The Term and Options
The length of this term is for 2 full-length albums with the option after the first,
with the exclusive option to a third, the term begins March 10 2015. This
means that the artist will be responsible for creating at least two records, after
the first album the Company will decide if they would like you to make a
second album; referred to as options. If the Company chooses to do the
second album, they can request a third album. Each album is will contain at
least 12 full length songs, all masters recorded during this term will be owned
by the Company. In summary the term begins March 10 2015 and ends with
the completion of or up to 3 full-length albums.
The Masters
Exclusively the Company will own the masters of all materials recorded during
the term. Under Canadian copyright law all material recorded under this term will
be deemed “work for hire” meaning that the Company has paid for works created
by artist during this term in accordance to the Berne. By owning the masters the
Company has the right to “manufacture, advertise, sell, distribute, lease, license,
or otherwise use or dispose of the Masters” as well as “use and publish the
preapproved name likeness, images, photographs, voice and biographical
material of artist” In short the Company can sell you and your image any which
way they please.
The company can also “release any derivative version of any one or more of the
Masters on any medium or device known or hereafter invented, Under any name,
trademark or label, Company and its Licensees so choose” meaning that what
ever format may be invented the Company reserves the right to release your
material.
Royalty Rate and The Bling
A royalty rate simply means the portion of monies that the artist receives from
works sold after all other monies collected. The other term used in this contract is
PPD; which stands for Published Price to Dealer. PPD is the negotiated price a
distributor has agreed to sell wholesale to retailer. The royalty rate for the
masters in this contract is set at 10% of PPD therefor if PPD is $11.98 the band
would receive $1.20, monies to be paid out by March 31st and September 30th
respectively.
The Merchandise
The merchandise agreement states that the company will own rights to
everything in connection with the Masters. From the Net sales of Merchandise
band receives 60%. The Labels share of Merchandise is 40% of net and 10% of
gross income of touring. This portion of the contract is not in favour of the artist,
being that the Labels percentage of both touring and merchandise is high. Given
that an artist share of successful album sales does not translate to financial
success, you as the artist must retain as much revenue as possible through
various sources.
Publishing Merchandise and Touring
In regards to publishing the artist will own 100% writer’s share 50% of all
gross publishing income, and can publish work but must pay Label equal share.
The terms of payment of publishing touring and merchandise income the Label
must receive its share immediately and directly from the source of income. As the
artist it will be up to you to negotiate
The controlled composition clause means by law, record companies must pay
mechanical royalties to the songwriters and publishers. In this contract you the
artist could receive reduce mechanical royalty (no less then 75% reduction) if the
company negotiates a distribution deal. The contract states that The Company
will receive 50% gross split on all publishing of work under the term.
As in most agreements between the artist and record labels, there is
a contract that both parties have to sign and agree to. This contract
binds them legally to insure that both receive a suitable and desired
outcome. In this essay, the terms and agreements concerning ‘the
artist’ and The Company will be discussed in depth, this will allow the
argument in favour of not signing the contract to be highlighted.
Aspects that will be emphasised that are not agreed with concern, the
terms, and who owns the masters to the artist’s work. I will be
suggesting that as there is no set time frame outside of the start date,
therefore the artist is hindered because there is no set process
outlined. Eventually I will acknowledge that by The Company owning
the masters to the artist’s creations, the control of these productions
in every way is in the hands of someone other than the creators. In
summary, I will argue in favour of the artist, and the rights earned by
the artist’s hard work and dedication to their genre.
Once breaking down this contract into plain language it is clear to see that the
contract lies in favour of The Label. Being a new act that has gained YouTube
success with their art, relinquishing artistic control in exchange for a chance at a
small percentage of potential profit is not in your best interest. One must remember
that the cost of production and recording are recoupable and therefor artist must be
efficient with time in order to afford to live on a small advance. The lack of overall
control artistically along side with low percentages on merchandise leave me with
the conclusion the artist should pass on this offer.