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help with contract

bassicly alot of this stuff I don't understand...if anyone with some experience could explain what im signing here it would be sweet:





At the request of ***********, (the �Label�), you will create
master recordings of one (1) musical compositions (the �Track�) embodying the performance of yourself, ****************(the
�Artist� or �you�) to be delivered to the Label on January 1, 2008. In consideration
of your services in connection with the Track, you will be entitled to the following
compensation (the �Compensation�):
� Royalties.
o 50% of record sales net revenue and ringtone licensing net revenue
(after all costs associated with production, manufacturing and
distribution have been fully recouped),
o 50% of digital download sales net revenue (after all costs associated
with production, manufacturing and distribution have been fully
recouped); this includes Label�s direct sales and sales via third party eretailers
(e.g. iTunes, Amazon, Real Rhapsody, Napster, Beatport,
etc.), and
o 50% of all other net licensing proceeds, should a 3rd party licensing
agreement arise with regard to the Track.
Royalties shall be paid by the Label for a term extending in perpetuity from the
date of this agreement, accountable and payable to the Artist within ninety days
after every six months (the �Royalty Period�) from the dates ending June 30th and
December 31st . Royalties will only be paid to the Artist if the Royalty amount due
for the Royalty Period totals to $50 USD or greater; if the amount totals to less
than $50 USD, that period�s royalties will be added to the total in the following
Royalty Period until the total of the Royalty Period exceeds $50 USD. All
Compensation monies will be payable to the Artist by the Label in US dollars if and
when they materialize and/or are received by Label from its payees. All
Compensation shall be remitted to the Artist�s legal name and mailing address, as
stipulated in Section 4, subsection B, sub-subsection V below. Any Local, State,
Federal Government, or any other applicable taxes on the Artist�s income, as a
result of any Compensation paid by the Label, will be the Artist�s sole
responsibility. Label shall have the right to hold reasonable reserves. Upon
reasonable advance written notice, financial disclosure will be made available to
the Artist at his/her sole cost and expense with regard to record sales and/or
licensing agreements solely in connection with the exploitation of the Track. The
Artist shall the right to review any particular statement one time for up to two
years following the date Labels send you that statement.

You, the Artist, represent and warrant that:
1. You have the right and power to enter into and fully perform this
agreement. You will not enter into any agreement that would interfere with
the full and prompt performance of your obligations hereunder.
2. The musical compositions have not been previously recorded.
3. The Track will be considered a work made for hire for the Label. Since the
Track are deemed to be a work made for hire, they will be deemed
transferred and assigned to the Label by this agreement, together with all
publishing rights in the musical compositions, in consideration of the
Compensation.
4. The Track will be delivered by the Artist to the Label within one (1) calendar
day of the signature of this contract. The delivery of the Track must meet
the following criteria:
a. The Track must be delivered via one of the following methods:
i. Digital transfer of the Track in the form of a .wav or .aiff digital
file encoded at 44.1KhZ and 16bit resolution, by the Artist to
the Label.
ii. Physical delivery of an audio CD containing the Track, by the
Artist to the Label.
b. Accompanying the delivery of the Track by the Artist to the Label, the
Artist must furnish all of the following:
i. Desired name of the Artist on the release of the Track.
ii. Desired name of the Track and accompanying versions
(commonly referred to as �mixes�).
iii. Written duration of the Track including a two (2) second pause
of silence inserted by the Artist at the beginning of each Track.
iv. Any credits that the Artist wishes to appear in writing in
conjunction with the Label�s release of the Track. The Label
reserves the right to modify the wording of these credits or
abstain from publishing them altogether.
v. The following information, in writing, regarding the Artist:
1. The Artist�s full legal name.
2. The Artist�s full legal mailing address and telephone
number(s).

5. The Label will not be required to make any payments of any nature for, or in
connection with, the exploitation of the Track other than the
Compensation.
6. The Track may be declined for publication by the label for any reason upon
completion of production, which will forfeit the Artist�s claim to any
Compensation set forth in this agreement.
7. The Track do not contain any unauthorized samples. It is understood and
agreed that any samples (including both master and publishing samples)
are your sole responsibility and have been cleared and/or paid for by you. If
any roll-over or royalty payments are required in connection with any
sample, you have furnished the Label with all documentation relating to
such payments prior to the signing of this agreement, provided that you
shall remain responsible for all such payments. The Track do not infringe or
violate the rights of any party. If any party has been employed by you in
any capacity toward the production of the Track (e.g. engineers, vocalists,
musicians, etc.), their agreement with you is deemed separate and you
warrant and represent that those parties have no further claim whatsoever
on the Track of any monies derived from it.
8. The Label and the Label�s licensees, successors and assignees shall have the
exclusive and perpetual worldwide right to the Track, and may grant to
other persons or parties the right to reproduce, print, publish or disseminate
in any medium your name and likeness for trade, promotion or advertising
purposes in connection with the making and exploiting of records
containing the Track.
9. You will at all times indemnify and hold the Label and any of its licensees
harmless from and against any claims, damages, liabilities, costs and
expenses (collectively, �Costs�), including counsel fees, arising from breach
or alleged breach by you of any representation or warranty contained in
this agreement. The Label will have the right to set-off and appropriate any
sums otherwise payable to you, whether or not related to an agreement
between you and the Label, and apply such amounts in reduction of the
Costs.
10. The above covenants will be governed, enforced and mediated by the
courts of the State of New York, the United States of America.

The first section outlines the royalties you'll get from having your track signed to this label. Section two states the requirements your track needs to meet before being presented to the label.

The final section has you giving your track away forever (seems to be some work-for-hire). If you wanted the track back you probably wouldn't be able to afford the legal expenses.

You should get a lawyer or find someone very knowledgeable in law to help you draft a new contract (or at least a new third section).

Re: help with contract

quote:

3. The Track will be considered a work made for hire for the Label. Since the Track are deemed to be a work made for hire, they will be deemed transferred and assigned to the Label by this agreement, together with all publishing rights in the musical compositions, in consideration of the Compensation.

Dont give them the publishing... they are making money from the mechanicals already....

Go see a specialist music business lawyer NOW

If they do proper publishing it is more interesting to do sign for publishing as well. However a lot of digital labels just `abuse` publishing to gain a bit of extra income.

It's not so much like you would need a lawyer or anything. Just some proper insight in the label you are signing to. Of course the terms of a contract are negotiable and the label manager should be more than able to answer your questions.

Re: Re: help with contract

Thanks for helping me out guys.

quote:

If they do proper publishing it is more interesting to do sign for publishing as well.

what are some examples of "proper publishing" ?

quote:

Originally posted by Freak Dont give them the publishing... they are making money from the mechanicals already....

quote:

The final section has you giving your track away for ever

I don't even know what "publishing rights" are..or, what a label might do with the publishing rights?

from wiki:

As intellectual property, copyright ownership can be bought, sold, or inherited, as can rights to royalties under a publishing contract. Several bands and artists own (or later purchase) their own publishing, and start their own companies, with or without help from an outside agent. The sale or loss of publishing ownership can be devastating to a given artist or writer, financially and emotionally.

what would be the regular terms in a contract rather than the label having the publishing rights?

how should I aproach this problem, Should I just ask to retain all the publishing rights to the track? and if they agree, sign away? this is what im leaning towards doing at the moment.


I also found this on wiki:

Traditionally, music publishing royalties are split fifty/fifty, with half going to the publisher (as payment for their services) and the rest going to the songwriter

would a 50/50 split on publishing be more appropriate?

thanks heaps for any help on this, im fairly lost at the moment.

one more thing I have found:

YOUR PUBLISHING RIGHTS ARE WORTH MONEY -AND /OR DO NOT GIVE UP YOUR PUBLISHING RIGHTS WITHOUT A FAIR EXCHANGE OF MONEY FOR RIGHTS..!

I AM NOT TALKING 'SINGLE SONG CONTRACTS'-which is entirely a different scenario if you are an unpublished Writer with no track record at all.You can expect that they will ask for the Publishing-but by inserting a reversion clause in that contract-(and a term of not more than 18 months) -the rights will legally revert back to you if the Publisher is unsuccessful in placing your song.

maybe this is the way to go?

Re: Re: Re: help with contract

quote:

Originally posted by Kid_presentable what are some examples of "proper publishing" ?

Publishing mostly is placing your product at 3rd party companies. CD compilations, tv show background music, those sorts of things. There are more things which should be taken into account but that's generally it.

Proper publishing would be when this actually happens. In general with common digital labels, it doesn't. I consider publishing to be proper when the publishing services create more income than you would have had without them. Some income related to the track could be directly transfered to you if you sign up at the appropriate places instead of being collected by the publisher which will then take 50% as your contract says.

Anyway, if the label you are talking about doesn't have any tracks coming out through 3rd party products this publishing thing isn't interesting at all. It will not make much of a (financial) difference in such a case.

Be careful with the publishing - if you're not sure ask a lawyer. It may not be cost effective for this track but if you plan on making money from in the future, it will be a great education and probably the best return you'll ever get from a few hundred bucks as it will mean you actually get paid in the end.

The work for hire part means they own the track. If it were to do really well (sales, downloads, cd compilations, TV adverts) you would have a bad deal and they would make a lot more. But unfortunately, this probably is a deal breaker. The upside to this is that labels work harder to promote the track if they are going to get more money for themselves but this is good for the artist as you get exposure.

It's not quite the same thing becuase you will at least get a percentage of the sales etc, but think of Timo Maas's mix of Azzido Da Bass - Doom's Night. He got paid 2k for that remix and never saw another direct penny. It did though make him very famous and put him on to the upper earning bracket of EDM producers and Dj's. The record probably made Azzido and the label a few hundred thousand each (at least).

To protect your catalogue (over time), the reversion clause idea is the way to go if you are going to give them the publishing.

You have to weigh up if the giving up of your ownership of the track is worth the exposure (and in many cases it is when starting out). Also maybe try to speak to another artist on the same label and see what deal they got (if they got fleeced or looked after etc.) - obviously don't ask someone that is so hooked up with them you won't get the truth.

Lastly, I am very sceptical of labels, full stop - you never truly know how many units they have sold, especially at this level (i.e. small unit sales) and in these mediums (ringtones, downloads on several different sites, and in different territories, so it really makes sense to go in prepared - it will cost a lot less in the long run to get sorted before you enter as deal, than it will cost to get it sorted after.

quote:

Originally posted by DJ RANN It's not quite the same thing becuase you will at least get a percentage of the sales etc, but think of Timo Maas's mix of Azzido Da Bass - Doom's Night. He got paid 2k for that remix and never saw another direct penny. It did though make him very famous and put him on to the upper earning bracket of EDM producers and Dj's. The record probably made Azzido and the label a few hundred thousand each (at least).

]

Bad example really...
That was a remix not timos track.
In pre download days it was not very common at all for remixers to get a % of sales, they got a flat fee, and that was it.
Another example of that would be armand van helden with professional widow... but then everyone knew the score with remixing in those days and used it as a means of exposure.

quote:

Originally posted by Freak ] Bad example really... That was a remix not timos track. In pre download days it was not very common at all for remixers to get a % of sales, they got a flat fee, and that was it. Another example of that would be armand van helden with professional widow... but then everyone knew the score with remixing in those days and used it as a means of exposure.

That's my whole point with the Timo example. I said it not the same case (as in owning or writing the track yourself) but your example was only 3 years earlier and if anything should highlight moreso the fact that Timo stood to make a lot of money with the track if he had opted for points (publishing) rather than the flat fee. i.e He did it as a work for hire.

my response to label:

quote:

I'm happy with the majority of the contract, but have some concerns regarding section 3 of the contract which states I am to forfeit all publishing rights to the label. Can you tell me why this is necessary, I feel that I should retain the publishing rights, or at least retain a percentage of them.

label response:

quote:

Publishing rights are traditionally assigned to the label to prevent the re-publishing of the material on other labels. Not that you would ever do this, but without this clause the artist would have the ability to essentially sign the track over to another competing label. It's a standard clause, especially in the world of digital labels in which the Territory is the whole World.

hey make sure they show you the actual # of sales on a periodic basis - like once a quarter, etc. EVEN IF YOU HAVEN'T SOLD A SINGLE TRACK. you need to know what's going on with sales at all times.

even if you dont hit the $50 mark, you should be able to see the detail.

quote:

Originally posted by Kid_presentable my response to label: label response:

The label response is correct, but should you ever want the track back or to re-release it later, they will own it.

Look also at no.6 - it's perfectly normal but you might want to get an amendment. If they decided not to put it out (for any reason like the label switched genres or ran out of money so did not have funds to promote it for instance) you could never get it back and another label could be interested in it. I would enquire about getting a limitation on their time to publish it, so for instance if they didn't publish it within a year of receiving it, the right would revert back to you. The way to pitch it to them is to say something along the lines "I don't have a problem with you having the publishing as I want the exposure you'll give me but in case you decide not to publish within "x" months/years I would like to have the publishing revert back to me". make sure you spell it out to them this is only in the case of them not publishing it (so you're not suggesting it reverts back to you regardless of reason after a certain period). This would not be regarded as an unreasonable request and will make sure they actually do something with the track (I've known people who have worked really hard on great tracks which never got released).

One final point: it does not need to be in the contract but make sure you let them know in writing (before signing) that you reserve the right to audit them (for sales figures, licencing etc.) at any point. It will tell them that you're not going to blindly trust them so hopefully they will think twice about screwing you.


I know this may seem all rather paranoid and hopefully you'll go on to have a great relationship with them but but it really doesn't hurt to protect yourself.

thanks for the quick response rann.

I'll let you know how it goes.

Apologies in advance if this gets waffley but its late and im not working tonite (that strange period between xmas and NYE) so fuck it, ive written lots. This is all me btw- not some cut and paste.


You need to do some reading and get some advice on what right you have as the song writer and performer.

-You as the writer have publishing/writing rights to assign to whoever you choose.

-You also as the performer in this case, you have the right to assign the rights to reproduce and distribute this particular recording ("performance") to a label. There is a HUGE difference between 'work for hire' vs the label purchasing a copyright.

Mechanical royalties apply to the recording.
Performing royalties apply to the writing (publishing).
The two sets of rights (which at the moment you and you alone control- they are part of what is known as the 'restricted acts') are different and seperate.

I will give a hypothetical example...:
You sign the contract as is.
The label then owns the recording, the track and the publishing (writing). Period. In effect, as it was a 'work for hire' you never owned it in the first place! Yes really...
20 yrs down the line..someone does a cover version of your song. This cover version is huge, sells a million copies, and gets played on every single daytime radio station once an hour for several years- its massive.
Your contract says:
"5. The Label will not be required to make any payments of any nature for, or inconnection with, the exploitation of the Track other than the
Compensation" (compensation being listed as 1) 50% of record sales net revenue and ringtone licensing net revenue and 2)50% of all other net licensing proceeds, should a 3rd party licensing
agreement arise with regard to the Track.).

Now, as you signed over the publishing rights to them, the label can then negotiate and keep any and all songwriting royalties earnt from this new cover version which is selling millions. It is theirs to do with as they wish.

Scary huh?


Now, if you had kept the publishing, or assigned it to a specialist music publisher , you would get a chunk of change (negotiable of course) as the writer.

In these days of sampling, endless cover versions and recycling of things many years down the line, and things like video games coompanies putting source music in their games I would be VERY cautious over what you sign.

quote:

label response: [quote: Publishing rights are traditionally assigned to the label to prevent the re-publishing of the material on other labels. Not that you would ever do this, but without this clause the artist would have the ability to essentially sign the track over to another competing label. It's a standard clause, especially in the world of digital labels in which the Territory is the whole World.

Without that clause, you still would not be able to release the recording (the "performance") you submitted to them on another label as they own the rights to that recording/performance.

The contract also says nothing about airplay/club/shop play royalties which if the label is registered with the PPL they will get as they own the publishing rights.

I hope that makes some more sense to you. Like I said, try and get some professional advice.

I know it may seem like paranoia or too in depth for a small track release, but believe me, the record business is full of people just lining up to suck every cent they can from you and bend you over and fuck you up the ass.
Never ever sign anything over without having a clear idea- or someone you trust having a clear idea- of EXACTLY which of your rights you are signing over.

Just be careful is all... and congrats!

wow alot of info here.

thanks for this mate.

Im not really sure how I should approach this, as the label is saying
they need the clause and you have just told me this is incorrect.

Could I write back and say "Without that clause, I still would not be able to release the recording (the "performance") I submitted to your label, on another label as you [the label] own the rights to that recording/performance". ??

as far as proffessional advice, I do not have a cent at the moment, and the label is pushing for the contract to be finalised within a few days. [ I wont be signing in a hurry though ].

Well, people have already given you a lot of advice here, but heres my two cents for all they're worth...

There are two parts to making money from a signed track usually, theres the amount of money you'll be given by the label straight up, and the amount of royalties that you'll recieve from the sales.

If you're signing the track over to the label (which you are) for any period (or forever), you can expect to recieve compensation direct from the label. This might be hundreds, or thousands or hundreds of thousands, but its the label paying you for giving them the rights to the track. The rights may still revert to you after 5 years or more, in which case its like the label is paying to rent the track off you and sell it.

Seperate to this is the royalties you might recieve on the track, which in your case is 50%. This all appears to be in order in your contract.

The things I would be concerned about are
1/ your not being payed upfont from what I can see. You should be payed if your signing the track over to them, and not simply using them as a distribution mechanism.

2/ your signing it over permanently. There should be a clause which makes the rights revert back to you.

3/ you don't have ANY control over the presentation of the track.... They can even change your liner notes here, I wouldn't like that but maybe your not fussed.

I suspect they're stuffing you around a bit with the rights, they don't need to have the rights, you can give them an exclusive (thats what they want) license to distribute the track for 5 (or whatever) years, with 50% of the royalties going to them....

Hope this makes sense; I haven't actually had any personal experience, but I have read up on this sort of stuff and I think this is all right. This is only for one track, so maybe its not AS important, but I strongly recommend you go see a lawyer anyway.

thanks rann, freak, kit.

waiting for labels response.

I am with the other gents on this but have my own perspective too.

You are basically signing away your music. I'll be frank, they are offering you pretty much nothing in return for your track.

They want publishing too! That is not good.
You need to get a very clear idea of what they are willing to do for you.

The thing that bugs me the most is that they can't even be bothered to check the content of their own contract as the grammar is heinous in some places and should not be present in a legal document.

If this is a purely digital label I would say don't bother. If you have the potential to press CDs or even vinyl make sure you negotiate the contract.
Check and see if this label has released on other formats other than just digital.

Sadly you see too many bright young talents sign away their music because they have been overwhelmed by the thought of being signed to a label. Take the time to speak to a legal professional. Although you have been very lucky with some of the responses here as there is plenty of good information do not be foolish and rely totally on the members of an internet community. Seek the advice of a professional. See if there are some points that you can negotiate. Sure it might make the deal go sour but if it's a sour deal already what have you lost?

Find out what sort of promotion they are going to give you. If they are not prepared to do that then you are better off starting up your own label.

Cheers
Nem

Legal professionals are expensive and cost money right? Is it even worth it even if it's a small digital label?

Legal professionals are expensive and cost money right? Is it even worth it even if it's a small digital label?

If this is a small digital label I would honestly tell them to get stuffed for giving me a contract like that.

Cheers
Nem

quote:

Originally posted by Freak Apologies in advance if this gets waffley but its late and im not working tonite (that strange period between xmas and NYE) so fuck it, ive written lots. This is all me btw- not some cut and paste. You need to do some reading and get some advice on what right you have as the song writer and performer. -You as the writer have publishing/writing rights to assign to whoever you choose. -You also as the performer in this case, you have the right to assign the rights to reproduce and distribute this particular recording ("performance") to a label. There is a HUGE difference between 'work for hire' vs the label purchasing a copyright. Mechanical royalties apply to the recording. Performing royalties apply to the writing (publishing). The two sets of rights (which at the moment you and you alone control- they are part of what is known as the 'restricted acts') are different and seperate. I will give a hypothetical example...: You sign the contract as is. The label then owns the recording, the track and the publishing (writing). Period. In effect, as it was a 'work for hire' you never owned it in the first place! Yes really... 20 yrs down the line..someone does a cover version of your song. This cover version is huge, sells a million copies, and gets played on every single daytime radio station once an hour for several years- its massive. Your contract says: "5. The Label will not be required to make any payments of any nature for, or inconnection with, the exploitation of the Track other than the Compensation" (compensation being listed as 1) 50% of record sales net revenue and ringtone licensing net revenue and 2)50% of all other net licensing proceeds, should a 3rd party licensing agreement arise with regard to the Track.). Now, as you signed over the publishing rights to them, the label can then negotiate and keep any and all songwriting royalties earnt from this new cover version which is selling millions. It is theirs to do with as they wish. Scary huh? Now, if you had kept the publishing, or assigned it to a specialist music publisher , you would get a chunk of change (negotiable of course) as the writer. In these days of sampling, endless cover versions and recycling of things many years down the line, and things like video games coompanies putting source music in their games I would be VERY cautious over what you sign. [/b] Without that clause, you still would not be able to release the recording (the "performance") you submitted to them on another label as they own the rights to that recording/performance. The contract also says nothing about airplay/club/shop play royalties which if the label is registered with the PPL they will get as they own the publishing rights. I hope that makes some more sense to you. Like I said, try and get some professional advice. I know it may seem like paranoia or too in depth for a small track release, but believe me, the record business is full of people just lining up to suck every cent they can from you and bend you over and fuck you up the ass. Never ever sign anything over without having a clear idea- or someone you trust having a clear idea- of EXACTLY which of your rights you are signing over. Just be careful is all... and congrats!

Great post Freak! (Also, same to kit, and nem (as usual!))

I really think there needs to be a sticky about this. I suppose a tutorial wouldn't quite fit, but at least a thread about what to go for and what to avoid, including a glossary of terms involved with contracts.

Very good post - thanks all, maybe make this sticky???

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