Which label to choose

It may feel like a difficult decision as there are hundreds of labels to choose from. You should obviously start from the labels that release the type of music you enjoy. You should not randomly send your track to dozens of labels hoping some will take it! This may eventually get your tracks leaked or otherwise rejected by many labels.

Bigger doesn't mean better. If a label like Armada picks your track it doesn't mean Armin is going to playlist it everywhere and include it on the asot compilation. They may spend a lot less resources to it than some smaller label would! A big name DJ doesn’t mind on which label the track has been released to spin it, as long it sounds good.

If your track has been accepted by more than one label, be patient and carefully choose which deal benefits you more. Many do the mistake and sign the first deal they get immediately without carefully considering it first.

Once you have chosen the label, and they treat you well, stick with them!
If they see you signing tracks to other labels as well, a loyal relationship most often cannot be formed. If the label however does not treat you well, leave them. If only everyone did this, we would soon get rid of the labels which do not respect their artists.

If your track is rejected by many labels, it just may not be good enough, even if there was some small label willing to release it. The standard some labels have these days is just too low. If you don't even like the track yourself, then simply leave it unreleased! You don’t benefit anything from releasing a bad track. If you are here just to collect different labels to your discography you have misunderstood the whole idea.


Why to be cautious with small labels

It's dangerously easy to set up a digital label. Anything from 10 to 100 new digital edm labels are formed each month. It can be founded by any person at any age, with any, if any, experience from the industry. Some of the labels aren't even properly registered. The official registration
is done by filling a few forms and paying a small fee (50-200e).
Getting a digital distribution deal with online stores (itunes, beatport, cjdshop etc) is completely free and just requires filling a few forms.
The label can be up and running in a few days. In practice a digital only label is completely free to run. Typically their overall turnover is just a few hundred Euros a year. As most edm fans are tech-nerds, getting a fancy looking website is not a problem either (so don’t let it fool you).

In the end most small digital labels have no money, knowledge or contacts in the scene. You benefit nothing by making a deal with them. At least make sure how exactly are they going to promote and market your music if you make a deal with them.

Dealing with the A&R

A&R is the guy who decides whether the label is interested in signing your track or not. He often has to listen to several hundred tracks a month, so don’t expect feedback unless he is interested in releasing your track.

If the A&R is interested in your track he will contact you asap. He is there
to negotiate a deal with you and answer all the questions you may have. If the A&R doesn’t answer your questions properly or is otherwise acting carelessly, it is a sign you shouldn’t be dealing with the label! There are a lot of unprofessional A&R guys on the market.

Contracts

A contract is always a contract. If you sign it, you must obey it. Contracts are often complex, so If you don't understand them, don't sign them! You can always ask the label if there's something unclear. If they are unwilling to explain it clearly then don’t do business with them. Avoid signing "one page" contracts. If something important is left unmentioned, it can later be made up by the label.

If you sign a bad contract, it's essentially your own fault!

As a newcomer, with mediocre track, you don't have much to say about the contract the label offers. You either accept it or not. If you happen to have real hit material the label is probably willing to negotiate about the terms with you.

The use of lawyer

When dealing with major labels having a lawyer is essential. The contracts are complex and big money is involved. But when dealing with typical trance labels, like armada or blackhole, a lawyer is not usually required or even worth it.

Most important terms in the master agreement explained briefly:

Rights: Exclusive/Inclusive. Under exclusive term the label owns exclusive rights to sell the track and decide what to do with it. Under inclusive rights the artist has more control over the track and can offer it to other labels. So obviously labels prefer to have tracks exclusively. Life-time exclusive right is hardly ever a good thing, but then again if the track is not a hit material, it's unlikely other labels would be interested to have it later.

Royalty rate: A percentage that indicates how much you get from the money your track generates. There's usually a different percentage for digital, physical and 3rd party releases. You want to have these around 50%. With digital singles anything less than 50% is unfair to you. With physical in-house releases the label has much more expenses to cover so they have a reason to keep this percentage low, something around
16-20 is acceptable. 3rd party releases, such as compilations, are an important part of the income. No reason for the label to get more than 50%!

Deductions: Whether the label is allowed to deduct the distribution and/or manufacturing fees from your paycheck is highly questionable. It’s not really your job to pay their bills! You are obviously earning nothing if there are several people taking their share until something ends up in your direction. And it really is you as an artist that should be getting most of the profit, without you there wouldn’t be any profit. Rather sign a contract where the label is not allowed to deduct manufacturing and distribution fees. At least make sure the label is not deducting something like CDjshop CDs. I have caught one from doing so. They are free for the label!

Advance: Is an advance of the sales. It may be described as a symbolic gesture where the label shows trust in your music by paying some of the profit beforehand. Any decent label will pay you an advance; any serious artist will ask for an advance. If advance is not paid it generally shows the label doesn't have much trust in your music or it is financially unstable. Typical advance for a single is anything from 100€ to 3000€.

Statements: Should be paid twice a year during certain period of time. Make sure they do that. Statement being paid 5 months late is not acceptable. Also be careful that they indeed pay you the full amount, it is easy for the label to be a bit dishonest if the artist doesn’t know how they are calculated.