Royalties Earned from copyright ownership
Now that the ownership has been agreed, you will then agree with the artist pertaining to the different income streams from copyright. There are as follows:
Music rights (assuming the song is not signed to a third party music publisher):
1.) Sync royalties – when someone licenses the song in relation to TV/video projects. (50%/50% split)
Read: (“Music rights for film“)
2.) Public performance – royalties earned when the song is publicly performed or broadcast. (50%/50% split)
Read: (“Public performance music license“)
3.) Mechanical royalties (50%/50% split) – earnings per mechanical units sold (for third parties licensing the song). (Read:”What is a mechanical license?“)
4.) Master use – this is the royalty paid to the sound recording copyright owner for the use of master recordings. (100% share to the record producer if he owns the recording).
If you are selling and distributing the recordings; you need to agree with the artist pertaining to the share of sales units. Typically, this goes like this:
Recording artist royalties on downloads and sales of records – 30%
Producer royalties per downloads and sales – 70%
You have a higher percentage of shares if you own the master recording copyright. Things are very different when the records are released and owned by a recording label, the royalty share are as follows:
Artist royalties – 5%
Producer royalties – 5%
The remaining percentage goes to the recording label (that owns the recording). Of course, they also use the budget to further market the recording.
Other Important Terms to be agreed
As a summary, below are the most important terms to be included on the agreement with the artist. Hiring a lawyer can finalize all these important terms.
1.) Your responsibility as a producer – it should be stated in the agreement your task and responsibilities (e.g. creating the sound recording of the song to the satisfaction of the artist).
2.) Advance fees (if agreed) – this is optional only if you want to get paid with advance payment to get the recording started. In some cases, this advance is recoupable on your future royalties.
3.) Delivery of masters – includes the deadline, recording schedule and the method of delivery of master recording to your recording artist. You should also agree to terms pertaining to master recording revision, etc.
4.) List and number of songs to be recorded.
5.) Distribution of payments.
There might be some other terms, for the rest you need to consult with an entertainment lawyer.
About the recommended book for record producers, I own the book entitled “How to be a record producer in the digital era” by Megan Perry. It was a great book for new music producers as it covers all aspects of music production including the creative and legal topics. The paperback version is around $14 in Amazon.
Content last updated on July 23, 2012