Advances are cash payments given to an artiste by the Record Company, Publishing Company, or Distribution Company. They, however, are not given free but rather with strings attached. One should understand that companies offer advances for various reasons, but primarily as an incentive to the artiste and to assist the artiste’s function.
Artistes, like humans, have needs that have to be met. Most of these needs can be solved with money. As such, the artiste needs money to solve the
needs to enable them to focus on the creative side. With the advance, the artiste can pay rent, bills, invest in their career, clothes, entertainment etc. An advance can range from N500,000 to N50,000,000, depending on the artiste, the type of deal, the prior success of the artiste, and the risk the Company is willing to take at that time. Advances may seem juicy and a lot at first, but never forget that strings attached are generally not designed to be favourable, as the Company will be protecting its interest.
For starters, the advance is to be repaid to the Company, and this burden is ultimately on the artiste. Also, by paying this advance, the Company often gets ownership of whatever copyright is created in perpetuity (depending on the type of deal) until it enters the public domain. The deals and advances are business contracts, and just like any other contract, there are specifics and terms you need to be very aware of before signing.
An advance is typically a loan against the future royalties you will earn. When you start your deal, you begin in debt/red, owing to large amounts of money to the Company, which will be paid back by your future earnings. What is seemingly worse is that you also do not own a significant source of earnings (the copyright). The advance repayment is usually long–term, taken from the royalties that your music earns. This means that when your music starts getting royalties, the Company will generally not pay it to you till they have recouped the advance and expenses expended on you. This does not mean you should say no to being signed or receiving an advance. Being signed has its advantages; more often than not, artistes need the advances mentioned earlier. The best option for an artiste is to properly weigh the offer of the label, i.e. what you are giving to the label (ownership) in exchange for what they are giving you (the advance), and to carefully spend the advance, noting that you may not receive money from the label for a long time.
Whether an advance is the right move or not for you is a decision only you can make. However, in making that decision, you should ensure you are armed with the correct information and fully understand what you are getting into. This is best done by contacting a lawyer to advise you on the offer from the Company.
A company that decides to give you an advance is investing in you and your career to make a profit. The Company projects the total amount of money they intend to spend on you and then divides it into the various aspects they will be spending on, e.g., advance, recording cost, artiste development, marketing and promotion etc. Do not forget that whatever amount is spent on you will be recouped from future earnings.
When collecting an advance, ensure that you do not spend it lavishly, as you may not receive any money from the label anytime soon, and even if you do, you are just taking loans from future earnings. Spending it on urgent needs is better and keeping the rest for future use. That way, you still have money in the future. Whilst there is no specific thing or instructions on how to spend an advance, an artiste should never forget that “no matter what they spend the advance on, it is to be repaid to the label.”
Furthermore, an enormous advance is not always good news. It means that there may be less money available to spend on marketing and promotion of your records etc. It also could tell that it may take a longer time for the Company to recoup, meaning that you will not be paid soon. In conclusion, never treat advances as free money, gifts or dash. They are
loans, credits, or income is given to you by the record label, which will be charged against your future earnings.
Lastly, stay up to date with all you need to know about African music at S.O.A., right here.