Term and Options
term and options
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term and options -
Picture this. You’re blowing up on TikTok. You’ve done a few sellout shows in your hometown and record labels are starting to pay attention. Next thing you know you’re sitting in Atlantic records with a contract in front of you.
You reach for a pen but hesitate at the signature line. The contract says the term is 3 years plus 5 options. You don’t understand what that means so you ask the label representative. The representative shrugs, says it’s “industry standard” and urges you to sign.
“What should I do?”
To keep it simple, the term on a record contract is the minimum duration you are locked in with a label. Options are options. Usually at the label’s discretion but the label can choose to extend your agreement for an additional “option” or year.
For the scenario above, the artist would be locked in with the label for a 3-year term and have the possibility of staying with that label for an additional 5 years.
Why does this matter?
For an artist, the best thing to do is negotiate the term and options to be as low as possible.
Why?
Many times when artists sign with labels, artists are giving away their masters in exchange for an advance or upfront money.
If the artist reaches more success while at that label the artist isn’t entitled to any additional money. This can lead to an artist being locked in a term where they aren’t making money and are expected to keep making music for the label.
Keep your terms and options low!
