Not only do name changes hassle the artist, but they effect the artist's publicity because people all of a sudden don't know who he is. What record labels do with contracts such as these is use power to control their artists and squeeze as much money out of them as possible. Why, then, do artists even take this route if they all understand how bad the deal can be? They take it because there is currently no other way to become famous. Individual artists often lack effective distribution and do not have the leverage to make their fans pay for their music. Most individual artists are stuck putting out free mix-tapes and singles in order to gain popularity. The only way they could hope to make any money is through a record label because they are so widely known and accepted (Fitterman; Barnet).
Now that we understand this relationship, we can discuss money, royalties, and recoupables. Contracted artists are paid a salary, or royalty, from their record company. Royalties, however, are not the net gain or economic profit of the artists; they exclude all of the other costs incurred through producing, marketing, scheduling, touring, and belonging to the label in the first place. In order even to belong to a record label, artists must pay an advance to their company. This advance is generally a strict percentage of their income negotiated for each contract. In addition to paying their advance, artists are required to pay a number of other expenses; these are recoupable expenses (Fitterman).
Recoupable expenses are dollars owed through recording costs, promotional and marketing costs, tour costs, damage costs (charged when fans damage anything during the concert, almost inevitable less you are a classical or jazz musician), music video production costs, and the list goes on. Normally these are paid as percentages; for example, 100% recoupment would mean every penny must be paid back while 50% means they owe back only half of the expenses.
