|
FROM THE DESK OF SHELLY HARRIS |
|
|
by: Shelly Harris / Entertainment Attorney
In the last two months I’ve been detailing
some of the things you should consider in deciding whether to pursue “major”
versus “indie” label interest for your band, and what items you
should closely examine in a prospective record contract. Of course royalties
are one of the most important issues where the latter is concerned, and
therein lies a great seed of confusion.
Hopefully, this little primer on the definitions of the various
royalties will help!
Let’s start with “artist”
royalties. These are the
royalties that an artist or band receives from the record label regardless
whether any of the songs on their prospective record are written by the
artist(s) or not. They are the specified percentage of each unit sold (and
it depends on whether that figure is wholesale or retail as well) that the
artists will receive from the record company.
Keep in mind that “advances” to the artists, often including
monies spent on the artists’ behalf on all (or a portion of) promo and
PR, are usually recoupable by the labels straight off the top from these
artist royalties. Because of that fact, even very successful first-release
artists often do not actually see any money from artists royalties until a
year or so after a record's release. However, the labels do have to
account to the artists for the album sales and potential royalties,
usually in quarterly intervals.
Which brings us to “mechanical”
royalties, which are royalties that only the songwriters will receive.
(Hence many a battle about the details of songwriting credits and
percentages!) As mentioned in
earlier Midwest Beat columns (found in our online archives at
www.midwestbeat.com), you will need to be registered with the
organizations like ASCAP or BMI to have access to these royalties, and you
should be registered both as a songwriter and as a publishing company,
since payments are made to each 50/50.
You usually receive
these royalties in two different scenarios: 1)
When your song is recorded by your own
group (payable to the songwriters by the record label) or… 2) by someone else (in which case you
receive a statutory percentage of just over $.07 per unit pressed).
However, keep in mind that a record company will often attempt to contract
to pay the songwriters less than the statutory rate if they are also
artists – or a member of a band – signed on their label.
On top of all that,
there are two other types of “royalties” than only the songwriters
and/or their publishing companies will receive: performance royalties and
payments for synch licenses. Performance royalties (regardless who is
“performing” the song) are generated from the public performance of
the song on radio stations, as well as venues, clubs, and juke boxes, etc.
This rate is usually
.05 to .15 per spin, depending on the audience size of the entities.
However, synch. license royalties, also payable only to the songwriters or
owners of a song, are the negotiated, contractual sums paid for using a
song in conjunction with film or other visual images.
As you can see,
exactly who writes the songs, even down to the percentage of the song a
songwriter is credited as writing, can be crucial financially.
Thus, unless this is all uniformly spelled out in a band agreement,
make sure to detail as fairly as possible the precise credits and
percentages on all your songs, both when you register your copyrights and
when you register the songs with your performance rights organization!
Web
Design By: All Rights Reserved © 6 String Design 2003
|
||
