In some entertainment industries, personal service agreements are structured using options. Options give a producer the right to extend an agreement for several time periods. For example, a record company may contract with a musician to provide one album during the first year of the agreement, with an option to extend the contract. After one year, if the record company feels it would be economically wise to release a second album by the musician, the record company may exercise its option and require the musician to provide the second album. Under option contracts such as this, producers can keep artists on their roster for many years, or as long as the artists are profitable.
Some option contracts can be disastrous for the artist.
Musicians sometimes sign an option agreement without a provision that they can break the agreement if the record company fails to release their products. Many recording artists have been held in professional limbo by record companies that refuse to release their music and also refuse to allow them to record for another company. This practice, known as shelving, is used by some record companies to prevent economically risky artists from becoming valuable assets to other record companies. Other entertainment industries use short-term personal service agreements rather than option agreements. For example, film studios often contract with actors, directors, screenwriters, and other creative artists on a one-film basis.