[password-protect]
Record Deals for Artists: Distribution & Demo Deals Explained

Written by Ian Steaman
A&R scout Ian Steaman (Queen Latifah, Naughty by Nature, House of Pain), gives you the 411 on standard record deals, demo deals and distribution deals.
Q. Yo, Ian: How to get a distribution deal? Thanks, Tony.

A: Hi Tony,
Many people who have done a little research on the music industry decide that rather than go for an artist deal, they want to get a P&D (Pressing and Distribution) deal. The reason for this is you can potentially make way more money as instead of getting a per-unit royalty rate of between (typically) 10 and 22% of retail price of the CD, you pay a fee to the distributor (normally a major label offering such a deal with their distribution arm doing the actual distribution) and keep the rest of the money. Sounds good, right? You’re probably saying to yourself: how do I get in on that action and why doesn’t everyone do this?
Well in a true P&D deal, the “label” being distributed pays for and does all the marketing (e.g. shooting the videos, doing the press and radio mailings, pay radio promoters, all the advertising etc.) as well as paying to record the album. In reality, what has historically happened is that artists with some kind of leverage from being down with a major management team or having a previous tracks record from having significant independent sales (e.g. Master P’s No Limit Label or the New Orleans hip hop powerhouse Cash Money Records both of whom did distribution deals with Universal Records) would get P&D deals under which they would receive an advance against expected future sales then pay an additional fee for marketing and promotional services from the distributing label.

If you are a new artist with no history or track record, there really is no incentive for a label to give you this type of deal and you will likely be offered a standard artist deal if they want to work with you. To get to the point where a P&D deal is a viable option for you takes a tremendous amount of work and resources: building a track record of independent sales success by self-releasing your albums or coming to the distributor with a finished product and marketing plan with financial resources and the proper staff in place in order to execute the plan.

Ultimately this can be a more satisfying way to go as you build company with a catalog of masters and assets that you own but it is very hard work. Some artists have made this work for them but for many others, trying to become a successful, accomplished artist is enough work in itself and trying to achieve a P&D deal becomes a distraction.

If you don’t have that entrepreneurial zeal but do want to become a recording artist, you should keep your focus on landing a recording deal and forget about distribution.

Q. Hey Ian: How can I get started running my own indie record label? I mean the money…and money for what…? Can you give me a break down of the first year’s expenses to budget for…with one artist signed? Please include incorp. fees, attorney fees, record pressings, etc. Thanks! –Aly

A: Aly, this is very tough question to answer in short and without more information.

Your costs will depend on many factors some of which you have mentioned but also on others such as the type of music you are planning on releasing and the level of marketing and promotional resources you are willing and/or able to commit.

My first suggestion would be this: think about the type of records you would like to release (albums, compilations, singles) and whether you want to license already-recorded material or sign and record acts to your label. You are also going to need to develop some sort of business plan to figure out your game plan including forecasts of your expected sales revenues and expenses. Business plans are normally used to raise investment funds but can also be used as a template for an entrepreneur to follow as they develop their company.

This is not really my area of expertise but I urge you to do some research on writing a business plan first. Getsigned.com also has some great books in their store that will help you with the step-by-step details on how to start your label.

Q. Dear Ian: I am a drummer for a modern alt-rock band. My band members and I continually reassure ourselves that we are going to get signed. We will be recording a 10-song CD soon with unique, original material. My question is this. We are good enough to be signed, yet we are all in college and are in no position to reach the market that our music could tap into and succeed. What would you recommend? Thanks, Jon.

A: Hi Jon,

After looking at your website, this is an interesting question to consider. You say you are “are in no position to reach the market that our music could tap into …” If you are talking about how to go directly for a deal with a record label, that may or may not be true. However, if you are talking about things that can help market the CD you are recording, you are in a perfect position to start building the word of mouth that your band and the CD could benefit from.

First off, you are a college-based band–that means you are in a community with thousands of college-aged music buyers, one of primary music buying audiences in the alt.rock market. Secondly, you have already developed a pretty impressive website (although it’s little confusing for your band and website URL to be two different things, what gives?) that you can use to your advantage from a promotional and marketing viewpoint.

Here are a few ideas to help you get started some of which it looks like you have already applied:

1. put your web URL on every piece of promo material you generate from gig flyers to postcards etc.2. continue to build a database of fans by encouraging sign-up’s on your web site and at gigs. Keep these fans updated on new developments about the band like the CD or upcoming tour dates.3. trade out with bands at other colleges or in other markets, starting regionally, for gigs. If your database is a decent size (a few hundred or more) ”mine” the data and try to identity if there are other pockets of interest that could be parlayed into shows in other markets.4. trade out web links to your site with other like-minded groups.5. start an online street team to help generate word of mouth on the internet. Starts with genuinely passionate fans of your group who can help spread the word in chat rooms or on message boards for similar acts.

Things may start slowly at first but, if your group has the goods musically, you’d be surprised how effective these ideas and others like them can be at helping to start spreading the word and the more likely you are to put your yourself in a position where labels might want to consider signing you.

Q. Dear Ian,
I am working with a seasoned rock band that is in an odd situation. They have been together for a while an have some really great songs. They have spent many hours in the studio and on the stage. At this point we are producing a four or five song demo. The oddest thing…. they have a video. Not a home made video. The production team that produced the video have done major motion pictures. The budget for this video was around $150,000.00.
We are taking the following steps.

1. Produce a pro quality demo.2. Image overhaul.3. Build Press Kits and bio.4. Shop the whole package.

My question is this:

After all this work, I do not have enough ‘biz contacts to get this project in front of. What are my best sources to find people who can get this band a deal? Sorry for the long lead in, but I thought the more information the better. Thank you for your time.–James

A: Hi, James,

Honestly, this is both a good and bad situation you find yourself in. Many acts dream of being able to shoot a pro quality music video. However, most only get this opportunity once they have signed a deal with a major or large indie label.

This is normally the best situation, because this allows the group to continue to develop and mature in terms of their sound and visual style with the help of their A&R rep and marketing staff until everyone feels comfortable that the group has reached the sound and look that best represents the band. Your problem in a sense is that you’ve put the cart before the horse due to your turn of luck.

Based on your letter, you say this is a seasoned band with a lot of live experience and some good songs already written. Taking you on your word I would assume video is good representation of what the group can do visually and in terms of their look and performance chops. If that’s the case, then your video can only be a benefit to your demo package.

However, you also mention that the group is undergoing an image overhaul which suggests that there might still need to be a lot of work done before this group should be shopped to labels for a deal. If that’s the case, it’s important that you don’t try to overhaul everything to confirm to the video because, at the end of the day, while a high end, professionally-produced video, can help, it will not be the reason your band get signed. Greats songs, charisma, compelling presence and amazing live performances, amongst many other factors, will be key to convincing a label to sign them.

That being said, the way you will get through to labels is the same whether your have the video or not. Your group needs to build their profile as an unsigned act to generate a greater buzz. You can use the video to get the group more gigs or perhaps other marketing opportunities that can help build buzz. Sometimes setting up a showcase in distant markets for the group can be cost prohibitive, but sending a copy of the video to represent them isn’t so, as you can see, there can still be multiple applications for the video even though it’s unlikely it will be the catalyst for getting your group a deal.

Q. Hey Ian: Is it more important to get attention through a large fan base before any label will be interested in the music, or is it regular practice for bands to go directly to the label (solicited of course), and get a record deal?–Will

A: Hi Will,
It’s not really an either-or situation between the two options but rather, the former is increasingly becoming a prerequisite to getting any serious attention from a label.
If, like the vast majority, of unsigned acts, you are not connected to a manager, production company, music attorney or other music industry professional with inside relationships to labels who can walk your project in, building up some word of mouth, profile or buzz by touring and creating your own fan base, is the most likely way to get some label attention and land a deal.

Even if you do have inside connections to get your project heard, labels are still going to want to know what kind of steps have been taken to develop the project so that they are not gambling on a completely unknown quantity.

Obviously some artists do get signed without having developed any kind of track record (as an example, Avril Lavigne, one of the biggest, success stories of the past year, was largely unknown before her ascent to stardom). However the more pluses your project has in it’s favor such as a developed or regional fan base from touring or indie CD sales, the better your leverage in terms of landing a deal or negotiating more favorable deal terms in your artist contract.
[/password-protect]