Before you even decide on what type of advance you ideally want (if you have that option), you need to decide what type of artist you are: touring or not touring.
It’s important to know where you are making your money from before taking an advance.
If you’ve built a fan base and you’re already a proactive touring artist, the majority of your money, like most, is probably coming from show guarantees and merch sales. You may not be the biggest or even big at all, but you’ll be able to keep your head above water by managing your money in a smart way.
When it comes to advances, you may look at it in a completely different light than an artist who has little to no touring experience and hasn’t made much of any gross income, possibly even negative net income.
How much should you be taking for artist advances?
The answer is and always should be the smallest amount you can take without starving yourself.
The trick when negotiating the terms is to know exactly how much will be spent toward marketing and promotion and have that number set. The less you take, the more you should be able to request toward that. This is what helps you make more money from where you actually make money, your live shows.
With the rapid decline of record sales, it’s smart to plan for the worst. If somehow you find a label that hasn’t wised up to the state of the business and is still throwing large numbers your way as part of an advance, you need to realize that it’s not real money. That’s money they are crediting you with upfront and then taking from your sales in the future. You usually won’t ever see a dime after your advance from your label if you can’t pay off the advance you take from your record sales.
That large advance also takes a chunk of your recording budget and marketing budget, and since you are the 99% you need, use that marketing budget to promote your new record to bring new fans to your shows where you sell merchandise and make your actual money.
What is a 360 Deal?
Think of it this way. You take the smaller advance, negotiate a larger recording budget and get a better quality album. Then, you negotiate a larger marketing budget and generate more people to hear your new, higher quality album.
If your new album does beat the odds and you sell a good amount to pay off the owed record budget, you get extra money every quarter. It may not be a lot, but money is money and having it in your hands as a little extra icing on the cake is far better than starving until that next record advance.
Don’t forget, you also help your label out. Not all labels are “the enemy” and are trying to squeeze every penny out of you while pocketing the rest. Most labels actually signed you because they believe in you and enjoy what you do. By not taking a huge cut, it allows them to increase their marketing for you and gain popularity in their respected scene through your brand.
Hopefully this helps you determine what type of advance you should take.
It’s always a gamble trying to “go big” in the music world. If you want to play your music as your career and not a brief successful stint, you need to plan to not be the next mega-star and instead plan on being able to thrive and adapt at any level you are at. If you do make that jump to the top, you will have the skills to manage it and be set for life.
Be smart, and you’ll see everything fall into place.