How to sign yourself to your own record label | Sign yourself to Yourself

Summary

In this video, Casey Graham explains the concept of 'signing yourself to yourself' in the music industry, a strategy designed to give artists more control over their careers and protect their intellectual property. By forming an LLC and using loan-out deals, artists can maintain ownership of their services and masters while negotiating favorable terms with record labels. The approach ensures financial independence, safeguards against exploitation, and offers more autonomy in the music business. Graham emphasizes the importance of using this system when working with large sums of money and labels, encouraging musicians to take charge of their future.

Takeaways

• 😀 Your services as an artist should be protected by an LLC to maintain control and autonomy over your work.
• 😀 'Signing yourself to yourself' means keeping ownership of your intellectual property (like your music) through your LLC.
• 😀 A loan-out deal allows you to remain independent while providing services to companies like record labels.
• 😀 An inducement letter is a safety net that guarantees the company will fulfill their financial commitments to you.
• 😀 Intellectual property (like your master recordings) should be owned by your LLC, and licensed to labels for specific use with a return of rights after a set period.
• 😀 Negotiating advance payments and royalties is key to ensuring you maintain control over your income and intellectual property.
• 😀 Once your earnings exceed $100,000, it’s essential to set up an LLC and implement loan-out deals for tax and financial protection.
• 😀 An LLC provides a buffer between you (the artist) and the company, ensuring that they can only access your work under agreed terms.
• 😀 Negotiating repayment terms for advances directly (rather than through royalties) can give you quicker financial autonomy and independence.
• 😀 If you're an artist thinking about working with a label, setting up an LLC and signing yourself to yourself is essential to protect your career and assets.

Q & A

What does the phrase 'sign yourself to yourself' mean in the music industry?

The phrase 'sign yourself to yourself' refers to an artist setting up an LLC (Limited Liability Company) to protect their services and intellectual property. Instead of signing exclusively to a record label, the artist loans out their services through their LLC, maintaining ownership and control.

Why is it important for an artist to set up an LLC when loaning out their services?

Setting up an LLC allows the artist to protect their services by creating a legal entity that holds ownership of their work. This acts as a buffer between the artist and the purchasing company, such as a record label, preventing the company from having direct entitlement to the artist's labor.

What is an inducement letter, and why might a record label require one?

An inducement letter is a document that ensures the artist will fulfill their contractual obligations. It acts as financial protection for the record label in case the artist fails to deliver the agreed services, such as providing a master recording.

How should intellectual property (IP) be handled in this system?

Intellectual property, such as master recordings, should be owned by the artist’s LLC. The LLC licenses the IP to the record label for use, but the ownership remains with the LLC. After the license term ends, the IP should revert back to the artist.

What is the advantage of licensing music instead of selling it outright?

Licensing music allows the artist to retain ownership while still enabling the record label to monetize the work. This structure provides the artist with more control over their intellectual property and the ability to reclaim it after a set period.

How does the loan-out system benefit an artist financially?

The loan-out system helps artists protect their earnings by structuring payment terms that are not solely dependent on royalties. This gives the artist more autonomy in negotiating direct repayments, ensuring they can recoup their investment faster and maintain more financial independence.

When should an artist consider using the loan-out system?

An artist should consider using the loan-out system when their labor contracts exceed $110,000, as this will help protect them from tax liabilities and establish a corporate veil between them and the purchasing company.

What does 'ownership of masters under license' mean?

Ownership of masters under license means that the artist’s LLC retains the rights to the master recordings, while the record label is given temporary rights to use and monetize those recordings for a specified period. After this period, ownership reverts back to the artist’s LLC.

How does the loan-out system increase an artist’s autonomy in the industry?

By using a loan-out system, an artist can protect their services and intellectual property, negotiate better financial terms, and have more control over their career. It helps the artist avoid being exploited and creates a legal framework to protect their interests.

Is it necessary for an artist to use the loan-out system if they are independent?

For most independent artists, using the loan-out system is not necessary unless they are involved in high-paying labor contracts. However, for artists with significant earnings (over $110,000), this system provides essential protection from tax liabilities and legal risks.