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Saturday, October 22, 2011

Upstream Deals-Learning Guitar

Upstream Deals

Here is a new topic in the industry when making your own music. It has been around for the last few years now. It is called an upstream deal. This is a cross between an independent distribution deal and a production deal. This is how it works:

An indie label goes to a indie distributor that's owned by a major label. It makes a standard distribution deal, but also gives the major label a right to upstream the artist, meaning the deal transforms from a distribution deal with the indie distributor into a production deal with the major label. The upstream deal is made with the major label who supplies the distribution. In other words, the pure distribution part of the deal is in a contract with the major label, not a separate contract with the distributor.

When an artist is upstreamed, the distribution label moves the records from one distributor to its major distributor. It stops paying over the gross sales monies less a distribution fee, and instead pays the indie a royalty. or if the indie has clout a percentage of profits.Whether it's a royalty or profit share. the indie gets less money than it would under a distribution fee. That's because the distributing label is taken a big risk. As part of the upstream, it takes over the costs of marketing, promotion, videos, etc. The distributor also takes a risk on record units being returned. The idea behind the upstream deal is that when an artist's sales gets to a certain point, it takes the clout and money of a major to move those sales to the mega level.

Learning Guitar
Learning Guitar

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