Navigating the Minefield: The Worst Terms in Music Distributor Contracts ⚖

Choosing the right (or wrong) music distributor can certainly impact your career. But what if the contract you are signing is secretly costing you money? As a music attorney and musician, I have seen firsthand how unfavorable terms in distributor agreements can leave artists struggling, even when their music is successful. This blog post highlights some of the most egregious clauses I have encountered--enough to make you think twice before hitting "accept." For a complete breakdown of specific distributor terms, check out the YouTube video above!

1. The Hidden Costs of Convenience

We all want to focus on creating music, not wading through legal jargon. However, those seemingly minor details in your distributor's terms of service can have a massive impact on your bottom line. Distributors ultimately control your royalties, and many contracts contain clauses that allow them to withhold payments for reasons that are vague, unfair, or downright exploitative. We are talking about situations where your hard-earned money disappears, not because of legitimate issues, but because of loopholes cleverly hidden in the contract.

2. Three Major Red Flags to Watch Out For

Before you sign anything, be on the lookout for these three common problems:

• First, many distributors have clauses allowing them to withhold royalties for alleged copyright infringement or stream manipulation. The problem? The definitions are often so broad and vague that they can be applied arbitrarily.

  
  

• Second, many contracts explicitly deny you the right to audit their books. This means you cannot verify if the royalty statements you receive are accurate. Imagine discovering discrepancies, but having no legal recourse to investigate!

  
  

• Finally, be wary of AI opt-in programs. While they might sound appealing, the fine print often gives the distributor broad rights to use your music for AI training with minimal compensation for you.

3. What to Look For in Popular Distributor Contracts

I have analyzed the terms of service from several major distributors, and the results are alarming. In my YouTube videos, I delve deep into the specifics of each contract, but here are a few examples of the kinds of clauses you should be wary of: unclear definitions of "net income," inactivity fees, the ability of the distributor to authorize remixes without your permission, and clauses that allow them to keep your royalties even after you terminate the contract.

Some distributors even profit from the interest earned on your unpaid royalties!

4. Take Control of Your Music Career!

The music industry is already challenging enough. Do not let unfair contracts add to your struggles. By understanding the potential pitfalls hidden in distributor agreements, you can protect your rights and ensure you receive the compensation you deserve.

At Delgado Entertainment Law, we offer free case evaluations to help businesses like yours stay protected. Contact us today to discuss how we can help secure your business’s future!

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Krystle Delgado, Esq.

CEO/Founder