If the label presents them with a contract that the band don't want to sign, all the label has to do is wait. There are a hundred other bands willing to sign the exact same contract, so the label is in a position of strength.
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You see something happen to a population whereby everyone adopts something that's just preposterous in a way that makes it normal instantly. If any one person prior to the rash of puka shells, for example, was seen wearing puka shells, he would look like an idiot. But when everyone is wearing them, it instantly makes them normal.