Due to the legal complexity of contracts involved in recording deals, it might be hard to grasp due to the use of words commonly used in the music industry but unknown and sounds vague to the new artist, it would be of benefit to any artist to understand certain terms and jargons used in recording contracts to avoid any issues that would arise as a result of having barely no idea of what was to be signed.

Exploitation Period

The exploitation period is the period during which the label can use recordings that are made under the agreement. this gives the artist limitless freedom and can exploit other music labels.

Contract Period

This is the period when the artist agrees to all the terms and conditions regarding the contract right after the contract is signed. It is the period in which the artist is exclusively bound to the label. The master rights produced during the contractual period are handed to the label. This limits the freedom of the artist.

Recoupable cost

This refers to a standard term used in most recording contracts applied to some of the initial payment made by the label. Until the label gets back all the expenses used for the recording, all the recording royalties of the artists would be used to settle the recoupable cost.

Artist Advance

This is an initial upfront payment given to the artist who has recently signed to a music group or record label, against the future contractual cash gained. It is considered a prepayment on the artists royalties. Practically, the artists would earn additional royalties above the advance only after the artist’s royalty shares exceeds this payment.

Royalties

A royalty is a recurring payment in exchange for permission to use something. In music, royalty refers to payments which are paid to performers and recording right holders from businesses and broadcasters.

Royalty Rate

The percentage of revenue paid to the artists, producer or songwriter for the sale of each album or single is what is termed royalty rate.

Single

Single is a song released as a stand alone recording.

Album

An album may contain any number of tracks, comprising of a minimum total playing of 15 minutes with at least 5 distinct tracks or a minimum total playing time of 30 minutes with no minimum tracks required.

Sound recording Copyright

This is the legal right to produce and distribute a specific recording.

Options

Options designate the right of labels that release a record in order to release a subsequent record(s). For artists releasing singles, it’s not about how many options you grant a record label but also the period in which the record label ha to take the option.

written by Ruth Ama Onumah