Music production houses have existed for a very long time and are still around to this very day.
A music production house is simply a music production company or record company who’s work is primarily to find artists and producers with whom they can work with to release and distribute music and share earnings.
Usually artists are sought out and put under what is called a record label
contract in which they receive the terms and conditions of working with the label.
Upon signing, the artist usually receives an advance to help them pay for things like living expenses, music videos, accommodation etc.
Inner workings of Music Production houses
A music production company will have a variety of artists and producers on its roster that all work together to keep everything in house,
which essentially means dealing with the entire music production process
using only people that are signed to the label.
This may include sound engineers, mastering engineers, digital creators etc. The business model here is simply to have full control of the creation process.
But, it should be stated that a music production company can always
outsource talent and work with it on a contractual basis,
this can help facilitate the overall production process.
Deal Structure
Record deals are simply recording contracts that are legally binding between the artist and the music production company.
Under these sorts of deals the record label pays for expenses incurred in the creation of the music,
technically the record labels gives the artist a sort of loan of which the artist pays back through the sale and distribution of their music.
This is worked into the Royalty split sheets,
which is essentially the split of the revenue of sales and distribution of the music between the artist and the record label.
Licensing deals
Legally, as the composer, you have the licensing rights, therefore every time your song is played publicly either physically or digitally ,you’re owed a royalty.
The label collects on your behalf.
Distribution deals
Music production companies will also have distribution with a distributor.
The distributor is responsible for the distribution of the product with its resources which it then recoups from record sales.
A percentage of the record sales is agreed upon by the music production company and distributor.
A&R’s
Music production companies will also have A&Rs that work to connect artists with other creators that they can work with.
The A&R is then the facilitator or the intermediary between artists and other creators.
In the hiphop scene, most independent record producers get to connect with artists through A&Rs that they have relationships with.
These middlemen help set up deals and opportunities for outside creators to work with a music production house.
Marketing
Music production houses have effective marketing and promotion plans that they use to put their products on the radar of the consumers.
The marketing and promotion package forms part of the contract that the company and its signees have.
Which gives the signees a great advantage because they don’t have to spend a single dime on marketing,
the record label uses its money to finance these marketing campaigns which it later recoups through royalties.
Business side of things
The music production house takes care of all the technical aspects of the business side of things for the artists.
It collects royalties and distributes them, negotiates on behalf of the artists for endorsement deals, tracks all expenses and revenue.
These administrative procedures that form part of the agreement between the company and creators allow creators to focus solely on creating content while the label handles everything else.
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