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Contract with artist (1)
Contract with record label (4)
Management rights (2)
Recording contract (3)
(1) 19E has choice whether to sign any Top 24 contestant (Contestant no choice). Terms sooper-sekrit, but generally conceded to be very onerous, If artist is signed, 19 E gets exclusive managements and recording rights (2) 19E gets exclusive rights to manage artist (deciding where and when he appears, negotiate fees etc). Typically managers get cut of income. (3) 19E gets exclusive recording contract with artist. Typically artist is bound for initial period, then 19E has option to renew if they want for unknown number of albums. Artist has no choice whether renewed or not. (4) 19E then enters into contract with record label (eg Sony/RCA) in terms of which 19E ‘licences’ recording rights to label (effectively rents out artist to label). Record label markets, manufactures and distributes records. Record label has to pay advance to 19E. 19E pays this over to artist. This advance is recoupable, i.e. it
gets subtracted from recording profits before artist gets anything. (However if profits less than advance, record label carries the loss).