The majority of upcomers out there are dēsperate for fame. They will do anything to be on top of the world without thinking about the price. This is why many of them sign with record labels today, only to rēgret it later. We saw Ruger complaining about living in a one-room apartment while his music was making millions for D'Prince, and we just laughed.
There are many types of deals, but today, let's talk about Ruger's case and his kind of record deal:
Most of the time, a record deal is a huge loan given by a label to an artist. This loan is used to promote the artist and take care of all their activities. The record label does this hoping the artist will go mainstream and generate huge money to repay them, leading to significant profits.
Let me elaborate with an example :
A talented, dēsperate upcoming artist like Ruger back then signs a 360 record deal with a label (Jonzing World). Usually, if the record label owner is very kind, they will agree to give you 10% to 20% of the profits your music makes, excluding their loan. It's business and also a rïsk they are taking.
Your deal entails a loan of 2 million dollars, which means the label borrows you 2 million to invest in your music. This is what you will see on paper, but will they give you the 2 million? The answer is NO.
They can give you at most $500k in your account. That's huge money, right? This money is for you to change your lifestyle—buying clothes, cars, houses, and other luxurious things. Fans will think you are living your best life, not knowing you are spending a loan which makes your net worth nēgative.
Long story short, now you owe the label $2 million.
When you remove the $500k, the remaining 1.5 million will be used on you in these ways:
- The record label pays the best producers to produce your music. The producer might work with you for over a month and get paid about $50k. That $50k is part of your loan (the $1.5M that was left). Trust me, they will make sure they get you the most expensive producers so you spend this loan as fast as possible.
- They pay top music streaming platform owners to add your song to their playlists (from YouTube to Apple Music and Spotify).
- They pay Billboard, and you start appearing in Times Square. All these might cost you $500k.
- You need to go on tours: air tickets, hotel reservations, and all the rest, costing over $100k in total.
- They pay the media to promote your songs as intensely as possible and pay bloggers.
- You will need a manager and PR, all provided by the label.
Before you know it, they have spent the remaining $1.5 million on you already and are expecting that your music sells so they can collect their money back.
The artist might end up spending even more because the label will make sure you spend most of the money and more.
Now you owe the label $2 million.
Let's say you blow up and your music sells about $5 million that year. This is what happens:
Immediately, the $2 million you owe the label is removed from the $5 million. Now $3 million is left. You signed a 10% to 90% deal with the label. 90% of $3 million is removed. Now you are left with $300k.
You signed a 360 deal too, so all money from your shows is distributed 90% to 10%.
The question here is: Will you make up to $2 million?
If you can't make it, then you are trapped. You owe the label millions and have nothing to back you up. You now become the label's property.
This is the reason why many artists get dēpressed after signing to labels. After getting famous, they don't see themselves paying back the loan in the next 10 years.
We saw what happened to Mohbad after he left Marlian Music. We saw Ruger and many more.
Dear Upcoming Artists 🙏,
I am not saying you shouldn't sign any record deal. In fact, it's the fastest way to get into the music industry. But be careful with what you sign out of desperation.
We know you want to be famous, but be careful with what you sign. This is very common with big labels across the continent.
SOURCE:Music Base Africa.
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