To begin with, the contract replaces the term "master," which has roots in slavery, with the more neutral word "primary." The artist retains full ownership of their primary, and the label retains an exclusive license for a mutually agreed-upon term of one year.
The artist and record label each receive 42% of net profits during the term, while the remainder is split between collaborators. That comes out to 10% for producers, co-producers and executive producers, 4% for songwriters and 2% for mixers and engineers. "It isn't anything crazy or some weird math," Salibian says. "It's just, what will make the collaborators feel like they are appreciated and a part of the work?"
Unlike most record labels, Nvak will also provide advances to songwriters. "Tamar and I know what it's like to be in that [writing] room, spend 8 to 12 hours there, and leave with literally nothing in your pocket," Salibian says. "It doesn’t feel good."
Kaprelian hopes that these advances will help equalize the playing field for aspiring songwriters, too. "People end up just dropping out because they literally cannot afford to stick in the game anymore, and that's not fair." At the same time, she adds that the label will never give an artist or songwriter an advance so large that recouping it is impossible. "The point of advances [would be] 'how much do you need to live?'" Kaprelian says. "And then how do we get you recouped as fast as possible, so you can start making a living off the music that you make?"
Finally, the contract stipulates that the label will provide healthcare, dental care, mental health services (like therapy), financial management, life coaching and a nutritionist -- all offerings rarely found in recording contracts. Kaprelian’s thinking is simple: If label employees are entitled to many of these services, why aren’t artists? "We want them to be as confident on the inside as they possibly can," she adds. "That ends up equaling long-term, sustainable careers that don't fizzle out and end in burnout."
Kaprelian first unveiled Nvak Collective in the fall as a certified B-corporation, meaning it is for-profit but has a social good mission attached. It implements a 70/30 model where 70% of the label's signees will come from under-developed countries, and 30% will come from developed markets (like the U.S., U.K., Canada and Australia) and donate their time and talent to help mentor the larger group. So far, the Nvak roster includes Armenian pop artists Rosa Linn and Brunette, Malawian singer-songwriter and producer Esther Lewis and Lebanese singer-songwriter Talia Lahoud.
A percentage of label profits will help fund Nvak Foundation, which has executives from Interscope Records and Atlantic Records on its advisory board and provides music education programs to musicians in countries where those resources are slim. That includes Armenia, where Kaprelian and Salibian both have heritage ("Nvak" means "to play music" in Armenian).
Music education remains central to all Nvak projects: Kaprelian recently partnered with songwriter Ali Tamposi (who has written for the likes of Beyoncé, Justin Bieber and Dua Lipa) to launch the songwriting and production e-learning series "Song Start" on Spotify's new Noteable platform.
The recording contract Nvak is unveiling today is is inspired by the Simple Agreement for Future Equity (SAFE) that the tech accelerator Y Combinator introduced in 2013 to simplify the process of early-stage fundraising. In that way, Kaprelian and Salibian hope their contract can serve as a model for the music industry, providing transparency, protection and financial freedom for all involved.
Salibian notes that their proposed contract would have the added benefit of pushing labels to do better-quality work: "You can't provide everyone healthcare and take only 42% of the profit if you have 20 duds" on the roster, he says. And if a brand-new, independent label that works with artists from emerging markets can do it, Kaprelian reasons, so can everyone else.
"This conversation has been percolating within the creative community for a while, and we want to be the first label to say, 'You know what? Enough is enough,'" Kaprelian says. "There's no excuse for anyone else, because everything is stacked against us and we're still going to do it."
Review the agreement terms below.
"Simple Agreement for Artist and Label"
- Renaming of the “Master” to “Primary”
- 1 year term
- Exclusive License for a mutually agreed upon term
- Artist retains full ownership of their Primary
- 42% of net profit from Primary for the Artist
- 42% of net profit from Primary for the Record Label
- 10% of net profit from Primary reserved for Producers/Co-Producers/Executive Producers
- 4% of net profit from Primary reserved for Songwriters
- 2% of net profit reserved for Mixers/Engineers
- Label provides the following services:
- Dental care
- Mental health services (i.e therapy)
- Financial management
- Life coaching