The New Deal: major label contracts revisited

Now that the majors are experiencing a dramatic shift in their business models, what do contracts look like? What clauses have been phased out and what is now standard? What are major labels asking from artists and what are they offering in return?

Bryan Calhoun Owner and Founder, Label Management Systems
Wayne Halper Attorney, Law Office of Wayne Halper
John P. Kellogg, Esq. Assistant Chair Music Business/Management, Berklee College of Music
Marcy Rauer Wagman CEO, MAD Dragon UNLTD, Drexel University



Panelists from left to right: BC(moderator), MW, WH, JK

05:05 PM EST - BC: What are some of the issues you see dealing with the industry today?

MW: There are limitations now, such as a cap on songs you'll get paid for. For example, hidden tracks, or tracks that are less than 2 minutes, artists will not get paid for it.

JK: One good thing under digital reproduction is that a full rate has to be paid. Also, the number of albums labels insist on in the contracts have been reduced, which is seen as a success.

MW: Definitions of terms are critical; they are designed to be confusing.

WH: Looking at the bigger picture, there won't be any records labels anymore. I see them more as entertainment companies or entertainment vehicles. The real issue at hand is what do record labels deserve? There needs to be a balance.

05:22 PM EST - MW: One thing that has truly changed is that artists can have a direct connection with their fans. For example, sites such as myspace. To me, instead of having a traditional adversary relationship, maybe it's time for artists and labels to look at each other as partners.

WH: Lets look at the cycle of things when artists got a small percentage. Who is the evil culprit here? Artists and lawyers are seeing the money and no one really cares because the profits are there for everybody. Today, things aren't working anymore with digital changes. We haven't adjusted/reacted to the issues.

05:25 PM EST - BC: What are the labels doing to help exploit revenue streams with the new technology?

WH: If labels aren't doing enough to help those artists with new technology mediums, shame on them.

MW: They're not doing enough to help. The sources are coming from other groups.

BC: If the label is now becoming the manager, can you create an environment where everyone wins?

JK: Every company is going to have their own priorities. It depends on how the revenue is moving, or to how they see the potential of their artists.

05:32 PM EST - BC: Huge corporations have major departments that don't even know each other. Now that they are asking revenue from everything, are these departments working better together?

JK: The labels I have had experience with are now just starting to speak to their in house publisher. It's amazing it had to get to this point for better communication between the two.

WH: There are still a few major and independents are still prepared to start a new company.

MW: There are more bands I have worked with who are walking away from major label deals. Musicians want their own their publishing rights.