Let’s face it. The music industry is crawling with bullshit and when you are just beginning your career it can be a full-time job just trying to sort out what is real and what is fake. I have been working in the music industry for about 15 years and have signed numerous contracts and agreements for varying reasons, circumstances, and types of projects. I am going to help you avoid some of the mistakes I made be explaining to you how you can spot a bullshit deal quickly. So before I go any further here is my disclaimer:
I am not a lawyer and this is not legal advice. I take no responsibility for the choices you make in your career. When in doubt consult an entertainment lawyer.
First to clarify there is a difference between a bad deal or contract, and a “bullshit” one. And this is a very important distinction to make from the get-go.
A “bad” deal can be legit, valid, and completely legal. It just might not be in your favor. A good example of this is a 360 deal. If hypothetically Sony Records offered you what is known as a 360 Deal, well… it is a real tangible circumstance for you to be involved with, the terms just might not be in your favor.
A “Bullshit” deal is what I call, a person or business that has no idea what they are doing, and is a complete waste of your time, because they do not have true experience in the business, and 99% of the time are not earning money from their music business. These are toxic to your career and most be avoided at all costs. Your two most important assets are your time and your intellectual property (the music your write, record, or produce). “Bullshit” deals and business people are also a fast track to discouragement and frustration with your musical career goals.
Your SS# or Companies EIN# – most all contracts will ask for your contact information and Social Security Number or companies Employee Identification Number. In addition to this, they will ask for your current mailing address and may request in some cases a photocopy of your ID, typically a Driver License.
A TAX Form. Most all companies will request you to fill out a TAX form of some type. This is evolving a bit. And I have seen instances with publishers where they may not require a tax form because you are being paid out in royalties from your performing rights organization. (ASCAP, BMI, SESAC, disclaimer I am a member of ASCAP both as a writer and publisher) but in a general situation if an individual or business is paying you more than $600 in a year. Tax forms need to be filed. Again I am not a TAX professional. This is something you need to and should without a doubt discuss with your accountant. The TAX form is also a good way to see what the companies intentions are. If there is money to be paid, then there is money to be taxed. A lack of clarification and concern about taxes shows that the people or company you are dealing with either has no knowledge of any of this which should be a huge “Red Flag” or that they have no realistic plan of making any money with you. Unfortunately, this is more common than you would expect. There are many “wannabes” in the music industry that just want to act like they are in the business as part of some fantasy or take advantage of musicians just starting out. Sad but true.
The legal length that the company will go to, to protect itself. The number one thing music publishers, record companies, film production companies, television production companies, ad agencies, music supervisors, and just about everyone in the entertainment business WANTS TO AVOID is Getting sued. This is also the driving reason behind why these companies shy away from working with many indie artists. They just don’t want to risk legal problems down the road.
Research. Do a bit of homework. Before you sign anything lookup the company. If they are a member of a PRO like ASCAP, BMI or SESAC research them. If they are a music publishing company in business for 10 years and only have 5 registered works, well…, unless 1 of them has been a billboard hit, I’d be concerned. If they are a record company, how many streaming plays do their artists have? Getting the idea yet?
The company will ask for an invoice. This varies from situation to situation but is very common. If you want to get paid by a company for your work you will often be asked to submit an invoice requesting that payment.
Your CAE or IPI#. When you do work with anything involving publishing and writers royalties you will be asked for you CAE/IPI number. This number is assigned to you by your PRO and is your musical social security number. It helps makes sure that the names of your songs get attached to your name, and more importantly helps you get paid for their usages. Contact PRO for more information about this.
Lastly. If you are really feeling funky about doing a deal, do a background search. * If you feel the need to do this I would tear up the paperwork and walk away. You personal intuition will tell you all you need to know. Trust it.
If you keep these things in mind when you’re looking at your agreements and contracts you will immediately be able to spot things that just don’t make sense. There is also nothing wrong with entering into agreements with new businesses and or other individuals, just make sure things are clearly defined, and how each person in the agreement in going to benefit financially. I have entered into agreements with small companies that have been greatly beneficial to me. With any situation, you must weigh your risks with the benefits you can possibly reap. And jump.
If you have questions or want to add your own experiences in the comments I would love to hear from them. The more people discuss these issues the fewer people will get scammed.