Okay, so the exclusive recording contract. The thing most musicians dream and strive for. So well done, you are now presented with one. It is important not to get carried away. First off, THE RECORD COMPANY IS NOT THE ENEMY, so approach with caution not angry scepticism. You need to take a deep breath and consider what all that legal jargon is trying to say. I mean, your music is your baby; you want it taken care of.

So what is a recording contract?

In simple terms, it is a legal agreement between the recording artist and recording label whereby the label is given the right to promote and sell the contracted record or records. What an artist needs to be aware of is the number of different, additional conditions attached to this arrangement.

Rights & Exclusivity: This is the important one people. The term ‘sole and exclusive’ will pop up throughout the contract regarding the many rights to do with you and your music. The areas covered will include:

(a) The artist will be bound to the label for a specified period to produce an album (or single or EP.) as well as be forbidden from working with other labels.
(b) The label will exclusively own the copyright to those songs for the duration of copyright (or an agreed shorter period –often called ‘Rights Period’). Label will also prevent artist from rerecording those songs for a certain time.
(c) The label will also have the ‘sole and exclusive’ right to exploit that product in any media, to grant licenses for compilations, synchronisation and other profit making ventures.

So, what to look out for regarding all this stuff:

Firstly, some clauses may state they do not require your Prior Approval for certain ventures, such as the choice of promotional photos, or in issuing of licences for your recording. This can raise problems, as you may not want your song to feature on an ad for nuclear power (due to moral/ethical reasons) or that photo in which you looked ‘fat’ and you want them to ask you before publishing it.

You can ask to change certain clauses to require your permission for use; this should be clearly outlined in the contract to prevent headaches in the future.

Secondly, the music exploitation section of the contract will often make reference to Moral Rights. These moral rights protect the musician(s) reputation by guaranteeing them:
(a) identification as the author of that music and
(b) the right to object to the derogatory treatment of that work, to preserves it’s integrity against alteration and distortion,(you know, when musicians cry “that’s not my song, what did you do to it!”).

There are parts of recording contracts which will say that you waive these rights. You can ask them to change this in the contract, so you have a say in regards to what they may do to the Masters in the future, thereby maintaining some control.

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Nowadays you can get instant access to almost any piece of information you require by simply typing a few words into a search engine. You will not be surprised that you can even download free music contracts (read more about here: why you should avoid free contracts). Everything from manager’s contracts to band agreements, to publishing licenses can be found online, filled in and given to artists to sign. Artists are happy to sign away their rights and let the label take control of the promoting, bookings and content pitching as this leaves them with all the time in the world to do what they really want to be doing, which is writing music and/or performing it.

The problem is, the industry is full of horror stories about contracts gone awry and this not only happens to bands that are just starting out. Some of the biggest names in the industry have fallen foul of a bad contract. You have to take this seriously, and you have to get some advice, real advice, not the sort you get from your mates or the drummer’s mum.

So let’s look at some things you need to pay attention to when looking to appoint a manager.

Your manager needs more than just enthusiasm. Enthusiasm is a good thing, but experience is more important in the greater scheme of things. A good friend does not always make a good manager, but someone who is willing to spend their resources promoting your music and has real ready-to-run contacts waiting to let you play, is way more important to you in the long run than that guy you went to school with and who did a business course in college.

Track record is important in a manager as well. What have they done before? Who have they managed? Who are they managing now and how is that going? And don’t just take the manager’s word for it, talk to some of the clients he or she is managing already. Would they recommend this person as a manager for you? Remember, your relationship with your manager is as important as your relationship with your band mates and, I would dare to say, family members and life-partners!. You both need to understand each other’s little foibles and know if it’s all right to call at two in the morning when you are lost in that deep dark place you sometimes fall into.

So, that’s the manager. What about the contract?

If you are a new artist, the artist management contract is the most important contract you will ever sign. For the first time, you will allow another person to represent you and your music and negotiate any subsequent contracts so a bad decision taken while choosing your first manager will definitely affect your career prospectus.

When you are presented with the management contract, get some real legal advice – and not from the manager’s lawyer, you want impartial advice. The contract should agree the manager’s commission which should be between 15-25% of gross income, that is all the money you earn before tax. Commissions from tour and merchandise should be based on net income after you have paid all related expenses, which are often high.

There are some items, however, that should not be included in the managers commission and the contract needs to spelt this out. Things like the costs for making videos and recordings and any contributions towards touring costs should be deducted before the commission is calculated. In the early days, earnings from touring are going to be fairly hit and miss so you will not want to pay your manager a commission, for example, if the tour makes a loss.

A good lawyer will charge you money to advise you on this, but trust me, it will be money well spent. If you are looking for affordable fees, there are services like Avenant Law, which can be useful for saving on legal fees without compromising the quality of the work.

Also, make sure that the contract has what is known as an initial (or trial) period clause. This should be about six months and is there to allow you both to make sure the relationship is going to work. You are the boss, though, so include goals that your manager should be able to achieve in the time period, including an expected earnings figures. There also needs to be an incentive for the manager if the goals are achieved, after all, we all need some motivation every now and then, don’t we?

Finally, as we are in the twenty-first century, you need to make sure your management contract covers all the online aspects of your band. Your manager should be organising your Facebook page, posting tweets on your behalf, putting teasers out on Soundcloud and YouTube, managing your website… in fact they should be actively marketing your music online and on your behalf. Of course, they should also be as active at marketing you through traditional channels as well.

‘Sampling’ in musical terms is taking a piece of another artist’ work and using it in your own song. It applies to both the recording and the composition embedded in the recording, so you cannot use either without the express permission of the original copyright holder (In most cases this is the record label and publisher). Unless a licence is granted for the use of the sampled artist’ work, it is considered and infringement of copyright and you will get into major trouble and even get legal action brought against you if you use anyone’s work without considering the fact that they own the original body of work.

When approaching a Record label or Publisher to obtain a clearance, give information about your planned releases e.g. label the song will be released on and how many copies will be pressed. Record company or publisher may say yes; ultimate decision is sometimes up to the musicians if they have reserved the right to approve usages. The buck can easily stop here, as the owner is entitled to refuse permission on any grounds. The artist can also refuse under Moral Rights legislation, which protects the moral integrity of the work in question.

So let’s say it all goes ahead, and you get permission to use the sample. The next step will be negotiating a fee. This can range from a straight up fee, to royalties and credit, to (if the owner is feeling particularly generous) credit alone.

A small record company may want a flat fee, known as a ‘buy-out’. If you’ve sampled a relatively unknown tune and it’s quite a short release you might end up paying just around £500 but they may build in a condition that another fee is payable if you want to press more records. If sampling from a large label artist, they may want a royalty – usually 1 to 3 per cent. They’ll probably want an advance against that which for a major artist may be several thousand pounds. You may be able to reduce the royalty by paying a larger advance or reduce the advance by offering a larger royalty.

Publishing companies will typically want a royalty but not an advance. For light usage of a minor artist this can be less than 10%. For a larger artist it may be 50% or more.

If your song uses the sample as its backbone, you’re in a bit of a weak bargaining position, as you can imagine. Depending on how famous the original artist is, the more they are likely to demand higher royalties and fees. Be aware of this; that some major artists can demand up to 50% of the royalties made from a song.

The royalties for samples will be deducted from your record sales share of royalties and publishing royalties. You may also have to give up some of your Performer’s Royalties to the people who performed on the record you sampled.

Keep in mind that you cannot clear the underlying composition in a sample by re-recording the sample. If you choose to re-create the use, you still need the publishing clearance. Altering the sample (even to the point of making it unrecognisable) does not get you out of clearing it.

You may be surprised to learn that copyright does indeed have a shelf life. The life of copyright in a recording the UK is 70 years from the date of release, so anything within that period has to be cleared and discussed with the owners or administrators of the music. For compositions, copyright lasts for 70 years from the death of the author (or last remaining author in the case of jointly written work). For unknown authored work, it is 70 years from the end of the calendar year in which the work was created (not from when it was released).

Do not proceed with use until you have obtained clearance in writing from all copyright owners concerned and all clearance terms and conditions agreed. If your request to clear a sample is denied you must remove the sample from your work. To proceed without all necessary clearances in place, even if you cannot find the copyright owner, may well result in action being taken against you for breach of copyright.

Pre-made sample clearance agreements to approach publishers and record labels can be found here. Paying a small fee for these contract outlines saves you doing a lot of the hard work and research yourself. Make a note of how many pressings you are going to make of your CD, and which label your song will be released. Try and gather as much information as possible before you meet to discuss the use of samples in your song.

Image Credit: Jesse Kunerth

As an artist, dealing with the legalities of the music business may seem uninteresting and time wasting, but getting it right from the start is absolutely essential if you want to avoid complications further down the line. Here are six pieces of advice from professional music lawyers to developing artists.

1. Network and establish the splits between all writers

“Always introduce yourself to as many people as possible. The more you know the better you will be. Do not burn bridges, because you will learn this industry is a lot smaller than you think!

Make sure that you have an agreement in place which establishes the royalty splits between all writers of a particular composition. This is true even if you are best friends, and can literally be done a piece of tissue signed by everyone. Trust me this will help in preventing any problems that may arise in the future once you become rich and famous!”
Donald Glista, Universal Music

2. Find a good lawyer and trust them – even if you disagree with them

“It is important that you have a grasp of the basics of law but you need to be careful of thinking that you know more than you do. I receive numerous enquiries from artists who have read a couple of articles online, or even a book, and then simply phoned round lawyers until they find someone who will say what the artist wants, whether it is right or wrong.

You need to trust your lawyer and the advice that they give you. When looking for the lawyer you want to work with: (1) ask who they have worked with and get recommendations to ensure they actually have appropriate experience; and (2) stick with them – don’t jump ship just because they won’t play puppet.”
Ben Evans, Solicitor, Blake Lapthorn

3. Get legal advice from the early stages

“The music industry is a money-making industry – and as such, you need to protect yourself and make sure you have agreements in place that clarify who owns what and what is due to you.

It is important to get legal advice from the early stages: clarify the relationship between the members of a band and make sure you know, for example, what will happen if one of the members decides to leave the group.

Find a good lawyer who is willing to explain to you the consequences of your decisions; getting the legal frame right doesn’t mean getting ready for a fight against the other party; it only means you’ll create a solid ground to avoid future problems and protect your most valuable asset: your creativity.”
Loredana Cacciotti, Ministry of Sound

4. Always think of the long game

“Always think of the long game and make considered and informed decisions early on in your career. Too many artists, in their desire to get their “big break”, will hastily enter into agreements that can adversely impact them later on in their careers. Ensure you understand what people are asking of you – make sure you know exactly what you are entering into and with whom.

Know and understand what you’re getting out of the deal and most importantly what’s required of you and what you’re giving up in way of rights and for how long. Ideally consult with your lawyer and/or manager but if you are a young unrepresented band, ask colleagues and other more experienced bands, research, chat to music industry people and generally harass people for help. The earlier you treat your musical career as a business and make informed decisions the better.
Marcus Walkom, Media Arts Lawyers Australia

5. You can’t measure commitment to a clause

“People working in the music industry are often fixated on having a written legal agreement in place. Nothing in a written agreement will make things happen if motivation, energy and enthusiasm aren’t there. You can’t measure commitment to a clause neither quantify nor qualify perseverance.

Meet the party you are so eager to do business with and discuss the way you want to work. Create a vibe and feeling of trust and then, and only then, use a contract to summarise what has been agreed.”
Juan Lopez, Avenant Law & MusicLawContracts.com

6. There will always be another offer

“It’s difficult sometimes to have confidence in your value but really if one manager or company are offering a contract then it’s unlikely that they will be the only one to do so. I guess what I’m saying is don’t sign a contract that’s wrong for you. Negotiate better terms or wait for another offer – you can!

The offer is being made on the basis of an informed calculation that money can be made from your talent! Others will draw the same conclusion. You have something unique and valuable that’s worth more than just money so make sure your lawyer, manager and record label have an incentive to nurture your work and that they have a genuine interest in what you do. Good relationships can avoid costly litigation.
Stephen Meachem, Solicitor

Whatever genre of music an indie record label specialises in there are legal contracts to be put in place. From ska and reggae to dub step and trance, a sound legal basis for record label owners, producers, musicians and writers cannot be ignored. Far too often small scale musical projects come to grief before they reach their potential because of the lack of awareness surrounding legal contracts. Nevertheless, help is at hand and there’s no excuse to step into the business side of music without proper advice. And once you have the contracts sorted out, it is time to get back to the fun – making and promoting the music.

So what is a recording contract?
In simple terms, it is a legal agreement between the recording artist and recording label whereby the label is given the right to promote and sell the contracted record or records. What an artist needs to be aware of is the number of different, additional conditions attached to this arrangement:

Rights & Exclusivity: The term ‘sole and exclusive’ will pop up throughout the contract regarding the many rights to do with the music. The areas covered will include:

(a) The artist will be bound to the label for a specified period to produce an album (or single or EP.) as well as be forbidden from working with other labels.
(b) The label will exclusively own the copyright to those songs for the duration of copyright (or an agreed shorter period –often called ‘Rights Period’). Label will also prevent artist from rerecording those songs for a certain time.
(c) The label will also have the ‘sole and exclusive’ right to exploit that product in any media, to grant licenses for compilations, synchronisation and other profit making ventures.

Moral Rights: the music exploitation section of the contract will often make reference to moral rights which protect the musician(s) reputation by guaranteeing them:
(a) identification as the author of that music and
(b) the right to object to the derogatory treatment of that work, to preserves it’s integrity against alteration and distortion,.

There are parts of recording contracts which will say that you waive these rights. Artist can ask them to change this in the contract, so they have a say in regards to what they may do to the music in the future, thereby maintaining some control.

The Term: Time periods and deadlines are crucial when addressing the commitments from both the artist and label. It is a two-way street and some key points are as follows:

(a) The Release Commitment: This outlines how the label has to exploit and make public the recording commitment produced by the musician(s) within a certain time periods. This is laid out to prevent the label from simply shelving the recordings. The territory specifications are important here, the label may only be required to promote in a particular territory (UK, USA, Australia, etc) in which case you should be able to have another label releasing your music in other territories not covered by the agreement.
(b) The Recording commitment: This will specify how and when the songs need to be presented to the label, e.g. 6 months from the date of the agreement. It will usually also state how many songs, the quality of the recording expected and the total playing time required to fulfil the commitment. An example being an EP of 3 to 8 songs equating to 23- 25 minutes playing time.

The artist needs to be VERY aware of the full length of time they will be bound to a label, especially at the prospect of it all not working out. The contract will usually specify an initial period of say around 12 months that artist is committed to the label which may include the time needed to deliver the recording commitment plus a certain period of time from the release for promotion what-have-you.

It all seems straight forward up until now, but what about this ‘Option to Extend’ thing?

An Option is a legal term that gives the label the irrevocable right but not the obligation to extend the recording contract for successive periods usually with a new recording commitment imposed on artist. For example, the Initial Period may have required an EP to be produced of a certain length with a certain amount of songs. If the option to extend the contract is exercised then a new requirement of say an album of 14 songs with a playing time of a minimum of 45 minutes to be made within this a certain period, for example 6 month period after the exercise of the option.

It is important to note then that if the record company decides to exercise them under the contract, artist is bound to abide by the new terms. If label doesn’t think a subsequent album artist make will have enough success to guarantee the investment, guest what, artist is dropped. It may seem harsh, but the label needs to be able to better guarantee their return from their commitment the artist. There is usually more than one option period outlined in the contract, such as ‘First Option Period’ then ‘Second Option Period’ usually up until 4-5 Option periods; each with an additional recording commitment.

Royalties come from either Net Receipts from the exploitation of the recordings or a percentage of the price the records are sold to dealers (i.e. distributors). Now, the amounts the label and the artist will receive will vary according to the way in which the recordings have been exploited to make a profit and the percentages agreed between parties. On a Net receipts type of deal, the label and artist will usually get a fairly even split regarding the actual sale of the albums or EP, usually 50/50. For other ventures, such as synchronisation licenses and printed sheets of music, the proportion of profits will usually be higher for bands, around 70% of the Net Receipts.

The basis of this split is that the label has invested their time and effort into making the recording itself, its production, distribution etc. The synchronisation deals rely more heavily on the talent of the artist themselves and final product, which impresses the third party licensee.

If a band receives an Advance before the recording is made, you may be able to afford Tesco finest sausages but it ain’t free money. It’s an advance on future earnings! Additionally, and this is when reading the document is very important, Budgetary Expenses provided by the record company for promotion and other things may be due back to the label. In both instances, this money is effectively owed to the label and will need to be earned back through net receipts until paid in full at which time the artist will start to receive the royalties.

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To musicians, music is all about creativity, expression and the enjoyment of the audience- for many it’s also a livelihood. In order to protect that income and the rights to their music, most musicians have to sign contracts with labels; said contracts establish the terms in which rights are assigned or licensed, assure royalties for their work and protect them from piracy.

There are a huge number of new music companies out there, and many of those companies are going to need contracts. This has resulted in a large online market for music contracts, including a number of free contracts intended to allow new music ventures on a budget to exploit the copyright of musicians. Whilst this may sound great at first, there are important reasons why these free contracts are a bad idea.

A recording contract is a complex document, covering a lot of points, including the duration of the contract, the number of albums and singles covered (down to the specific length of the songs), the percentage of any profit that the label and the musician receive, the specific territory in which the contract applies and a host of other details. In many of these free contracts, these details may be pre-filled and not correspond to an acceptable standard, the files may not be editable (preventing modification of the contract for a specific artist’s needs) and many of the contracts may not actually hold up in court.

Depending on the territory an artist is from, local laws may differ and details of the contracts will have to be specifically tailored to the requirements of the area it’s designed for. Without a lawyer experienced in this sort of contract, a free recording contract may not protect an artist in the location they need it to.

Various other details (such the percentage of profits the artist should received) may vary overtime, as standards in the industry change depending on changes in supply and demand, piracy and new formats. These details are often not explained in free contracts, making it difficult or even impossible for a person who is not well versed in music law to decipher and tailor to their needs.

Any label who wants to form a contract with an artist will have innumerable details which will require consideration and inclusion. These include advance payments to the artist, spending of profits on promotion and other costs such as packaging of albums and equipment for the artist. Details for auditing a label’s accounts, ‘acceptance and delivery’ clauses which specify the format and quality of the music the label expects to receive and arranging first refusal for the label on future albums or licensing for the use of tracks in other media.

Given the number of variables and bases that need to be covered on licensing contracts, and how important such a document can be to the fortunes of both artist and label, buying a high-quality, editable contract (such as one from href=”http://www.musiclawcontracts.com/”>Music Law Contracts) or writing one up from scratch in conjunction with an experienced lawyer may be far wiser than editing a free one to your needs.

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Music is life; music is soul. There is not a soul who denies its love for music. While people’s affinity towards different forms of music may be varied, the joy and excitement that music renders to an individual remains the same. Any musician who brings out the feel and sense of music out of any person is truly gifted. There is a great abundance of music writers and musicians with great talent in different genres of music. However, the bitter truth is that not every one of them gets the right opportunity to be in the music business, or to be able to sell there music while protecting it from piracy and innapropriate exploitation at the same time.

It is utterly essential that you or your client (if you are a lawyer) have an understanding of the various aspects and risks involved in buying a music contract online. Many a times a few words tossed here and there out of alignment and in the wrong order can change the meaning and make you vulnerable to be taken advantage of. Taking all into consideration, having a proper music contract is probably the most important tool for musicians to protect their copyrights, and those sweet tunes and notes they cherish the most.

If you are planning on buying music contracts for your music, or if you want to suggest it to your clients, here are a few tips that will help to choose the right one.

1. Talk to your lawyer

It is important that you talk to your attorney and see what kind of contract would suit your situation. There are a large variety of contracts for almost every type of music venture. Some are for song writers, music producers, record labels, publishers and so on. Each of them has their own sub types; they can be exclusive, non-exclusive contracts, for extended periods of time or for a particular songs for a couple of years only, etc. Therefore, it is essential to discuss with your legal representative as to what are the various types of contracts and which one you need to choose.

2. Don’t buy a contract that is outdated

It is as simple as it sounds, legislation and trends in the music industry vary rapidly; therefore make sure you use a contract that is aligned to what is current.

3. Check and make sure that the contract applies to your country/ province/ territory

This is called ‘jurisdicion’and ideally, this should be the place you reside so the contract is based on local laws and you can access the courts, should you need.

4. Make sure the contract has explanatory comments

If you are someone who doesn’t really understand music law, it would be best if you assure that the contracts are explained. This gives you a better understanding of the clauses and a firmer grip over the terms in it.

5. Make sure that your attorney has reviewed your contract before using it

The legal complications and implications are some of the matters that a lawyer will be very familiar with. He/she will be able to explain to you the intricate details about the various sections and clauses of a contract. Make sure you have your lawyer reading through the many details on your music contract before you actually sign the deal.

6. Make sure that the contract is editable

Ensure that it is given to you in a word document or other editable format so that you can edit the clauses to your requirement at a later date. Several companies provide music contracts to suit your many unique needs in an editable Microsoft Word version.

7. Make it a point to set percentages

Before finishing formalities, make sure that you decide how much percentage of the overall profit you must be receiving and that those percentages are within a standard used in the music industry. Most music companies have a set percentage for different levels and different genres of music. However, some may be open to discuss and negotiate.

These are just a few points to keep in mind before, while and after buying and signing a music contract, as the slightest mistake can cause the most dreaded consequences. So, make sure that you are careful about all parts of it, and also it is important to talk to your legal representative before making the plunge.

For better and safer solutions, it is recommended that you visit www.MusicLawContracts.com to find the contracts which suit you the best.

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