Record Deals, Quality Controls and Non-Competes: What We Can Learn from Frank Ocean

 

29 August 2016
Posted by Matt Hughes (Studio Legal intern) and Suzy Wood

Record Deals, Quality Controls and Non-Competes: What We Can Learn from Frank Ocean

This month, Frank Ocean released two new albums in one week after a four-year hiatus.

The first, a visual/film album titled Endless, was released through Def Jam Recordings (owned by Universal). The second, Blond(e), was released the very next day on Ocean’s own independent label, Boys Don’t Cry.

According to media sources, Ocean was under an obligation to deliver three albums, which Endless technically fulfilled. But the major label is reportedly up in arms at the fact that this release has been overshadowed by Blond(e) – which is already topping the charts in the US, UK & Australia.

From a commercial standpoint, Universal were expecting an album with a similar vibe to his previous smash hit, Channel Orange. Instead, they got Endless, an experimental album which has not experienced nearly the same amount of commercial success. Meanwhile, by releasing on Boys Don’t Cry, Ocean has dramatically increased his profit share from Blond(e). According to Triple J news, under the Def Jam/Universal agreement his profit would have been 14%, but by releasing the album independently on his own label, Ocean is set to take around 70% of the profits.

Whether Ocean finds himself in a legal tug-of-war over the profits from Blond(e) depends on what was agreed to with Universal. Major recording contracts usually have non-compete release clauses, which restrict artists from releasing any other music of theirs on a competing label within a certain period of time.

Other contracts might give the label an “option” over your next album-length work. An option is an irrevocable offer to the label to exercise all its rights under the agreement for your new work. If the label turns your offer down and the new album subsequently does get picked up, some contracts go further still and require you to go back to your original label to give them an opportunity to better the offer.

Some contracts also try to build in a right of approval to allow the label to refuse to release an album if the tracks aren’t to the label’s taste. These restraints are often buried in the “delivery commitment” or “minimum commitment” clauses, or in the definition of “album”.

It seems no legal action will be taken against Ocean in this instance, but before you follow his footsteps, it’s important to tread carefully and check your contract.

 

Can you pull a Frank Ocean? Our top tips

1. Always check your contract to see whether you are required to deliver music of a particular genre or style.

2. To keep your artistic freedom intact, watch out for clauses that give the label the ability to refuse to release an album that the label simply doesn’t like. This can be expressed as requiring the label to “approve” an album or deem it “suitable”. It is much better to simply have the restriction being “technically suitable for commercial release” (that is, of good production quality).

3. Check how long your contract lasts for and when you are ‘exclusively’ signed to a label. Your label might have commercially released your last album but you may not be allowed to release any further recordings on another label for quite some time (often 9-12 months after the commercial release of the last album).  If you sign a deal when you are exclusively signed to your old label, there will be all sorts of trouble!

4. Understand whether the label has the right to any renewals, options and/or extensions under your contract. Can the label extend the term of the contract if your expense account is unrecouped (and prevent you from signing elsewhere)? Is there an option granted to your label to release your next set of recordings? Does your contract automatically extend if your label signs a longer overseas deal?  It is crucial to understand the fine print before pulling a ‘Frank Ocean’.

5. Try and carve out rights to be involved in ‘side projects’. ‘Side Projects’ could mean recording and releasing within a completely different genre of music which will not conflict with your existing label.  This will give you the freedom to keep expressing yourself whilst signed to multiple record labels.

6. Are you the label? Speak to us about making sure your artists are suitably ‘locked’ in to their label deals to prevent getting duped.

7. Get legal advice from an expert in dealing with music contracts before signing any record label deal. It is a specialised area! At Studio Legal, we specialise in legal protection for the creative industries. We can help you prepare or look over your music contracts and undertake all necessary due diligence. You can contact us on 03 9521 2128 or email hello@studiolegal.com.au.

 

DISCLAIMER

The information in this article is of a general nature. It does not constitute formal legal advice, and should not be relied on as such. Please see the full disclaimer in our website terms. Please contact Studio Legal if you are seeking advice about a specific legal matter