New Label: Seeking urban beat makers | advice

[icely2000]

Hello,

Intro: Me and my partner is starting a record label in Florida we're still in the process of getting everything together. Basically have the label formed and will be opening a sister publishing company as well. Our focus will be on the urban genre (hip-hop, r&b, soul, neosoul etc). He is a rapper producer himself, I've always been passionate about music and kinda the "business" brain so needless to say I've been learning a lot about the industry and he's mentoring me on how the music process works. He is based out of Gainesville, Fl and I will be based out of Tampa, FL.

Need: As we're preparing to launch our funding while adequate for producing records, I'm foreseeing that purchasing exclusive rights for beats for each and every song, even at $50 a pop, could become pretty expensive and use up resources that from the label prospective would be much more effective going into promotion (we have a vast arsenal of affordable promotional vehicles we've researched over the last few months), which has brought me here to this form to seek advice and maybe even start discussions with some producers on this form who may be interested in joining the team.

1. Advice/Thoughts: I've been thinking about this particular challenge for us for a while and the only plausible proposal(s) I think that would work and be fair is to offer a non-exclusive producer agreement which would entail the producer(s) agreeing to provide us with the exclusive rights to beats that they produce and we accept for our record in return for a royalty of .5-2% uncapped, or a royalty from the label share of around .5-5% capped at $500 or $1,000 in addition to us providing full disclosure of producer credits such as in the meta data of the music, on Youtube in the description via the promotion of the records etc. The other option, which is my less favorite (of course) would be just have the producer invoice us at the fixed rate of $50 a beat and provide us with flexibility to pay that invoice on net 90 etc. What do you guys think of this? Is it fair? unrealistic?

2. Anyone interested in being a part of our producer network. You don't have to be in Florida (obviously and when we have a record we need a beat for we could send out a blast or contact you individually and see if you're interested in the project and can meet the timelines we have.

So basically I'm seeking a situation that would be mutually beneficial for everyone involved where we rise together. Of course this will all be in the form of a formal contract if we decide to move forward, but in order to keep the legal fees down we need a single contract structural to get the maximum return on the legal expense of paying to have the contract drafting

What do you guys think?

 

[DjayCas]

1. Advice/Thoughts: I've been thinking about this particular challenge for us for a while and the only plausible proposal(s) I think that would work and be fair is to offer a non-exclusive producer agreement which would entail the producer(s) agreeing to provide us with the exclusive rights to beats that they produce and we accept for our record in return for a royalty of .5-2% uncapped, or a royalty from the label share of around .5-5% capped at $500 or $1,000 in addition to us providing full disclosure of producer credits such as in the meta data of the music, on Youtube in the description via the promotion of the records etc. The other option, which is my less favorite (of course) would be just have the producer invoice us at the fixed rate of $50 a beat and provide us with flexibility to pay that invoice on net 90 etc. What do you guys think of this? Is it fair? unrealistic?

Most labels already offer an unknown newer producer atleast 3 percent of the song's value in addition to their upfront fee. Not sure if you're offering that, or a royalty on all of your income from the label to a producer. Both of these options aren't good for anybody.
also "in addition" to providing credits... credits are expected, not a bonus or a perk. thats not a bargaining chip.

Secondly 90 days to give someone 50 dollars for a beat is ridiculous.
that's what 16 bucks a month?
the 50 dollar mark is bad enough... but now the fact they would have to wait for you to agree to it, and im assuming sign paperwork just to look forward to $50 in 3 months is terrible.
most people are leasing tracks @ around 20-30 bucks today with no required paperwork or approval process, you go to their website click a button to pay and have an immediate download of the beat.

who would want to jump through hoops like this?
sorry if im coming off the wrong way but you've gotta understand this is basically slave work youre offering.

 

[icely2000]

Nah you good I'm trying to figure out an approach. While you can least a beat for next to nothing we obviously will need exclusive rights.

For a lot of new and unproven producers a lot of them are looking for opportunities to place their beats and the competition for beat makers is intense so I figured someone might be willing if they know for a fact the music will be produced etc.

The credit thing isn't a perk but there are instances where it's not given let alone promotion of the producer along with the track.

$50 for a beat isn't nothing but when you need custom beats for 5-10 records $50 a popturned into a nice chunk of change that from a label/artist prospective would be better used in the the promotion of the record or project itself.

So a flexible payment term obviously isn't going to be appealing nor fully solve the issue I'm trying to solve. So.....

Do you think a non-exclusive royalty agreement of 3% capped at 2k-3k would be a more realistic approach without an upfront.

Do you have any suggestions on the best way to approach this that would accomplish the goal is freeing up cash for promotion while being a good deal to the producer? Rather established or not?

 

[OGBama]

Are you prepared mentally, physically and spiritually to handle a cutthroat business that has zero love for anyone who wants to get involved? Do you really want the hassle that is running a business in a field where lawyers and attorneys make more than the artists? This should be at the front of your mind as the Internet has changed for better and worse every aspect of the music business. Focus strictly on the new business of music and ignore the old business.

 

[icely2000]

Are you prepared mentally, physically and spiritually to handle a cutthroat business that has zero love for anyone who wants to get involved? Do you really want the hassle that is running a business in a field where lawyers and attorneys make more than the artists? This should be at the front of your mind as the Internet has changed for better and worse every aspect of the music business. Focus strictly on the new business of music and ignore the old business.

Without a doubt the key to the new music business industry is to DTA, put everything in writing, take new creative approaches to challenges (such as the one on this post) and figure out a way to monetize everything and find affordable and effective promotion strategies and leave adequate resources for the actual product, o and put the fans and artists above all else while maintaining a focus on the bottom line.

 

[DjayCas]

Nah you good I'm trying to figure out an approach. While you can least a beat for next to nothing we obviously will need exclusive rights.

For a lot of new and unproven producers a lot of them are looking for opportunities to place their beats and the competition for beat makers is intense so I figured someone might be willing if they know for a fact the music will be produced etc.

The credit thing isn't a perk but there are instances where it's not given let alone promotion of the producer along with the track.

$50 for a beat isn't nothing but when you need custom beats for 5-10 records $50 a popturned into a nice chunk of change that from a label/artist prospective would be better used in the the promotion of the record or project itself.

So a flexible payment term obviously isn't going to be appealing nor fully solve the issue I'm trying to solve. So.....

Do you think a non-exclusive royalty agreement of 3% capped at 2k-3k would be a more realistic approach without an upfront.

Do you have any suggestions on the best way to approach this that would accomplish the goal is freeing up cash for promotion while being a good deal to the producer? Rather established or not?

capping the royalty seems a bit much too. keep in mind you're only sending out royalty checks (for cd sales) after you've recouped the money you've spent creating the cd/album/project. and then they would only get 3 percent of what one song would be worth

let's assume there are 10 tracks on an album you're selling for $10
each song is now valued at 1 dollar so 3 percent of that means for every album sold the producer is getting a royalty of 3 cents.
if you moved 1,000 copies of this album one producer who worked on 1 song on the album would be owed $30 bucks.
but if you paid them $50 as an upfront advance, you would deduct that from their royalty check. so you still wouldn't owe them any money.

another thing i didn't realize is that you need custom exclusive work. this makes it even worse.. because it wouldnt be tracks they've already created.. custom work should actually be even more expensive.

If $500 is too much to spend on production, it might be a better idea to sign a producer who is still new and is looking for a learning experience. labels do this all the time it's called "in house" production. in exchange for helping them promote their music they produce tracks for you, for no upfront advance but still the full royalty amount. you would get first pick of any tracks they create and if you have the avenues to get them paid work from other labels/artists then this works out great for both of you. now instead of finding random producers you cultivate your own sound using your own homegrown team and the producer has a way to brand themselves.

 

[icely2000]

capping the royalty seems a bit much too. keep in mind you're only sending out royalty checks (for cd sales) after you've recouped the money you've spent creating the cd/album/project. and then they would only get 3 percent of what one song would be worth

let's assume there are 10 tracks on an album you're selling for $10
each song is now valued at 1 dollar so 3 percent of that means for every album sold the producer is getting a royalty of 3 cents.
if you moved 1,000 copies of this album one producer who worked on 1 song on the album would be owed $30 bucks.
but if you paid them $50 as an upfront advance, you would deduct that from their royalty check. so you still wouldn't owe them any money.

another thing i didn't realize is that you need custom exclusive work. this makes it even worse.. because it wouldnt be tracks they've already created.. custom work should actually be even more expensive.

If $500 is too much to spend on production, it might be a better idea to sign a producer who is still new and is looking for a learning experience. labels do this all the time it's called "in house" production. in exchange for helping them promote their music they produce tracks for you, for no upfront advance but still the full royalty amount. you would get first pick of any tracks they create and if you have the avenues to get them paid work from other labels/artists then this works out great for both of you. now instead of finding random producers you cultivate your own sound using your own homegrown team and the producer has a way to brand themselves.

I agree that capping the royalty is a little harsh. I like seeing the $50 upfront as an advance of the royalty.

You know we wouldn't necessarily need a custom production as if we can be pitched certain beats based on a song that would definitely work.

In-house production is exactly what we need especially starting out, I've been preaching to my partner this but hes more on the I rather pay $50 for exclusive rights, but in house production is what we will benefit most from.

So what I will do, what will probably be more effective, is spend time on this forum reading and learning and when we need a beat for a record reach out for beats, offer an upfront and a royalty and build relationships that way with remote beatmakers that we can reach out to as needed.

 

[DjayCas]

I agree that capping the royalty is a little harsh. I like seeing the $50 upfront as an advance of the royalty.

You know we wouldn't necessarily need a custom production as if we can be pitched certain beats based on a song that would definitely work.

In-house production is exactly what we need especially starting out, I've been preaching to my partner this but hes more on the I rather pay $50 for exclusive rights, but in house production is what we will benefit most from.

So what I will do, what will probably be more effective, is spend time on this forum reading and learning and when we need a beat for a record reach out for beats, offer an upfront and a royalty and build relationships that way with remote beatmakers that we can reach out to as needed.

might be even easier to find beats from producers within the budget and write to those beats. this way you know what's being written is already perfect for the beat and vice versa.

 

[icely2000]

might be even easier to find beats from producers within the budget and write to those beats. this way you know what's being written is already perfect for the beat and vice versa.

That's another way but if you have a great record you don't wanna have to stifle that because of production but that's when you start the process of "Searching".

I really appreciate not fully dismissing me this was a very helpful and insightful discussion.

 

[OGBama]

Be sure to have some entertainment profession-only (no cats moonlighting as lawyers practicing law on the side of an unrelated profession) legal counsel and don't sign too many acts, it would be wise to focus solely on your partner's success. Consider if your label will be physical only, digital only or a mix of both.