There are two ways to look at it. Sure, if you just compare an AI contract with a contract for some other major label recording artist, it may not be as good. But on the other hand, the contract is part of getting a chance to leapfrog about a hundred thousand other artists and start a big career.
Or look at it this way - if you had the choice of going on American Idol, getting paid at least $200,000, getting exposed to about 30 million people, and then at the end having to sign a 7-year contract and a 10 year management contract, or just going on your own and spending the next decade playing in clubs and trying to work your way up the ladder with about a 1-in-10,000 chance of eventually getting a record deal with a slightly better contract, what would you choose?
The artists aren’t getting screwed. They’re taking a shot at stardom, and in return 19E gets a slightly bigger piece of them if they make it.
The ones who really get screwed are the contestants who just come short of the tour - the ones who get booted off just before the top 12. They get nothing from 19E and only make a few thousand bucks, but if they make it big they have to pay 15% of their non-recording income for ten years. But I don’t know that this has ever been an issue, because I don’t recall any 11th or 12th place finishers making it big.
That’s not really true. The only way they can stop any of them from recording or cutting an album deal with someone else is if they offer them an album contract as well. They don’t get to freeze them out of the business - they only get first right of refusal if some other record label makes an offer.
There is only one contractual obligation of importance that I could find - all of the top 12 have to agree not to make a record while their current season is on the air. This is eminently sensible, or else every time someone is booted off the show they’d be rushing crappy music out to take advantage of the publicity and it would hurt the show’s image.
I don’t want to paint 19E as the bad guys here - at least no more so than any other record label. They’re offering a product like everyone else, and the terms of the contracts are well known. Everything I’ve heard says that they treat the artists well if they sign them, and they’re good about releasing artists from their contracts if they no longer have an interest in them. About the worst thing you can expect from them is complete indifference after they’re done with you.
If you think about it, it makes sense. American Idol is way too valuable a franchise to screw up for the sake of scratching a few thousand bucks out of some 9th place finisher. And 19E knows there are music journalists out there just salivating at the chance to dish dirt on them. That probably keeps them much more on the straight and narrow than other record labels.
