't know everything but I do know a lot about a little and a little bit about a lot and every time I hear from this camera I give you guys everything that I got I mean it's late I just left the show it's like 1 o'clock in the morning or something like that I've been running around all day we did a show booked an event it was crazy they did their thing now I'm here recording the show for you guys because I want you guys to win and be successful so let's get to it you know I'm saying like subscribe share go to the website WWII comm go to Instagram and follow me on Instagram reach out DM go to the website reach out you can I really respond to the stuff that's on the website there's a whole text number at the bottom of the page and the website you can shoot me a text we can holla we could talk there's a whole bunch of information on the website to help people win and help people grow and that's all we're trying to do with phase 6 so uh I don't know everything but I know a lot of little a little bit a little bit about a lot and I'm trying to give you guys everything that I got his face things like



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Welcome back to Phase Vi, Its your favorite music businessman Sirr Love with a great topic for today, Record Deals. What Is the Deal With Record Deals? Are You Ready? Let's Beam In! Vote on future videos, feedback & testimonials https://goo.gl/forms/9ZJAFpTKmCnEEqz73

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