What is an Artist Development Deal, and Should You Sign One?

Artist Development Deal

In the “glory days” of the recording industry (i.e. after Elvis, before the Internet), there was a very common type of deal offered by record labels called the Artist Development Deal, sometimes known as a “Demo Deal”. The idea was fairly simple: if a label liked you but didn’t want to commit fully with a record deal, they’d offer you an Artist Development Deal. I like to think of them as the ‘promise ring’ of the music industry: a commitment, but not taken seriously by anyone outside of the relationship.

What is an Artist Development Deal?

In theory, the Artist Development Deal was the best of both worlds for the artist: the commitment of funds and development from the label, without signing away your soul. However, there was often more to these deals than meets the eye. The deals often gave a significant cut to the label on live and publishing revenues, often involved horrible royalty payouts, and many times included a right of first refusal clause that made the commitment as significant as a full recording deal, without all the perks. Kind of like a promise ring with the consequences of an engagement ring.

These deals still exist, but the entire artist development infrastructure has changed. Long story short: the major labels are no longer paying for artist development. But who is? For the most part, artist development has fallen on artists, and record labels only become interested when an artist has built up a major following both on and offline. But there is a whole new industry emerging in the area of artist development, led by young entrepreneurs, small businesses, and music fans, as opposed to multinational corporations. In other words, the “new” Artist Development Deals are coming from startups trying to build a legacy, rather than protect one.

What does an Artist Development Deal look like in 2017?

The new Artist Development Deals range from mutually beneficial and artist-friendly to downright exploitive. What they have in common is the investment of time and resources by the ‘developer’ in the short term, in exchange for a piece of the artist’s revenue streams in the long term.

Here’s an example: in exchange for “developing” the artist for the next 3 years, the developer will be entitled to 15% of all revenues generated during the term, and 10% of all Sunset Revenues earned over the 10 years following the term (known as the “sunset period”). Sunset Revenues are defined as gross revenues earned during the sunset period from all master recordings and compositions recorded/released during the term, as well as revenue earned from all deals negotiated during the term but received in the sunset period (including sponsorship and endorsement deals).

What are the Pros and Cons of an Artist Development Deal?

One of the advantages of signing an Artist Development Deal is obvious: the developer should open up doors that otherwise would be closed, such as providing industry contacts, booking shows, helping develop your live show, song writing, image, and brand generally.

A clear disadvantage of the Artist Development Deal is that the revenue pie gets split further, so each band member earns less. If you sign with a manager or record label or publisher, the pie gets divided further. Now, you need all of these additional parties at some point in your career, so it’s a question of ‘when’ rather than ‘if’, whereas not every artist needs the help of an artist development team.

So that is the real question you need to ask yourself: to what extent can the developer truly “develop” your career? What are they offering that you cannot already do yourself? If self-managing isn’t something at which you and your band mates excel, you will benefit more from an artist developer, and sooner rather than later.

As always, email me with questions and comments.

Artist Development Deal

37 thoughts on “What is an Artist Development Deal, and Should You Sign One?

    • Thanks Gerry. I haven’t read that book but have been meaning to. And you make a great point: so many legends could have done so much more with proper help from the outset. Thankfully, Fogerty made it through the tough times to come out on top.

      Kurt Dahl
      Entertainment Lawyer

      • Can a rwcord company legally sign an artist to a recording/managment contract or is that a confkuct of interest?

        • It can happen and does happen often. But you want to minimize the conflict by having checks and balances in place. A good lawyer can help ensure that this is the case.

          Kurt Dahl
          Entertainment Lawyer

  1. Hallo my name is Kevin I live in Belgium. I was offered an development deal and in the deal they told me I have to pay if I signe the deal. My Question is do u really have to pay for development deal ?

    • Hi Kevin,

      I’m always leery of development deals where you have to pay a sum, of any kind. They should be similar to a management deal, where they only earn if you earn, i.e. a percentage of revenue generated.

      I hope this helps.

      Kurt Dahl
      Entertainment Lawyer

      • My son’s band was recently contacted by someone in LA who is interested in managing them along with A&R. We were excited, especially when we found out he’s worked with some known bands and industry people. After asking several times, he finally told my son it would cost them $300.00 per month. That didn’t sound right to me. Thanks for your comment on this thread.

        • Hi Susan,

          I’m always suspect of monthly fee arrangements, but at least the amount in question is low. I highly recommend that something be put in writing, or if they’ve sent you a contract, that you have it reviewed. Email me at kdahl@murphyandcompany.com and we can discuss further. Happy to help, and I work with deals like this all the time!

          Kurt Dahl
          Entertainment Lawyer

        • $300 is cheap. What happens is that your son and his band could end up paying out more on the back end if services are not paid for upfront. Remember that an Artist Development Deal can be negotiated from month to month or short term. No one forces you to stay in Artist Development. Also what a lot of people need to consider as well as respect is that Artist Development costs. Why should it be the full financial burden of the developer to help you achieve your dreams. Your dream, their efforts and most times their money as well. It doesn’t balance out well for the developer if you decide you don’t want to do this anymore (entertain). It doesn’t balance for the developer if you don’t put into practice what you’re being taught, that effects their rep. It doesn’t balance for the developer if you get signed and pretend that you don’t remember the services rendered to you all of a sudden. For you to assume that you shouldn’t pay a service fee is disrespectful to those who are flawless developers and churn out some of the best talent you’ve seen thus far.

  2. I am a man with very good original material. I am also an attorney, though I am clueless as to what I should do to further my music career. I want to proceed to at least a demo, but I am unable to self fund. I live near Nashville, and I play out as often as possible. I have great musicians willing to work with me based on my facebook videos. I have a showcase (covers) as well as many of my own songs. I know that music is my future. I just do not know where to begin. Any advice? My email address links to my fb profile if you care to check my material. Thanks

    • Thanks for your comment Michael. Please feel free to email me some originals to check out. Living near Nashville surely helps, as so much exciting stuff is happening there at the moment. I know some good people there, lawyers and otherwise, who might be worth connecting with. Email me for starters.

      Thanks

      Kurt Dahl
      Entertainment Lawyer

  3. Is it common for a major label to offer a 360 deal with a big signing bonus but charge an amount for artist development that has to be paid before you sign the contract ? (Virgin records)

    • Hi Rob,

      I’m always suspect about Artist Development Deals that require a fee to be paid by the Artist. If you’re not making money, neither should they.

      Email me to chat further.

      Thanks

      Kurt Dahl
      Entertainment Lawyer

      • I would suggest you get legal advice on the deal no matter what Sheila. From an entertainment lawyer. Please email me if you’d like me to help.

        Thanks

        Kurt Dahl
        Entertainment Lawyer

  4. I have been looking into artist development deals and found a few in my area that I’m interested in. However, the one that I am leaning towards requires $25.00 for the initial consultation. I don’t mind paying if it is a legit company but I was curious if this was standard? The company has a good overall rating on various sites but I’m still anxious about giving them any money. Does this sound like a scam?

  5. Hi. Within the next year I was wanting to open an artist development company, but the way you have it described here makes me second guess my plans. I think maybe my vision of what I want isn’t tangible after reading this article. I am only in the beginning stages of this, but am wondering if you could answer a couple of questions, via email, in your spare time.

    • Definitely Paige! There are many successful and cutting edge artist development companies out there, many are my clients. So it’s definitely doable. Email me to chat further.

      Thanks

      Kurt Dahl
      Entertainment Lawyer

  6. Hi guys i am professional singer/songwriter with as very good relationship with the BBC and having done all this on my own so i know where my path lies. However, after good success on the radio i have two managers, one of whom i know really well through childhood and the bother who knows a thing or two about the music industry having worked there before, they approached me and i’m in a deal paying a lump sum a month for their services to develop my career and manage however i feel after paying over a grand already that they actually aren’t doing anything i could have done myself and are just using money to set up their own business and benefit themselves as i seem to be out of pocket all the time with no resources to expand my music catalogue, photoshoots, promotional material as i have given money to them and i fear i have made a mistake because they saw success and jumped at it. i also have had no shows for nearly a year and have a big show next month which will definitely open doors but again i feeel its me who has paid for thew budgeting of the show as i have received nothing as of yet from my investment

    • Sounds like you need to have a serious conversation with these managers, and perhaps stop paying the monthly fee until they can provide certain deliverables.

      Thanks,

      Kurt Dahl
      Entertainment Lawyer

  7. I have a couple of artists who I believe have the talent to “make it”. I am willing to commit my time and money to make this happen. However, I need to make sure that I will get paid for my services.
    What type of deal should I get them to sign?

    • Hi Darrell,

      Either a management deal or an artist development deal. But the “fairness” of both really depends on what’s included in the agreements. If you’re in Canada or the US, I can help. Email me for more.

      Thanks,

      Kurt Dahl
      Entertainment Lawyer

  8. Hi, Should I pay the $2,900.00 fee for 4 to 5 months of artist development with Capitol Records? They want me to send the money before. They fly me out to Los Angeles to meet with them. Does this sound right?? Thank you in advance for any advice offered.

  9. Hey! I’ve gotten an artist development deal from Virgin Records here in Los Angeles, but I am very weary as I need to pay $3900 initially for a 5 month contract, and they want me to sign the contract before I meet with them/fly me out to New York to execute the deal. I’ve seen some similar stories in this comment section, so I’m just curious if this is a legit deal or something I shouldn’t move forward with?

    • Hi Taylor,

      I would have to see the full agreement, but it definitely raises some red flags. Firstly, make sure it’s actually Virgin and not an imposter.

      Thanks

      Kurt Dahl
      Entertainment Lawyer

  10. Good afternoon my son was approached with the same type deal from supposedly someone from Capitol also I don’t have a good feeling what’s your thoughts???

  11. Hello Kurt,
    I wanted to ask you where I can get contracts for Artist Development deals for someone like me who is starting out?

    • Hi Christopher,

      You would have to contact a trusted entertainment lawyer in your area. I wouldn’t trust generic agreements that are pieced together on the Internet. You get what you pay for with these sorts of things.

      Thanks

      Kurt Dahl
      Entertainment Lawyer

  12. Hello Kurt
    My son is doing his first showcase on Saturday April 21st and the production company really like his music and reach out to him to get on the ticket. They say this could lead to a deal. He writes all of his lyrics and this could lead to a deal. I don’t want him to sign anything with out have the contract looked at by someone with the legal ability to explain everything. Is there anything he should look for or questions he should ask. I do see that you are very cautious about the artist paying the fees.

    • Hi Kim

      I would send the agreement to a trusted entertainment lawyer, as there are dozens of factors to consider and weigh against each other before making a decision.

      If you’re in Canada or parts of the US, I’m happy to help.

      Thanks,

      Kurt Dahl
      Entertainment Lawyer

  13. I’ve had an underground rap label coming out of new York called 6017 productions offer me an artist development deal and live performance!! Is this normal? Should I take it??

  14. Hi, I recently was sent an Artist development contract from Captiol Records . I’m seeing obviously there’s a scam going on but the email checks out . I’ve been in contact with who I believe to be David Wolter but never saw his face. Now I’m wondering should I even sign this contract . They also was asking for a fee which is understandable. I just need to know if this is real .

    • I’ve seen a lot of scam Capitol Records deals in the last year. Be careful on this one and don’t sign anything until you meet someone in person and have obtained sound legal advice. Best of luck

      Kurt Dahl
      Entertainment Lawyer

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