Getting Outside Help in Distributing, " Shopping," Your Demo to Record Labels

"Shopping" a tape is when someone claiming to have industry contacts uses those connections to try and secure a recording contract for your band. The "shopper" can be a manager, attorney or anyone with an in-road to labels. Shopping is extremely speculative. If someone can get your demo a listen at a label, the chances are still slim that the label will offer a contract. Never pay someone up-front to shop your band's tape and be cautious if someone guarantees they can get your band a record contract. And as always, have the shopping agreement put in writing. Below are some important points to keep in mind for a shopping deal.

The term (length) of the agreement should never be more than one year. Nine months and twelve months are common. If a shopper cannot get results within one year, it is a waste of your time. If you can help it, have the agreement non-exclusive as opposed to exclusive. In a non-exclusive agreement, your band can still network and use it's own efforts to get the tape to a label. In an exclusive arrangement, the shopper has the sole right to shop your demo for the term of the contract. If an A&R person happens to see your band perform and you land a deal, the shopper may be entitled to compensation even though he/she had no idea the A&R person would be at your show. This can be avoided by inserting a clause that says the shopper is only entitled to compensation from a deal that resulted from direct solicitation by the shopper.

It is important that the shopper be required to send you monthly reports on his/her progress. The report should say which person at which label the shopper solicited. If your band is offered a deal, the monthly report will provide proof that it is a result of the shopper's efforts. The shopper's compensation can vary. The agreement can be structured so that the shopper receives a percentage of the advance money or from future royalties. I recently drafted one that gave the shopper two points from the artist's royalty rate. As a band, you want to keep this number low because it will be deducted from your royalties.

Above all, do some research on your potential shopper. What kind of success has he/she had in the past? Is it someone you can trust? What kind of access to labels do they have? Get these questions answered before you hand over your tape.

The information in this column is for general information purposes only. It is not intended to provide advice regarding a specific legal situation. Legal advice can only be provided after consultation with a specific attorney.