Recording Agreement Questions

[avtoys]

Hopefully, you guys may be able to help me with this.

An independent record label has expressed interest in my music. The way I have done it with other indie labels has been to issue them a mechanical license to press, distribute and sell my music(usually in the form of a four-song ep)in exchange for a fee. For a five year period they can do with the tracks as they please.

This label however, wants perpetual ownership of the tracks. Has anyone ever heard of this?

Company shall have the exclusive, perpetual and worldwide ownership of the Masters

and all records manufactured therefrom.

I take it as meaning ongoing, lifetime, infinite. Correct?

Instead of a "fee" they want to give me an "advance" which is 100% recoupable from the royalties. In other words, if my record doesn't sell enough for the company to recoup the advance money they gave me upfront, I will owe the company the remainder. Is this correct?

And this one is quite scary.

INDEMNIFICATION: Artist agrees to indemnify Company against, and hold Company harmless from, any and all claims, liabilities, causes of action, damages, reasonable expenses, costs of defense (including reasonable attorneys' fees and court costs) and other costs arising out of or in any way related to any breach or claimed breach of any representation, warranty or agreement by Artist contained in this Agreement. Artist agrees that Company may withhold sums otherwise due to Artist hereunder in amounts reasonably related to such claim(s) until such time as such claim(s) are reduced to a final judgment by a court of competent jurisdiction or are settled.

Any one her knowledgeable on any of this? Damn ASCAP couldn't even help me and I'm too broke for a lawyer.

And how can I be assured that my record will be promoted and pushed aggressively and how do I write such a clause in the contract?

[john]

I'm not a lawyer and my advice is without prejudice, and is used entirely at your own risk

Hopefully, you guys may be able to help me with this.

An independent record label has expressed interest in my music. The way I have done it with other indie labels has been to issue them a mechanical license to press, distribute and sell my music(usually in the form of a four-song ep)in exchange for a fee. For a five year period they can do with the tracks as they please.

Nice one.

This label however, wants perpetual ownership of the tracks. Has anyone ever heard of this?

yeah, but it is more normal for a largish or major label to write this in

Company shall have the exclusive, perpetual and worldwide ownership of the Masters

and all records manufactured therefrom.

I take it as meaning ongoing, lifetime, infinite. Correct?

Ongoing yes, but infinite (as far as I am aware) also requires the use of the term "irrevokable". Bear in mind, this is not perpetual ownership of the song, but the version they have on the masters you make for them.

Instead of a "fee" they want to give me an "advance" which is 100% recoupable from the royalties. In other words, if my record doesn't sell enough for the company to recoup the advance money they gave me upfront, I will owe the company the remainder. Is this correct?

Depends on the terms of the recoupment. It's an important area to clarify. You need to stipulate that it can only be recouped from royalties. You need to ensure the scope of the recoupment is limited. Still, this is common with an advance/royalty based contract.

And this one is quite scary.

INDEMNIFICATION: Artist agrees to indemnify Company against, and hold Company harmless from, any and all claims, liabilities, causes of action, damages, reasonable expenses, costs of defense (including reasonable attorneys' fees and court costs) and other costs arising out of or in any way related to any breach or claimed breach of any representation, warranty or agreement by Artist contained in this Agreement. Artist agrees that Company may withhold sums otherwise due to Artist hereunder in amounts reasonably related to such claim(s) until such time as such claim(s) are reduced to a final judgment by a court of competent jurisdiction or are settled.

Any one her knowledgeable on any of this? Damn ASCAP couldn't even help me and I'm too broke for a lawyer.

The first part is reasonably standard, and is intended to ensure that the artist hasn't ripped someone off and plagiarised a song by making the artist take on not just their own liability for being sued, but also the record companys'. The last line is more scarey. It has caught out many artists, especially in the 60s. Several Motown etc artists are still waiting for money due to some dispute over who wrote what. i.e., if it is in dispute, you are not paid. The record company sits on the money. Personally I don't see how they can get you to take on all the risk, while they keep the money, and the interest.

And how can I be assured that my record will be promoted and pushed aggressively and how do I write such a clause in the contract?

You need to set targets/goals that the record company has to meet, and get them written into the contract. Other than that you need to maintain good relations with your label, and they with you.

Lastly I would ask, does it mention anything regarding artistic control, or goals for you the artist?

Cheers

John

[Nightwolf]

Good points John

[avtoys]

I'm not a lawyer and my advice is without prejudice, and is used entirely at your own risk

Nice one.

yeah, but it is more normal for a largish or major label to write this in

Ongoing yes, but infinite (as far as I am aware) also requires the use of the term "irrevokable". Bear in mind, this is not perpetual ownership of the song, but the version they have on the masters you make for them.

Depends on the terms of the recoupment. It's an important area to clarify. You need to stipulate that it can only be recouped from royalties. You need to ensure the scope of the recoupment is limited. Still, this is common with an advance/royalty based contract.

The first part is reasonably standard, and is intended to ensure that the artist hasn't ripped someone off and plagiarised a song by making the artist take on not just their own liability for being sued, but also the record companys'. The last line is more scarey. It has caught out many artists, especially in the 60s. Several Motown etc artists are still waiting for money due to some dispute over who wrote what. i.e., if it is in dispute, you are not paid. The record company sits on the money. Personally I don't see how they can get you to take on all the risk, while they keep the money, and the interest.

You need to set targets/goals that the record company has to meet, and get them written into the contract. Other than that you need to maintain good relations with your label, and they with you.

Lastly I would ask, does it mention anything regarding artistic control, or goals for you the artist?

Cheers

John

omg! wOW john, only about an hour into this forum and you have answered my questions so well. Let me ask you though, why should I stipulate and make sure it's only recoupable from royalties? what other sources of revenue should I be weary of them recouping from and why?

sorry, may sound silly to you but it's the most complicated contract I've ever been through.

So the perpetual ownership is not perpetual ownership of the tracks themselves but the perpetual ownership of the actual sound recording? I don't understand that. Can I still release any of those individual tracks on another label, just not all those tracks together on another label? Kinda confused on that one.

And this is Royalties section of the contract, is this fine? Am I being shortchanged out of royalties from anything sold internationally? See "c."

4. ROYALTIES:

a. In consideration of the rights granted hereunder, pursuant to which Company causes

Records, LPs and/or EPs to be manufactured, Company agrees to credit to Artist’s

account a Royalty ("all-in", inclusive of Artist producers and any other royalty

participants) in an amount equal to fifty percent (50%) of the Net Profits, as defined

hereinbelow, derived from the exploitation of the rights granted to, and exercised by,

Company hereunder.

b. Company shall have the right to maintain reasonable reserves against anticipated

returns of Records sold under this agreement, and to distribute a reasonable number of

Records as promotional copies.

c. The term Net Profits as used herein shall mean one hundred percent (100%) of all nonrefundable

monies actually earned and received by Company in the United States

directly from the distribution of the Masters, remaining after the deduction, off-the-top,

of all costs associated with such distribution, including, but not limited to the following:

i. all copyright payments and other per unit payments associated with the distribution

of Records;

ii. all manufacturing costs, including preparation of all artwork and packaging and

promotional materials;

iii. the Advance;

iv. all amounts expended by Company pursuant to Company’s recording, producing,

publicizing, promoting, marketing, selling, licensing, leasing, distributing or other

exploitation of the Record, and;

v. all costs associated with the collection of sums due Company.

d. Net Sales shall mean gross sales less returns, credits and reserves against anticipated

returns.

Thanks a heap John! I know I should be paying you for this info.

[Nightwolf]

I don't know nearly as much as John, but it sounds like the "net" is whatever they want it to be, and you only get half of that? Like John said, they are setting aside moneys for "publicizing, promoting, marketing, selling, licensing, leasing, distributing" perhaps an outline of just what that includes.

All advice is of course free discussion amongst Friends and I'm sure John would not mention it, but if you find you like the forum and would like to help it along a bit there is a pay pal donation button at the top of the forum page. Only mentioned cause you mentioned it.

[avtoys]

I don't know nearly as much as John, but it sounds like the "net" is whatever they want it to be, and you only get half of that? Like John said, they are setting aside moneys for "publicizing, promoting, marketing, selling, licensing, leasing, distributing" perhaps an outline of just what that includes.

All advice is of course free discussion amongst Friends and I'm sure John would not mention it, but if you find you like the forum and would like to help it along a bit there is a pay pal donation button at the top of the forum page. Only mentioned cause you mentioned it.

If I could I would, I'm on the Ramen and PBJ diet now.

[john]

No problem

To be honest, royalties only is not as important as only from monies earned via the various income streams directly governed by this contract. So if you get a part time job (which is a problem in a different way), or you own a house etc. they can't recoup from that. I know of a UK artist who used his £70k publishing advance to put the deposit down for purchasing his house. 3 years later after his 3rd album, left him in debt he had to sell his house to payback the recouperable monies.

Fundamentally what we are talking about is ringfencing your personal assets, and future incomes. So one aspect of recouperables is that their claim ends with the trems of the contract. For example, if they have a claim on future earnings it effectively means that future labels etc may have to "buy" them out, or they will simply take future advances to recoup their losses.

Record labels deal (generally) with ownership of recordings, and rights on those recordings. Publishing companies tend to deal in the ownership of songs (even if that is time limited. Record companies main income is mechanical royalties, i.e. from the sale of CDs. Other income streams for a label include synchronisation rights for video/tv performance, though this can also be dealt with by the publishing company. You need to examine the contract closely from this perspective plus rights to income from merchandise. One common thing is that the label will try and get the artist to agree to foot all the cost of video production (which will be upwards of $70k) while they get a healthy share of the profit split with you, plus you are bound to do it with the companies (friends and companies they own or have a share in).

In terms of whether you can release other versions of the songs, I doubt it. Theoretically you could, however my bet is that they have the term "exclusive" in their regarding both the version of the song, and the songs themselves. For example "exclusive use of all songs, music, writing and other creative outputs of ... blah blah.. during the period governed by this contract" Also beware of any overlaps/overhangs like you are tied to them past the point where you can actually benefit from the contract.

It is possible to release songs through someone else, but it is dependent on the terms of the contract. The most common way is where the rights are restricted to a region. For example the North American Region, the European Region. You may have a deal with both. Where this is now complicated is the internet which obviously has a worldwide distribution capability.

One thing I noticed was that they are asking for exclusive worldwide right on the recordings (you don't mention if they have an exclusiviity clause regarding your creative output), yet they consider net profit to be 100% of monies earned in the USA. What happens to royalties earned from the broader "worldwide" rights? Industry standard for this is 50%. However, for various reasons, it can be more lucrative for you to be able to sign up with different labels in deifferent regions. Also means you aren't puting all your eggs in one basket.

The term "reasonable reserves" hides a multitude of sins.

I'd also be wary of "... all costs associated with the collection of sums due Company."

Also, importantly it doesn't mention downloads.

Be aware, the principle (from their perspective) is that you (contractually) take on as much risk as possible, while restricting your rights and reducing your profitability from various income streams. As I say, artistic control is a biggie too.

Much of a record contract is to the disadvantage of the artist, in exchange for the access to a large budget, a team of people who work on specialised tasks and contacts or media "weight". It's the price you pay if you want access to that. The trick is to allow you as much freedom as possible, with as little risk, and as much profitability as possible while at the same time leaving enough benefits to keep the label motivated enough throughout the terms of the contract. If you are tooawkward before they won't sign you. If you are too awkward afterwards (because you signed away right you didn't even realise) then they'll shelf you, especially if there are no contractual penalties to them. Depending on the freedoms you give away it is all to easy to find that you are no longer A or even B list for them, yet tied in a way that means you cannot release other material, work with other artists etc. In that circumstance, occasionally, just occasionally, another label may buy them out if they see you as a prospect, but by then you are a lready tainted goods.

I really would recommend that you get this looked over by a music lawyer. It might cost a couple of grand (depends on the deal, you may be able to pay the majority on completion of a successful deal from the advance for example) but it would be very worth it. The more the better. Have they set an acceptance deadline?

A couple more things. Be wary of openly discussing thespecific terms of the contract. That might be grounds for them to stop negotiation, or banked as a way out of an awkward contract for them in the future.

Lastly, one of the fringe benefits of using a known music lawyer is that they are on the grapevine. It's amazing, despite client confidentiality, how knowledge that a label is interested in a particular artist somehow disseminates through the industry when you start dealing with the lawyers. Weird . The point is, sometimes that "rumour" can pull in other labels to be interested in you. Almost "if they are interested in them, they might be worth checking out". That can start a bidding war and ups the value of your possible contract.

Hope this helps.

Cheers

John

[john]

Lazz will probably completely disagree with me

[Lazz]

Welcome to the music business.

Allow me to butt-in.

Remember that you are allowed (and expected) to question and negotiate.

So well done for being able to read.

(And no humour intended.)

An independent record label has expressed interest in my music.

What do you mean exactly ?

a) Do they want to record music that you have written ?

Do they want to release tracks that you have recorded ?

If they want to record music that you have written, then they can’t go anywhere or do anything without paying statutory mechanicals. And quite naturally they would own their own masters. Too right they would. But you still own the music. So they have to pay you for each pressing according to track length – exactly as the other ‘indie’ labels you dealt with should have done unless.you foolishly somehow allowed them to get away with something less.

If they want to release tracks that you have already recorded then it all turns on different principles because you would be supplying them with masters so they can do their marketing and distribution stuff with ‘em. That means that you are the clear and unquestionable owner of the masters and you should then be licensing specific rights of use to the company.

What you want in that case is a licensing agreement.

And what you definitely do need is a lawyer.

However broke you are, you can’t afford NOT to have one. Many guys in my personal experience would be willing to cut you a deal on their services in the hope of getting repeat business when you are making serious coin. Swings and roundabouts. Try and find one right now.

perpetual ownership …. anyone ever heard of this?

Of course. That’s what they all want: rights for everything, forever, for everywhere. Even ‘worldwide’ is now a little antiquated – in light of future extra-terrestral potential, many will now instead specify ‘the universe’– just in case some schmuck on a space station downloads your shit to an intergalactic iPod. This is perfectly normal industry practice.

… an "advance" which is 100% recoupable from the royalties. In other words …..

Is this correct?

This is correct – and also perfectly normal practice.

How else do you think record companies operate ?

Indemnification …

… is also normal: the company is just covering its ass in case of legal action. And why not ? You would be doing the same unless you suffered a severe attack of stupid. Unless you are indeed the very type of plagiaristic rip-off merchant they sensibly wish to protect themselves from, you have nothing to be scared of. At least they are not demanding you have expensive insurance coverage for any such liabilities.

Seeing that the royalty is 50/50 of net receipts – that makes it all the more likely and reasonable that what you should really be looking at is a licensing/distribution agreement for a fixed term with options based on performance and explicit rights reversion.

The company is looking to get the most they can (hopefully everything) but fully expecting you to come back with just this sort of alternative.

Reserves & Promo

Reserves held against returns is perfectly normal and reasonable.

But exactly what are ‘reasonable’ reserves ?

Get them to specify a percentage – maybe 25% - that sounds reasonable to me.

You also need reserves to be liquidated over a specified period.

Promotional copies/useage should also be specified – just as it is perfectly ‘reasonable’ for them not to be required to pay you on promo copies – it is perfectly ‘reasonable’ for you to need to know what promotion and where and when and how.

Net Profits

How long is a piece of string ?

At 50/50 it’s not so bad because expenses in effect get borne 50/50 also – fair enough.

But you have to watch the accounting closely.

“all costs associated with such distribution” sounds eminently fair and reasonable – but should it include sw*nky offices, sexy secretaries, and company limousines ? … maybe not unless they are reciprocally copping to 50% of your rent and phone bill.

i. all copyright payments and other per unit payments associated with the distribution

of Records;

Expecting you to pay yourself for your own copyright is completely out of order.

Strike that out.

ii. all manufacturing costs, including preparation of all artwork and packaging and

promotional materials

Bit of a piss-off. Makes one wonder exactly what it is they do for and with their 50% share. But again, this is perfectly normal practice.

iii the Advance

again – normal and fair enough. It is, after all, an advance against royalties.

iv. all amounts expended by Company pursuant to Company’s recording, producing,

publicizing, promoting, marketing, selling, licensing, leasing, distributing or other

exploitation of the Record.

If you are indeed supplying masters under license, then they have nothing to pay for in terms of recording and production – so there is no need for any reference to same – so strike it out.

Publicizing, promoting, marketing, selling, SUB-licensing, leasing, distributing and other

exploitation, on the other hand, is EXACTLY what their bit of the gig is all about. That is what they do. If you are supplying the masters, and ultimately being charged for manufacture and packaging, just what the f*ck do you need them for in the first place if it isn’t for exactly those services.

And hence your important question – the very proof of puddingness:

How can I be assured that my record will be promoted and pushed aggressively?

You can’t.

It’s what everyone wants, but there is absolutely no guarantee.

How do I write such a clause in the contract?

Apart from the usual regular ‘best endeavours’ bollocks (pretty meaningless in effect because it is without teeth), I figure the best you can do is agree some reasonable performance goals upon which the ‘term’ of the agreement and any options to renew are contingent.

Looking at things from the company’s position – they are the guys paying manufacture etcetera up front to get the recording effectively into the market place – so they are taking a big chance with an unknown and gambling that they can sell enough units to cover their investment. So that’s why they want the most they can get. Understandable. And if they do a good job, then they deserve it. But if they can’t do that inside a fixed term, they have no hope of achieving much more over an infinite period.

And that’s why they should be reasonably well disposed towards the persuasiveness of the points above.

Now – what do they have to say about digital rights?

Or about publishing?

If they are talking just bricks and mortar retail – especially in the current climate – and you can get ‘em to re-write in terms of licensing/distribution as above – then maybe you could do a lot worse than pocket the advance, work closely with them to exploit the product they have as much as possible, and still be free to piggy-back your own digital and publishing.

Looking at my meter – that’s worth about $300.

Thank you.

Good luck.

I can only comment on the bits you've shared with us - but I'll certainly take a look at the entirety if you want to send along a copy.

On second thoughts - send me a copy and your 'phone number - I get free calls, and being able to talk you through the clauses and their implications is going to be a lot less strenuous and demanding than writing a commentary.

If you want to pay me and the deal goes through - I'll do it for points.

I am real easy to get along with.

With respect to John's useful pointers - I have a couple of comments:

"Record companies main income is mechanical royalties, i.e. from the sale of CDs"

Wrong - mechanicals are fees paid to the composer/copyright-holder for recording/reproduction.

The record company pays mechanicals

"they consider net profit to be 100% of monies earned in the USA. What happens to royalties earned from the broader "worldwide" rights?"

The wording they use is one hundred percent (100%) of all nonrefundable

monies actually earned and received by Company in the United States

The company, evidently, lives in the US - the important bit is "actually earned and received".

All they are saying is that they aren't going to pay you out on income until they have received it - from wherever in the world.

It makes a lot of sense.

"I know of a UK artist ..... he had to sell his house to payback the recoupable"

Advances are recoupable against royalties and that's it.

It means you may end up never actually receiving any royalties and owing them money theoretically on paper.

But I know of no example where an artist has sacrificed personal property due to recoupables.

Sorry, John - sounds like bollocks to me - maybe an urban myth.

Would also be illegal.

Edited July 13, 2007 by Lazz

[Lazz]

Hey!!

How come the automatic censor on the board allows me to use the word "bollocks", yet I can't get away with saying the inoffensive "sw*nky"?

What does it do to "Scunthorpe"?

[Nightwolf]

Lazz will probably completely disagree with me

Wow, you are smart

[Lazz]

Wow, you are smart

He is.

And I am predictable.

[avtoys]

Welcome to the music business.

Allow me to butt-in.

Remember that you are allowed (and expected) to question and negotiate.

So well done for being able to read.

(And no humour intended.)

An independent record label has expressed interest in my music.

What do you mean exactly ?

a) Do they want to record music that you have written ?

Do they want to release tracks that you have recorded ?

If they want to record music that you have written, then they can’t go anywhere or do anything without paying statutory mechanicals. And quite naturally they would own their own masters. Too right they would. But you still own the music. So they have to pay you for each pressing according to track length – exactly as the other ‘indie’ labels you dealt with should have done unless.you foolishly somehow allowed them to get away with something less.

If they want to release tracks that you have already recorded then it all turns on different principles because you would be supplying them with masters so they can do their marketing and distribution stuff with ‘em. That means that you are the clear and unquestionable owner of the masters and you should then be licensing specific rights of use to the company.

What you want in that case is a licensing agreement.

And what you definitely do need is a lawyer.

However broke you are, you can’t afford NOT to have one. Many guys in my personal experience would be willing to cut you a deal on their services in the hope of getting repeat business when you are making serious coin. Swings and roundabouts. Try and find one right now.

perpetual ownership …. anyone ever heard of this?

Of course. That’s what they all want: rights for everything, forever, for everywhere. Even ‘worldwide’ is now a little antiquated – in light of future extra-terrestral potential, many will now instead specify ‘the universe’– just in case some schmuck on a space station downloads your shit to an intergalactic iPod. This is perfectly normal industry practice.

… an "advance" which is 100% recoupable from the royalties. In other words …..

Is this correct?

This is correct – and also perfectly normal practice.

How else do you think record companies operate ?

Indemnification …

… is also normal: the company is just covering its ass in case of legal action. And why not ? You would be doing the same unless you suffered a severe attack of stupid. Unless you are indeed the very type of plagiaristic rip-off merchant they sensibly wish to protect themselves from, you have nothing to be scared of. At least they are not demanding you have expensive insurance coverage for any such liabilities.

Seeing that the royalty is 50/50 of net receipts – that makes it all the more likely and reasonable that what you should really be looking at is a licensing/distribution agreement for a fixed term with options based on performance and explicit rights reversion.

The company is looking to get the most they can (hopefully everything) but fully expecting you to come back with just this sort of alternative.

Reserves & Promo

Reserves held against returns is perfectly normal and reasonable.

But exactly what are ‘reasonable’ reserves ?

Get them to specify a percentage – maybe 25% - that sounds reasonable to me.

You also need reserves to be liquidated over a specified period.

Promotional copies/useage should also be specified – just as it is perfectly ‘reasonable’ for them not to be required to pay you on promo copies – it is perfectly ‘reasonable’ for you to need to know what promotion and where and when and how.

Net Profits

How long is a piece of string ?

At 50/50 it’s not so bad because expenses in effect get borne 50/50 also – fair enough.

But you have to watch the accounting closely.

“all costs associated with such distribution” sounds eminently fair and reasonable – but should it include sw*nky offices, sexy secretaries, and company limousines ? … maybe not unless they are reciprocally copping to 50% of your rent and phone bill.

i. all copyright payments and other per unit payments associated with the distribution

of Records;

Expecting you to pay yourself for your own copyright is completely out of order.

Strike that out.

ii. all manufacturing costs, including preparation of all artwork and packaging and

promotional materials

Bit of a piss-off. Makes one wonder exactly what it is they do for and with their 50% share. But again, this is perfectly normal practice.

iii the Advance

again – normal and fair enough. It is, after all, an advance against royalties.

iv. all amounts expended by Company pursuant to Company’s recording, producing,

publicizing, promoting, marketing, selling, licensing, leasing, distributing or other

exploitation of the Record.

If you are indeed supplying masters under license, then they have nothing to pay for in terms of recording and production – so there is no need for any reference to same – so strike it out.

Publicizing, promoting, marketing, selling, SUB-licensing, leasing, distributing and other

exploitation, on the other hand, is EXACTLY what their bit of the gig is all about. That is what they do. If you are supplying the masters, and ultimately being charged for manufacture and packaging, just what the f*ck do you need them for in the first place if it isn’t for exactly those services.

And hence your important question – the very proof of puddingness:

How can I be assured that my record will be promoted and pushed aggressively?

You can’t.

It’s what everyone wants, but there is absolutely no guarantee.

How do I write such a clause in the contract?

Apart from the usual regular ‘best endeavours’ bollocks (pretty meaningless in effect because it is without teeth), I figure the best you can do is agree some reasonable performance goals upon which the ‘term’ of the agreement and any options to renew are contingent.

Looking at things from the company’s position – they are the guys paying manufacture etcetera up front to get the recording effectively into the market place – so they are taking a big chance with an unknown and gambling that they can sell enough units to cover their investment. So that’s why they want the most they can get. Understandable. And if they do a good job, then they deserve it. But if they can’t do that inside a fixed term, they have no hope of achieving much more over an infinite period.

And that’s why they should be reasonably well disposed towards the persuasiveness of the points above.

Now – what do they have to say about digital rights?

Or about publishing?

If they are talking just bricks and mortar retail – especially in the current climate – and you can get ‘em to re-write in terms of licensing/distribution as above – then maybe you could do a lot worse than pocket the advance, work closely with them to exploit the product they have as much as possible, and still be free to piggy-back your own digital and publishing.

Looking at my meter – that’s worth about $300.

Thank you.

Good luck.

I can only comment on the bits you've shared with us - but I'll certainly take a look at the entirety if you want to send along a copy.

On second thoughts - send me a copy and your 'phone number - I get free calls, and being able to talk you through the clauses and their implications is going to be a lot less strenuous and demanding than writing a commentary.

If you want to pay me and the deal goes through - I'll do it for points.

I am real easy to get along with.

With respect to John's useful pointers - I have a couple of comments:

"Record companies main income is mechanical royalties, i.e. from the sale of CDs"

Wrong - mechanicals are fees paid to the composer/copyright-holder for recording/reproduction.

The record company pays mechanicals

"they consider net profit to be 100% of monies earned in the USA. What happens to royalties earned from the broader "worldwide" rights?"

The wording they use is one hundred percent (100%) of all nonrefundable

monies actually earned and received by Company in the United States

The company, evidently, lives in the US - the important bit is "actually earned and received".

All they are saying is that they aren't going to pay you out on income until they have received it - from wherever in the world.

It makes a lot of sense.

"I know of a UK artist ..... he had to sell his house to payback the recoupable"

Advances are recoupable against royalties and that's it.

It means you may end up never actually receiving any royalties and owing them money theoretically on paper.

But I know of no example where an artist has sacrificed personal property due to recoupables.

Sorry, John - sounds like bollocks to me - maybe an urban myth.

Would also be illegal.

I really appreciate this. I need to print out what you said here and take it home b/c a lot of it goes over my head. Maybe after the seventh read I'll get it.

The Company wants to release the music I have already recorded on my own. They have the songs picked out, the order, the album title, all that. That is why I tried to propose a mechanical licensing agreement but they keep saying they want to bring me aboard. Like signing me for a one album deal I guess. This is a small label so they're not going to dump 10's of thousands in marketing me or anything. That is why some of the language in the contract seems strange to me. It's more like a major label contract, in which case I would get a $100,000 advance or whatever and that is very very far from the advance I'm getting. I will re-read what you wrote here and get back to you on Mon. No internet at home. Thanks again.

[Nightwolf]

He is.

And I am predictable.

I knew you were gonna say that

[john]

As ever I bow to your worldly wiselyness

On the mechanical royalties, you are of course quite right. Fair point on the worldwide/US rights too. On the last, I knew the guy and his manager. That's what I was toldn by them, separately. Of course they could just have made shit up to cover the real reason. Could the fact that he used the advance to buy it, or perhaps it was bought by his company rather than him personally, have been the reason?

I'm just glad Lazz only picked up 3 things, or at least thought 3 were worth commenting on. Not really my area, and I always ask Lazz to check my homework

[john]

I really appreciate this. I need to print out what you said here and take it home b/c a lot of it goes over my head. Maybe after the seventh read I'll get it.

The Company wants to release the music I have already recorded on my own. They have the songs picked out, the order, the album title, all that. That is why I tried to propose a mechanical licensing agreement but they keep saying they want to bring me aboard. Like signing me for a one album deal I guess. This is a small label so they're not going to dump 10's of thousands in marketing me or anything. That is why some of the language in the contract seems strange to me. It's more like a major label contract, in which case I would get a $100,000 advance or whatever and that is very very far from the advance I'm getting. I will re-read what you wrote here and get back to you on Mon. No internet at home. Thanks again.

If they are releasing YOUR recordings there is no way they should own the masters.

[Lazz]

That is why I tried to propose a mechanical licensing agreement

Absolutely no idea what you could possibly mean.

Please explain

[avtoys]

Absolutely no idea what you could possibly mean.

Please explain

Ok, In the style of music that I do, electro, it is very common for the artist to license the pertinent tracks to the label for a licensing fee. Then they can do as they wish for one term(usually 5 years) and not pay me any mech. royalties for the first pressing(usually 1000). After that you can negotiate a mechanical roaylty % for the next pressing if they wish to do so. I still make my performance/publishing royalties. Make sense?

This label doesn't want to do that. They want a recording agreement for this album, that is perpetual. Why would this be? They first had the term "work for hire" in there and I had them take that out. That's like if I worked for an agency and they hired me to do jingles all day long and the jingle is the property of the agency. Well now that isn't there, and I've written, produced and recorded the tracks myself, why could they want perpetual ownership of the masters. Perhaps b/c the masters sound different than my original unmastered tracks and that's what they're talking about?

[Lazz]

Make sense?

No - not really.

"In the style of music that I do, electro, it is very common for the artist to license the pertinent tracks"

What does the genre have to do with anything ?

A licensing deal does not automatically preclude mechanicals.

Mechanicals are statutory - why would you need to negotiate it after the first pressing ?

So I guess what you do is 'waive' the mechanicals. If, instead of calling it a "mechanical licensing agreement", you had called it a "NO-mechanical licensing agreement", then we would have had a clearer picture of what you were going on about.

"I still make my performance/publishing royalties."

With all due respect = that sounds remarkably optimistic:

It presumes that every place your tracks get heard pays their performance/broadcast license, and reports efficiently, and that the distributing organisation's formula is serving you well rather than Sir Paul McC.

Why would you give up your mechanicals?

That makes no sense at all.

But anyway - that's not what we're talking about in this case, is it?

"They want a recording agreement for this album, that is perpetual. Why would this be?"

Because they are operating according to principles of self-interest, and they consider they can get away with it.

Clearly - you are the ownert of your own masters.

So this should be a licensing/distribution deal.

But I said that before (did you notice?)

Uh-oh...... wait a minute.

You say you handed over tracks that were not masters ?

You gave 'em stuff and you don't even have an agreement yet ?

Oh gee ... this is making less sense the further we get into it.

I can hardly believe it.

What the blazes do you think you're doing ?

It's pretty obvious from your questions that you didn't read or comprehend what I took trouble to spell out previously.

Neither did you take me up on my kind offer to go through the issues with you over the 'phone.

I can offer no more comment when what's going on is kept so unclear .

No more free advice - it clearly has no value for you.

I am going to withdraw from this discussion right now.

[avtoys]

No - not really.

"In the style of music that I do, electro, it is very common for the artist to license the pertinent tracks"

What does the genre have to do with anything ?

A licensing deal does not automatically preclude mechanicals.

Mechanicals are statutory - why would you need to negotiate it after the first pressing ?

So I guess what you do is 'waive' the mechanicals. If, instead of calling it a "mechanical licensing agreement", you had called it a "NO-mechanical licensing agreement", then we would have had a clearer picture of what you were going on about.

"I still make my performance/publishing royalties."

With all due respect = that sounds remarkably optimistic:

It presumes that every place your tracks get heard pays their performance/broadcast license, and reports efficiently, and that the distributing organisation's formula is serving you well rather than Sir Paul McC.

Why would you give up your mechanicals?

That makes no sense at all.

But anyway - that's not what we're talking about in this case, is it?

"They want a recording agreement for this album, that is perpetual. Why would this be?"

Because they are operating according to principles of self-interest, and they consider they can get away with it.

Clearly - you are the ownert of your own masters.

So this should be a licensing/distribution deal.

But I said that before (did you notice?)

Uh-oh...... wait a minute.

You say you handed over tracks that were not masters ?

You gave 'em stuff and you don't even have an agreement yet ?

Oh gee ... this is making less sense the further we get into it.

I can hardly believe it.

What the blazes do you think you're doing ?

It's pretty obvious from your questions that you didn't read or comprehend what I took trouble to spell out previously.

Neither did you take me up on my kind offer to go through the issues with you over the 'phone.

I can offer no more comment when what's going on is kept so unclear .

No more free advice - it clearly has no value for you.

I am going to withdraw from this discussion right now.

Ok I'm not going to quote each individual question you have here, I will just try to sum it all up.

Yes, you are right, the genre has nothing to do with the particular license, but in this specific genre, it is the most widely seen agreement between an artist and a label, since electro artists make their music primarily in their own recording studio. So, the label isn't paying for studio and production costs but they are paying for the vinyl manufacturing costs and promotion. In exchange for this, the artist will collect an upfront fee and waive their mechanical rights for 5 years. It is called a "Mechanical License Agreement", I didn't make it up. If it helps you to understand it as a "No-Mechanical License Agreement" then so be it.

I don't presume to be Sir Paul. I have collected performance royalties in the past from ASCAP for some radio station playing my music up in Ireland from a previous UK release of mine. Not much else really, so I'm not naive enough to think I can make huge sums of money from performance royalties at this stage of my career. The reason the artist waives his mechanical rights for 5 years is for the upfront fee.

But like you said, that is not the case here, that's why I had to come and post on this board b/c I am unfamiliar with the different type of contract I'm dealing with now. I simply mentioned it as "this is what I'm used to", not much else.

After you said all of this you took a different tone in your post. With rhetorical questions like "did I even bother to read?" and all that. Listen, I don't know you or anyone else on this board, but I came here with nothing but a respectful and appreciative attitude. I didn't call you up for help, like you kindly offered, because not only did I have a big show during the weekend and was extremely busy, but I will not call someone for help when they mention something like "If you want to pay me and the deal goes through - I'll do it for points." I'm not going to lead anyone on as believing I'll be able to hook them up with something b/c I am SMALL TIME. Really small time. I'm not expecting to make 10's of thousands of dollars for this.

When you say "no more free advice, it clearly has no value for you" you are way off the mark. The things you mentioned in your first post helped me a great deal when finalizing the contract with the label yesterday. You definitely cleared up a lot of things in the contract for me, it's unfortunate you took a demeaning tone at the end of your last post and withdrew from the discussion, b/c you were being of much help, despite your belief that I didn't read what you said. Peace.