Q & A
Each month, MusicBizAdvice.com answers your questions about the music industry.
Independent Label or Major Label
Deal, and Questions You Should Ask When Deciding:
Q: An independent label
wants to sign us. Should we take the deal, or should we hold out for a major label deal?
A. Without background
information and knowing what type of music you do, it's difficult to answer your question.
Your manager and entertainment attorney should explain the deal being offered in terms you
can understand, and your manager should also explain the pros and cons of how this deal
would effect your band's situation, vs. a major label deal. If you don't have these
team members in place, get them immediately.
Meanwhile, here are some crucial questions to consider when deciding between signing with
an independent vs. holding out for a major label deal:
1. How large is the independent label? What other artists are on the label, and how
commercially successful are they? What artists have left the label, and under what
circumstances? Who are the executives running the label, and what experience do they have?
2. What distribution channels does the label have? Is the label distributed by a major
label? If not, think twice. The majors still control retail distribution--including where
CD's are placed in stores--and the purpose of signing to a label is to sell CD's. What
retail establishments carry the label's CD's, and how many stores carry them? (Call some
of the stores and ask for the CDs of some of the label's artists. How easy are they for
the store employees to find?) What methods of online distribution does the
label utilize, and how are they actively promoted? What's the label's track
record with this? Get examples of campaigns.
3. What success has the label had in getting airplay for their artists? What stations,
what regions of the country, and how many spins? How large are the radio stations, and are
any of them owned by a large corporation (such as Clear Channel, Sandusky, etc.) that can
then generate further opportunities with other stations across the country? What promotion
company does the label use to get airplay, what are some of the other songs that promotion
company broke, and how recently was it?
4. What kind of financial assets does the label have to carry out their plans for you? Can
they actually afford to adequately promote you, send you out on the road, and do all the
things necessary to break an artist?
5. Who specifically will be the artist's rep, and what's their track record?
If they came from another label, why did they leave their last label? Don't
take them at their word; ask people you know in the business about their
reputation and what the buzz is about why they left.
6. What's the reputation of the company culture? Are they the party company?
The company who does everything with flash? (Careful: you're paying for all
that flash, not the company. That flash is recoupable from your royalties.)
The company with constant staff turnover?
7. What sources of artist income has that label currently asking for pieces
of--and getting--in recent deals?
All of these questions are of course in addition to the usual questions you should ask
about the terms of the recording contract. But that's a whole other can of
worms!
Q&A Home
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Answers in the MBADC Q&A are to be taken as general advice only and are not intended
as a substitute for legal advice from a competent entertainment or intellectual property
rights attorney.
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