Spec deals can seem like the perfect opportunity for a musician with no money: Make your album now, pay later when you're rich and famous. However, unless the musician is careful, they can get into a situation where they can't finish their album or wind up tremendously in debt. Read this article to learn how to avoid such problems.

The word "spec" stands for speculation. Speculation on the part of one of the signatories to a deal for which they may not get paid. "Spec" deals can be very attractive and useful, but they can also be very complicated and sometimes quite restrictive.

A very simple example of a spec deal would be for an independent producer to agree to work on your recording project for no money up front. Instead they would get paid when the recording was sold directly to the public, to a music company, or both. On quick inspection, you might think this sounds wonderful. You could get all types of services on spec and not have to pay until your masterpiece is rocketing up the charts. Great! In theory, yes; in reality, not always so great.

One drawback to spec deals is that the party doing work on spec will usually be asking for a larger payment than if you had cash up front. What might have been $1000 of studio time for cash could end up costing quite a bit more on spec. The logic behind this is that the studio is waiting to be paid and is taking the very real risk that they may never get paid. You may never sell the recording. Some spec deals specify payment in the form of a percentage of artist royalties. In these cases, the artist could find themselves paying for years. If you were to sign spec deals with a studio, a producer, an engineer, a duplicating house, a distributor, and a publicist, you might find yourself in the position of signing away all your royalties. Why would anyone sign a deal like this? Because they have absolutely no other way to pay for services, and they will never have a career if they don't get into a studio.

Read on at "Fast Forward".