This is the question I am asked most frequently-- obviously by people who don't know me, because those who do know me ask me how they can sell more records on their own, not how can they get into a slave contract and become a sharecropper. But once again, for those who don't want to do for self, I will attempt to break it down from my vantage point.
I basically see three ways to get a deal in this industry; and let me preface this by saying that I AM talking about a rap record deal with a reputable record label that has a track record and that has experienced some success in the rap music industry through selling records. I'm NOT talking about the bogus labels that spring up daily all over the country with a business card printed last night at Kinko’s that says they are a record label.
Real legitimate record labels have a staff, they have proper financing to market and promote their releases after they record them, and they have experience and connections in the music industry with radio, retail, and promoters. The bogus labels should be avoided at all cost until they have a proven track record, as most of them can't even do as much for an artist as the artist can do for him or herself. And I'm certainly NOT talking about the labels or pseudo distributors that already exist within the industry yet can't seem to sell more than 30,000 records, even with a talented artist.
So, I see three ways to get a deal (that you'd want to have) in this industry:
1. Get put on by an established artist (but bear in mind that you may only be as successful as that artist. It's rare that someone puts you on and you blow up larger than they are). This means coming up under Busta Rhymes, Jay Z, Kanye, BG, Jeezy, T.I., 50 Cent, Nelly, Eminem, Dr Dre, etc. With any luck, the artist who puts you on is fair and doesn't do to you what was done to him when he was coming up.
2. Create a buzz. In a perfect world, you want everyone in the industry and on the streets talking about you before you get signed. Young Buck was a perfect example of an underground artist who had a very strong buzz when he was coming up. The trick is to keep it going til you get signed and then turn it up a notch so that the whole industry is buzzing about when you're going to drop (50 Cent is a great example of someone who kept up the buzz). This option usually takes many years to land a good deal.
3. Sell units. This is, of course, my favorite method because it proves to the labels you can sell, which reduces their risk and gives you negotiating leverage. Therefore, you have more control over the "fairness" of your deal, and often a choice of labels to sign with. In a perfect world, you want to be with a label that not only believes in you, but has an experienced hard-working staff in every department that can really make your project happen. Plus, a nice bidding war never hurts…
The average record deal for a new artist starts around $125,000 and 12 or 13 points (which really means 12 to 13 percent of the retail selling price after you pay back all the expenses) for an independent label or a subsidiary label, and $300,000 and 16 points at a major label. There are far more indie labels and sub-labels than there are major labels, so it is obviously more difficult to get signed directly to a major label. The plus of being directly with a major label is that there is no middleman. Dr Dre’s label Aftermath is directly with Interscope which is a major label. Eminem’s Shady Records is signed to Aftermath which is signed to Interscope. 50 Cent is signed to Shady via Aftermath at Interscope. That’s a lot of hands for money to pass through, even figuratively.
Most money spent to sign and promote an artist is recoupable. “Recoup” means paying back most of the expenses before you receive any back end payments (points are back end payments). I can count on one hand the number of rappers I know who've ever even seen a back end payment such as a royalty check. Most rappers make money by getting advances prior to working on the next release, always in an unrecouped position of owing money to their label.
The way to increase the figures in any deal, in favor of an artist, is for the label to realize that their risk is reduced. A label takes a risk when signing any new artist (risk meaning that the label could dump hundreds of thousands, or even millions, of dollars into an artist's career and the artist might only sell 10,000 records, which means the label loses a lot of money), but anything that can reduce that risk is considered a plus, and rewarded.
I basically see three ways to get a deal in this industry; and let me preface this by saying that I AM talking about a rap record deal with a reputable record label that has a track record and that has experienced some success in the rap music industry through selling records. I'm NOT talking about the bogus labels that spring up daily all over the country with a business card printed last night at Kinko’s that says they are a record label.
Real legitimate record labels have a staff, they have proper financing to market and promote their releases after they record them, and they have experience and connections in the music industry with radio, retail, and promoters. The bogus labels should be avoided at all cost until they have a proven track record, as most of them can't even do as much for an artist as the artist can do for him or herself. And I'm certainly NOT talking about the labels or pseudo distributors that already exist within the industry yet can't seem to sell more than 30,000 records, even with a talented artist.
So, I see three ways to get a deal (that you'd want to have) in this industry:
1. Get put on by an established artist (but bear in mind that you may only be as successful as that artist. It's rare that someone puts you on and you blow up larger than they are). This means coming up under Busta Rhymes, Jay Z, Kanye, BG, Jeezy, T.I., 50 Cent, Nelly, Eminem, Dr Dre, etc. With any luck, the artist who puts you on is fair and doesn't do to you what was done to him when he was coming up.
2. Create a buzz. In a perfect world, you want everyone in the industry and on the streets talking about you before you get signed. Young Buck was a perfect example of an underground artist who had a very strong buzz when he was coming up. The trick is to keep it going til you get signed and then turn it up a notch so that the whole industry is buzzing about when you're going to drop (50 Cent is a great example of someone who kept up the buzz). This option usually takes many years to land a good deal.
3. Sell units. This is, of course, my favorite method because it proves to the labels you can sell, which reduces their risk and gives you negotiating leverage. Therefore, you have more control over the "fairness" of your deal, and often a choice of labels to sign with. In a perfect world, you want to be with a label that not only believes in you, but has an experienced hard-working staff in every department that can really make your project happen. Plus, a nice bidding war never hurts…
The average record deal for a new artist starts around $125,000 and 12 or 13 points (which really means 12 to 13 percent of the retail selling price after you pay back all the expenses) for an independent label or a subsidiary label, and $300,000 and 16 points at a major label. There are far more indie labels and sub-labels than there are major labels, so it is obviously more difficult to get signed directly to a major label. The plus of being directly with a major label is that there is no middleman. Dr Dre’s label Aftermath is directly with Interscope which is a major label. Eminem’s Shady Records is signed to Aftermath which is signed to Interscope. 50 Cent is signed to Shady via Aftermath at Interscope. That’s a lot of hands for money to pass through, even figuratively.
Most money spent to sign and promote an artist is recoupable. “Recoup” means paying back most of the expenses before you receive any back end payments (points are back end payments). I can count on one hand the number of rappers I know who've ever even seen a back end payment such as a royalty check. Most rappers make money by getting advances prior to working on the next release, always in an unrecouped position of owing money to their label.
The way to increase the figures in any deal, in favor of an artist, is for the label to realize that their risk is reduced. A label takes a risk when signing any new artist (risk meaning that the label could dump hundreds of thousands, or even millions, of dollars into an artist's career and the artist might only sell 10,000 records, which means the label loses a lot of money), but anything that can reduce that risk is considered a plus, and rewarded.
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