Recording Commitment: Opportunity or Obligation?

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A university student recently asked me if Artists view the album Recording Commitment in their recording contracts as opportunities or obligations. To put this in context, most recording agreements today provide for a "Recording Commitment" which is linked to the Term of the Agreement. A simple example would be if the Agreement provides that the Term will be for an "Initial Period" of one year. However, the label will have options to extend the Term of the Agreement, year-by-year, for a specified number of years. EXAMPLE: A Term for an Initial Period of one year with the label having options to extend for five additional periods of one year each. The Recording Commitment might provide that the Artist will record one Album during each contract period. Thus, this Artist could possibly be required to record six albums for this label.

Back to the question: Do most Artists view the Recording Commitment as an opportunity or an obligation? A good lawyer answer is: "Both!" It depends, at least in part, on where the Artist is in his or her career. Most Artist's entering into their first recording agreement are going to be looking at this as an opportunity--not as an obligation. However, as the number of required albums increase, the more it might be viewed as an obligation. Since the options to extend the recording agreement belong to the label--not to the Artist--I think most Artist's would prefer that the deal be for a lesser number of albums. The thinking is that if the Artist is a "star" by album 3 or 4, he or she would like to be free to negotiate a better deal with the same or another label. (In reality the label will usually renegotiate the deal with the Artist once success is achieved even though they are not contractually obligated to do so.) Experienced entertainment attorneys understand the long term ramifications of the length of the Term of the Recording Agreement and will generally try to negotiate these provisions so that the Artist's Recording Commitment will be on the low end. The label, on the other hand, will argue that since they took the initial risk by investing substantially in an unproven Artist they should be entitled to benefit on the back-end after the Artist achieves success.

A final note: While major label deals for a new artist will typically be for 6 or 7 albums, the Term and Recording Commitment for a first time artist signing with an independent label varies widely.