INTRODUCTION
Most musicians start out with nothing but hope. And then if luck shows up, someone from a label calls. That moment feels like a sunrise. But then the paperwork arrives. Long pages. Heavy language. Clauses stacked on clauses. And suddenly, the dream starts sounding like a negotiation. The truth is simple: the music industry runs on contracts, not just melodies. Behind every rising artist is a legal structure that can lift a career or quietly smother it. Courts don’t usually interfere with these deals. They see them as business agreements between two parties, both competent, both free to choose.[1]
But artists aren’t always in an equal position. Not when the label has the legal team, the template, the bargaining power, and the money. Once you step into that world, you start noticing the invisible ropes of copyright assignments, exclusivity rules, the famous “masters” dispute, and revenue splits written decades ago. These are the real instruments shaping a musician’s life. And they matter more than any guitar riff.
WHEN COPYRIGHT SLIPS AWAY: THE FIRST POWER SHIFT
Every creative act begins with ownership. In theory, at least. Copyright automatically belongs to the person who writes the music.[2] That’s the romantic version. Reality sounds different. Most artists sign away their master rights early in their career. Sometimes, because they’re told it’s “industry standard.” Sometimes, because they don’t have leverage yet. Contracts often require “exclusive ownership” or “assignment in perpetuity.” Those phrases look harmless. They aren’t. Courts rarely overturn these arrangements; they enforce them as long as the contract is clear.[3] Indian cases go even further; they consistently hold that copyright transfers in music production are valid, provided they follow the Copyright Act’s basic rules.[4]
Once the signature is on the page, the label becomes the gatekeeper.
They decide how the track will be distributed.
Where will it play?
Who can license it?
The artist becomes the source of the music but not the owner of it.
That’s the unfortunate reality of the industry: the song belongs to the person who funded it, not the person who lived it.
EXCLUSIVITY CLAUSES: THE QUIET PAUSE BUTTON ON AN ARTIST’S CAREER
Picture this. You’re an artist who suddenly feels inspired. You want to release something raw and unplanned. Maybe a single recorded at 2 a.m. Maybe a surprise EP. But your contract won’t let you. Labels typically demand that all your music must go through them first, every track, every collaboration, every public performance that involves new material. Courts view this as a normal business practice.[5] Nothing unusual. Nothing oppressive. Just the way the industry works. George Michael fought Sony for years over a restrictive contract that limited his creative freedom.[6] The court still upheld the agreement. That case became a symbol and an example of how difficult it is for musicians to escape these legal webs once they’ve stepped into them.
This case, for as much hope that it induces, isn’t binding upon Indian courts. However, it gives a good look into how these matters can be dealt with fairly. Sometimes the label delays a release. Sometimes they “shelve” it. Sometimes they prioritise other artists. The result?
According to Section 27 of the Indian Contract Act, 1872[7], every agreement by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is void to that extent. However, this is only effective if there is vagueness in the exclusivity clause or if there are unreasonable terms being made.
ROYALTY STRUCTURES: WHERE MONEY LEAKS THROUGH THE CRACKS
Here’s a story every artist hears too late: the royalty system looks generous on paper, but the numbers rarely add up in the artist’s favour.
A typical royalty percentage sounds fine until deductions enter the chat.
Production costs. Marketing recoupments. Packaging fees that no longer make sense in a digital world. “Breakage fees,” a relic from the CD era. It adds up quickly, and artists often end up with a fraction of the revenue.
Courts have no jurisdiction over this matter. They treat these deductions as part of the contractual deal.[8] Digital streaming? That’s a newer battlefield. Contracts written in the 1990s didn’t predict Spotify or YouTube. Some artists argue that streaming should count as a “license” with higher royalty rates; labels argue it counts as “distribution” with lower rates. Courts have split on the issue internationally.[9] The ambiguity works in favour of whichever side drafted the contract in clearer terms; in most cases, the label.
360 DEALS: WHEN LABELS EXPAND THEIR TERRITORY
Once upon a time, labels controlled only the “sound recording.” Today, they want everything: tours, merch, endorsements, brand deals, even social media monetisation. Enter the 360 deal, the industry’s way of having a share in various revenue streams that an artist might have. Labels justify it by saying the industry changed. Revenue streams shifted. They’re investing more, so they want more back.[10]
Courts don’t reject these arrangements as long as the terms are unambiguous.[11]
In India, the legal framework governing such agreements is primarily the Indian Copyright Act, 1957. It distinguishes between the ownership of musical compositions and sound recordings. However, in practice, artists often assign these rights to record labels through contracts, especially under the work-for-hire principle under Section 17 of the Copyright Act, which allows the employer (in this case, the label) to be the first owner of the copyright.
Hence, the profit arising from said asset, from whichever source it arises, is to be enjoyed by the record label. But for artists, 360 deals mean one thing: Every new idea, every side income, every project, someone else takes a cut. It’s legal. But a superstar can negotiate. A newcomer rarely can.
SHELVING: THE MOST FRUSTRATING CLAUSE NOBODY TALKS ABOUT
The saddest part of the music business isn’t when an album fails, it’s when it never gets released at all.
“Shelving” happens when a label decides not to release a finished project.
No explanation needed. No timeline required. There is limited scope for judicial intervention due to the vagueness pertaining to it. This clause is rarely labelled directly as “shelving.” It hides inside exclusivity rules and delivery requirements. Courts, again, enforce these terms strictly.[12] If the contract gives the label discretion, that’s the end of the story. For many artists, shelving feels like censorship.
Their voice exists, just not publicly. Their careers stall. Their fanbase forgets.
And the law is vague when it comes to this matter.
IS THERE ANY RELIEF? A FEW THIN AVENUES
Not all hope is lost. Courts occasionally step in when a contract becomes truly unreasonable. Cases involving restraint of trade, unconscionability, or extreme inequality can push judges to intervene.[13] It’s rare, but it happens. Some newer contracts give artists partial rights back after a term. Some countries, such as the US, enforce reversion rights after 25–35 years.[14]
The same isn’t the case for Indian artists, as no such provision is present. Negotiated settlements also happen behind closed doors. The law may not solve everything, but smarter contracting can. Artists today are far better informed. They have managers, lawyers, advisors, and public awareness campaigns. Artists like Taylor Swift have turned ownership disputes into global conversations, forcing labels to rethink longstanding norms.[15]
The shift is small but real.
CONCLUSION
Behind every song is a story. Behind that story is a contract. And in that contract is the real power. Record labels aren’t villains. They take risks. They invest huge sums. They help build global careers. But the legal structure they operate within leans heavily in their favour, and courts support that structure unless something is blatantly unfair. Artists sign early because they’re hopeful. Music Labels draft contracts carefully because they’re experienced. And the law? It simply enforces what the page says. The challenge is balance. The solution is awareness.
The future depends on artists’ understanding the legal world as deeply as they understand the creative one. Maybe then the music industry will sound a little more like harmony and a little less like a contract negotiation.
Author(s) Name: Biprajit Chatterjee (Shyambazar Law College)
References:
[1] L’Estrange v F Graucob Ltd [1934] 2 KB 394
[2] Copyright Act 1957 (India) s 17
[3] Zeffertt v Barfield Music Publishing Ltd [2001] EMLR 15
[4] Indian Performing Right Society Ltd v Eastern Indian Motion Pictures Association (1977) 2 SCC 820
[5] Schroeder Music Publishing Co Ltd v Macaulay [1974] 1 WLR 1308
[6] Michael v Sony Music Entertainment (UK) Ltd [1994] Ch 614
[7] Indian Contract Act, 1872
[8] Reveille Independent LLC v Anotech International (UK) Ltd [2015] EWCA Civ 1028
[9] F.B.T. Productions, LLC v Aftermath Records 621 F 3d 958 (9th Cir. 2010)
[10] Passman D, All You Need to Know About the Music Business (10th edn, Simon & Schuster 2019) 112
[11] Krasner v CBS Inc 653 F Supp 1189 (SDNY 1987)
[12] Read v Lyons & Co Ltd [1945] KB 216 (general principle of contractual discretion)
[13] Alec Lobb (Garages) Ltd v Total Oil (Great Britain) Ltd [1983] 1 WLR 87
[14] Copyright Act 1976, s 203
[15] Seabrook J, The Song Machine: Inside the Hit Factory (Norton 2015)
