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Contracts and royalties are where a lot of people get stuck—and for good reason. Record labels have a long history of bad deals, broken trust, and artists getting the short end of the stick. In Episode 7 of How to Start a Record Label This Year, Scott tackles this head-on and explains how modern independent labels can do things differently.

This episode walks through the fundamentals of contracts and royalties from a practical, empathetic perspective—without legal jargon and without pretending there’s a one-size-fits-all solution.

In this episode, you’ll learn:

Why you do need contracts—and why they protect artists as much as labels

When to involve a music attorney (and why templates and AI contracts fall short)

Common contract terms artists actually care about (term length, exclusivity, territory)

How licensing master recordings works for indie labels

Why 50/50 profit sharing has become a modern standard

How to structure fair splits while keeping the label sustainable

The importance of having these conversations before any music is released

Scott emphasizes that the most important part of any contract isn’t the paperwork—it’s the conversation. Clear expectations, honest communication, and transparency from day one are what turn contracts from something scary into something empowering.