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Who Pays for the Recording Costs?

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Question: Who Pays for the Recording Costs?

Note: This advice is meant to be a general guide and does not apply to every situation. The deal you have with your record label may specify something different than what is stated here.

Answer:

There are no real rules about who should pay for recording costs. If you’re an unsigned band who goes into the studio to record an album with your own money and you get signed to a record label who releases that album, then those costs stay with the band. The label does not have to pay you back the money you spent on recording the album, although that expense you have taken on can be considered when you’re negotiating an advance with the record label. If you get signed to a label on the strength of demo and the label wants you to record an album for them to release, often the label will pay for at least a portion of this recording. However, a smaller indie label that simply doesn’t have money to spend on recording costs might say, “well, you record an album, and we’ll release it,” leaving those costs up to the band.

If the label pays for the recording of an album, they have a right to withhold earnings from the band until they recoup all of the costs they have put into the album. Also, if the label pays for the recording, they generally have more of a say in how the album sounds. The extent to which the label exercises this right varies from label to label.

If you sign a multi album deal with a record label, make sure the contract clearly states who is responsible for the recording cost of each album (and if you sign a multi album deal, ideally the label will take on the bulk of the recording costs).

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