What is an option in a label contract?

Imagine you sign with a label for one album. But the contract says: plus two options. An option means the label gets to decide whether it makes another album with you. It may, but it doesn't have to.

• If your album does well, the label picks up the option. Then you make the next album there.
• If it does badly, the label lets the option lapse. Then you're free.
• You can't simply leave as long as the label still has options.

For the label that's good: it takes little risk and can hold on to a success for a long time. For you it can mean being tied for years, even if other labels would offer more.

What to look out for

• How many options are there?
• By when does the label have to decide? A clear deadline matters.
• Does the advance go up with each further album?

All figures are rough guidelines for beginners and focus on Germany. They are no substitute for legal or tax advice.