The high-dollar advance is a highly sought-after and much-discussed phenomenon in the music industry. Many musicians and songwriters hope to get signed by a major label or big-time publisher and get that big advance when they sign a contract. Although an advance offer can be an exciting prospect, and can be flattering to receive, there can be downsides to taking a big initial payment, and for some artists, keeping more independence can be wiser in the long term. It’s important to consider all your options when it comes to your rights, and it’s vital to be aware of what an advance and agreement with a publisher or record label entail.
An advance is a lump sum of money that is paid out to an artist when they sign a contract with a record label, music publisher, or, less often, with an event promoter or merchandising company. It’s usually meant to support the artist to give them more time to write new songs, or with a recording artist, to pay for them to record new material. It’s important to remember that any money you are advanced will need to be recouped (i.e. paid back to) by the label or publisher before you receive any royalties. In short: an advance is a type of loan, that you pay back to the label or publisher with the royalties generated by the recordings or songs controlled by a specific agreement. Generally, you are not required to pay back a label or publisher if your artistic output under a contract does not recoup the full advance by the time the agreement ends, but you will not receive any additional payouts from your label or publisher if you do not recoup.
In fact, you should be extremely wary of signing any type of deal that asks for you to pay back any advances or expenses. A high-dollar advance can also make you less likely to scrutinize an agreement that is otherwise not advantageous to you as a recording artist or songwriter - before signing any deal, be sure to read over everything with a lawyer before you sign it.
When choosing a traditional publishing deal, you will (in most cases) sign away a percentage of the royalties your song earns during the contract’s term to the publisher. Keep in mind though, your publisher will usually retain 100% of the royalties received until you have recouped your initial advance.
What does a traditional publisher do in exchange for a percentage of your royalties, beyond the upfront advance? Your publisher will generally act as your administrator, in addition to having a creative team who will be pitching your work for sync placements (in TV, film, and advertising), as well as pitching your songs to stars who may want to record them. The income generated from any of these placements, as well as your performance and mechanical royalties, will be subject to advance recoupment before you receive additional royalties.
If you have the opportunity to sign a recording or publishing deal, it’s definitely worth considering whether it’s the right decision for you depending on the stage of your music career and what you’re looking for out of the partnership. You should always work with a lawyer before signing any contract, and ensure this partner is someone you are comfortable working with within the long term, as these agreements often require five- or more- year commitments.
If you haven’t been offered a traditional publishing deal or aren’t interested in that type of relationship, you can work with a publishing administrator, like Songtrust, to ensure you’re registered and collecting your publishing royalties around the world. You’ll also retain the full creative rights to your catalog, so you can pitch and manage your songs however you prefer - while keeping all of the royalties earned from sync licenses. With Songtrust, you’re able to enter and manage your catalog directly from our dashboard, and we offer flexible and artist-friendly terms, to ensure that our clients can make whatever decisions they want for their catalog down the line, while collecting all their royalties in the meantime.
If you have questions about music publishing, royalties, or Songtrust, check out our help center, sign up for one of our Music Publishing 101 workshops, or reach out to our team.