To start off this web site and this page in particular, I want to focus on the issue of "On-Line Independent Labels." These are companies that will sign anybody and promise to distribute your record to stores as well as create links to other web sites and do your advertising. Acceptance is guaranteed, as they never reject anybody, so long as you pay the small up-front fees for bar codes and administration (usually not more than a total of $100)

At this time, there are only a few of these around, but because this is probably going to grow exponentially, I want to nip this scam in the bud. (If you are someone who has already signed a contract with one of these companies, and after reading this you want out, contact me via this web site.)

This "get signed for a $100 bucks" sounds like a dream for many artists who've already produced an album's worth of material and are tired of dealing with major label bullshit. These "on-line indies" as I call them, offer a turnkey record deal. No managers or lawyers to deal with, no obnoxious A&R comments like, "Well, I don't hear a single." Fuck them. You'll show 'em all, and put the damn record on the street and keep all the profits.

It's a nice dream and clearly these on-line indies attract excellent artists whose music is probably too niche (read: too original) for most major label marketing plans. But there is a real danger.

Buried within their seemingly benign contract is a nasty loophole that could tie you to these people forever. I cannot mention these few companies by name, for obvious reasons, but it doesn't matter because, it will not be hard to recognize these people by their contract. All these companies contain similar language in their agreement, as if the same sneaky lawyers were hired by each.

Below I will tear apart the contract that you will be asked to sign. If you recognize any of these clauses, contact your attorney and have him e-mail me, or e-mail me yourself. I'll send you a prepackaged "Consultation" that will list legal precedents and strategies, explaining what can be done. I charge a small fee for this. ($50.00) Don't hate me. I need to make money too. Think, instead, of the money I'm about to save you.

Okay, here's the deal:

Most of these contracts start off with a congenial intro that says something like, "You are entering a special place where dreams are fulfilled and hopes grow. In order for it to work we must have an agreement, so here it is!"

It will then con you into thinking that you are entering into a 1 year contract that will pay you 70% of any money earned from selling your recordings through them and that the licensing of your record to them is "non-exclusive." Which means that you can enter into the same agreement with anyone else.

It's phrased like this: "We agree to provide You throughout the Territory and during the Sales Period with listing of your Recordings in E-Stores during the Term."

Followed by this clause, "You grant to us throughout the Territory and during the Sales Period the rights to use your name(s), professional and/or group name(s), photographs and other images and likeness of You, biographical and/or other information concerning You regarding all of our business activities"

Sound good. 70%!!! The Major Labels didn't even offer you that much. (more like 12%) and it's only a year contract. How much harm can that be? If you hate them, it's over in a year. Right?

Wrong.

The key phrase lies in how this contract defines the "Sales Period," and the "Territory." At the bottom of the contract the following definitions can be found:

"'Territory" means the Universe."

"'Sales Period"means the time period beginning on the Signing Date and continuing in perpetuity for each of your Recordings in each country of the Territory."

For those new to this business, "perpetuity" is lawyer lingo, meaning, "forever."

So, an accurate translation of the opening paragraph would be this:

"You grant to us throughout the universe and till the end of time itself, the rights to use all your recordings, (even ones you didn't send to us) your name(s), professional and/or group name(s), photographs and other images and likeness of You, biographical and/or other information concerning You regarding all of our business activities."

Add to this is the fact that you have to supply them with the produced CD and press materials. Their investment is about $0.00 and they get to own you completely.

This deal is very new and so, although I haven't heard of anyone being forced to stay when they wanted out of this deal yet you don't have to be a Harvard Law grad to see how this could hurt you. These companies will continue to distribute thousands of artists, waiting for the day when one of them hits it big and gets an offer from a Major Label. You can rest assured that this on-line indie will then assert their rights under this contract. Even though they say that they are only licensing you "non-exclusively," they do this knowing that major label deals are always exclusive and will make you break your deal with this on-line indie before they allow you to sign with them.

Needless to say, the on-line indie will make this divorce painful.

Still think it's worth $100 bucks?

Moses Avalon

	Industry News Menu | Scam of the Month | November | December | January