How To Get A Record Deal

By, Wendy Day from Rap Coalition (www.Rap-Coalition.com) 3.07

Yeah, I know I’ve already written about how I see artist getting deals in this industry, but I still get over 100 calls and emails a week asking me this same damn question, so it looks like I’m going to have to write about it yet again.

Almost every artist I know wants a record deal.  There are basically three types of record labels that offer deals: 1) independent record labels, 2) major record labels, and 3) those in-between labels that consider themselves “incubators” or “independent distributors.”

An indie label is a record label that has independent distribution (meaning distribution that is NOT part of a major label pipeline).  Examples of current indie labels in rap include Swisha House (Houston), SoBe (Florida), etc.

A major record label is one of the Big 4, and they are called major labels because they have their own major distribution companies attached that have a tight lock on the industry in terms of traditional distribution (traditional distribution means CDs sold through retail stores, which is slowly reducing in importance with the rise of the internet).  The major labels include: Universal (Def Jam, Motown, Republic, Interscope, and all of the sub-labels with deals through those labels, such as Corporate Thugz (Jeezy’s label), G-Unit (50’s label), Shady (Em’s label), Slip-N-Slide, etc); Sony BMG (Sony, Jive, J Records, etc), EMI (Capitol and Virgin, which seem to have just merged); and WEA (Warner Bros, Atlantic, and all of the sub-labels such as Bad Boy, Grand Hustle (TI’s label), etc.).

An incubator, as they exist today (in my opinion, which does NOT necessary reflect the opinion of this magazine or any of its employees), seem to be a middle ground for artists and indie labels that the majors do not yet feel can compete 100%, yet have enough value for them to sign to deals.  The deals are smaller, the resources are less, and often if the artist or label experiences any success at all, they are upstreamed to the major label affiliated with the incubator.  This includes Asylum (WEA’s incubator), Fontana (Universal’s incubator), and Imperial (EMI’s incubator).  The incubators and distributors seem to attract the smaller artists and labels who can sell between 50,000 CDs and 300,000 CDs.  If the incubator feels the artist can go Gold or Platinum, they often upstream the project to the major label (the best examples of this are Paul Wall and Mike Jones, both of whom upstreamed to Atlantic and Warner Bros from Asylum). Upstreaming usually occurs at a pre-agreed upon amount of money, which benefits the incubator because it enables them to sign deals for less money when the artists have far less leverage.

An indie distributor is a self-distributed company that takes on projects because they feel they can make a profit.  Examples of rap distributors are Select-O-Hits, Navarre, RED, TVT, Koch, etc.  Although each deal is as different as the distributor, most indie distribution deals are 80/20 splits (the indie label getting the 80% while the distributor makes the 20%).  Some of the indie distributors act kind of like labels (Koch and TVT) offering small advances and offering services (for a fee or a larger percentage split, or both) to the artist or label such as radio, video, marketing, etc. 

Income from record labels and distributors depends on many things:

So, how do you get signed to a deal at a record label whether it’s an indie, a major, or a distributor without coming through one of the sub-labels (a sub-label is G-Unit, or Shady, or Slip-N-Slide, or Grand Hustle, etc)?  First of all, you need a strong buzz, good music, and lots of leverage.  Since this is a business first and foremost, whoever signs you will have to believe they can make a lot of money by putting your project into the marketplace.  The economy in the music industry sucks right now.  Rap sales are down, in fact they are at an all-time low.  Music sales over-all are in the crapper.  At a time when free downloading of music from the internet is at high levels, the amount of good quality music and delivering what fans want, are at an all time low, as well.  This makes for a weak music economy for record labels, which translates into less risk, lower deals monetarily, and smaller budgets.

Since 1996, the way that I have personally seen artists getting signed to successful deals is through having strong leverage.  I’m not talking about just getting signed to a record deal.  That’s not enough!  I’m talking about getting signed to a deal that will come as close to a guarantee of success as possible.  If you look at the deals I have negotiated over the years, almost all of the artists have gone multi-platinum.  Just being signed to a label is not enough—many, many, many careers are killed by well-intentioned labels (and some not so well-intentioned labels, too). 

You must get signed to a label that can create phenomenal success for you, create a lasting career, and allow you to share in as large a percentage of your financial success as possible.  This takes team effort on the part of the label and the artist. 

The best way to build strong leverage is to put out your CD independently in your own region.  Once you sell about 30,000 CDs (verifiable by SoundScan) and get some radio spins, the labels will clamor to sign you.  At this point, you should have enough leverage to get a top deal with a major label that has the resources to push you to international fame and financial success.  Or, you will have enough leverage to get a wonderful split and enough money to push your own release further with an indie label or distributor that has a track record of success in doing this for other rap releases.  All labels are not created equal.  Make certain that you pair your type of music and sound with a label that can excel at that type of sound. 

Without having some leverage, finding a deal will be a huge frustration for any artist.  I have seen many artists over the years spend a grip of money at radio to get some strong BDS spins (labels begin to get excited when they see an unsigned act hit about 200 to 250 spins a week at BDS) with the intention of getting signed to a major label. [BDS is a company that measures radio play for the music industry and you can get more details of how they do it and who they are at www.rapcointelpro.com).]  The problem with artists who try to get signed through radio play is that it is not enough leverage to convince the labels to take a risk on signing the artist.  A lot of radio play does not necessarily turn into strong CD sales.  I can name MANY artists who’ve had a lot of radio play but did not sell in proportion to the amount of spins (D4L, Jim Jones, Terror Squad, David Banner, etc).  This makes labels very leery to put millions of dollars in promotion behind an artist who has only garnered radio play-- especially if that artist has hired a radio promoter to get the spins up to a high level.

The only proof of potential sales ability, is for the artist to actually get out there regionally and sell CDs.  The thinking behind this by the major labels is that if you can sell 30,000 CDs in your region yourself, with the strength of a larger label behind you with their pipeline, you will sell hundreds of thousands of CDs nationally (possibly even millions, which is the ultimate goal). 

For the artist, selling 30,000 CDs on their own through an independent distributor, like a Select-O-Hits for example, means close to $200,000 or more in income.  With income from sales, this makes you less desperate to take a bullshit deal, and it creates a financial starting point for the larger labels in signing you.  Releasing a record is hard work and has expense involved.  You will need money to market and promote the release, so this is not for everyone. 

Many artists are not willing to grind to sell their own CDs.  But, I have never seen an artist get a good deal from shopping a demo around to the labels.  I have seen many, many artists get great deals that have built successful careers by putting out their own CD and creating the necessary leverage to have value to a larger label.  For me, it’s the only way to go!