Lets be realistic, labels expect to make a profit and their profits result from the terms of music contracts or recording contracts. That is why it is crucial that you are savvy in the world of music business contracts. Over the next few minutes, I am going to breakdown the major parts of recording contracts so you have a greater idea of what is contained within them.

1. First, you need to know your basic definitions that music contracts contain. These are simple for the most part but a little research and review on your part wouldnt hurt a bit.

2. Ok, initially you have your term, which is the length and something called your minimum commitments. Minimum commitments obviously detail how long you are expected to stay with the label. Will it be one, two, four or eight albums? Be careful here, you dont want to stick around for too long or not long enough. Some labels want a promise of one album with the option of you recording more if your first album is successful.

3. Next you have your exclusivity, copyright terms and grant of rights. In music contracts, exclusivity refers to you, the artist, being restricted to making albums, videos and merchandise solely for them. Some of the time you may be permitted to perform with other acts but only as a guest and only with recognition of your label. Be aware that this label may own your every move including tv, radio or any other commercial type appearance.

The most general cases for copyrights include the artist granting the rights to the company. This allows the company to use the artists name, image, manufacture records, distribute these and the right to license other companies to do so as well.

4. Recording costs, royalties and recording costs are another section in music business contracts. Finances in music contracts can get tricky. Advances are typical but are recoupable which means you will have to pay them back with your proceeds or royalties. But remember, your royalties will also be used to pay publishers, managers, distributors, producers etc...

5. Creative control is a section that most artists despise. Most musicians have their own style, their own way of writing songs, dressing, acting etc... The majority of major labels do not give the artist complete creative control in their music business contracts. This is just the way it is with music contracts in the industry. Just a note, make sure your contract includes some sort of clause that allows you to negotiate with the things you dont agree with.

6. And lastly, you have the signature. Before you sign, keep in mind that these are legally binding music business contracts. They cannot be reversed just because you didnt understand or you were confused. Make sure your music contracts are to your specifications even if you have to negotiate them tooth and nail!