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Record deal contract

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Postby abakus » Fri Sep 17, 2010 7:51 pm

Guys, I'm getting a record deal to do an EP, and I'm just getting round to the contract bit, and I don't really know what artists usually get because I've never done one of these.

It says Royalty Splits 50/50 between artist and record label after deductions
Rights are exclusive
3rd party 50/50 split Net receipt
Any remix costs to be split 50 /50 between Artist and record label deducted from
sales income
Any promotion costs to be split 50 /50 between Artist and 'record label' deducted
from sales income.

As a contract does this look alright to you? Is this what new artists usuall get? It's for 3 tracks.
Also for the remixes is it split 50/50 between record label and the remix artist or 50/50 between me and the record label.
What is a 3rd party split net receipt
What does Rights are exclusive mean?
Cheers,

Zone
Last edited by abakus on Fri Sep 17, 2010 8:22 pm, edited 1 time in total.
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Postby -[2]DAY_- » Fri Sep 17, 2010 8:03 pm

absolutely don't sign an exclusive record contract. That is my opinion, because it means all material you release is theirs and you can't pick up a better deal somewhere else with your next batch of material if there are any on the table. Exclusivity takes them off the table from the get-go.

Find a lawyer friend to read it, is the safest bet.
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Postby deadly_habit » Fri Sep 17, 2010 8:04 pm

sounds like a shit deal tbh
also 2day exclusive in this context refers to these tunes not him as an artist
it means he can't sign these tunes to another label later on
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Postby -[2]DAY_- » Fri Sep 17, 2010 8:14 pm

deadly habit wrote:sounds like a shit deal tbh
also 2day exclusive in this context refers to these tunes not him as an artist
it means he can't sign these tunes to another label later on



My bad
I'm honestly as clueless as anyone because all I've ever seen is my own contract with TV/film production music library. made the poor assumption that the lingo referred to the same stuff.
Its likely that theres a lot of differences, because to me that deal doesn't even look bad at all. It's a much different biz tho I guess.
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Postby abakus » Fri Sep 17, 2010 8:20 pm

Ok heres an exact copy of what it says just so u can see for exact.
The only thing that makes me think that this 'exclusive' rights means I can't release new stuff under a new label is that it says it's only for the three tracks that I'm releasing.

'Record Label': Heads of Agreement

CONTRACTING PARTY: Theo Johnson

DATE: 17th September 2010
ARTIST: Zone
TITLE: Melodrone : Killer Beast : Ascension
TERRITORY: World
TERM: Life of Copyright
RIGHTS: Exclusive
FORMATS: Any & All
OPTION: 2 Singles
ROYALTY SPLITS: 50% 'Record Label' / 50% Artist after deductions
ACCOUNTING: Bi Annually (31st December/30th June) + 90 Days
3RD PARTY: 50% / 50% Split Net Receipt
REMIXES: Any remix costs to be split 50 /50 between Artist and 'Record Label' deducted from
sales income
PROMOTIONS: Any promotion costs to be split 50 /50 between Artist and 'Record Label' deducted
from sales income
SPECIAL PROVISIONS: All 3rd Party samples must have appropriate clearance from Copyright owner(s)
and Licensor warrants all such samples have appropriate clearance.

It is our intention to replace this deal memo with a more formal agreement, however until that time; this will
serve as the full and complete binding agreement between both parties.

Then there's the signing shit.

So what do u think?

Cheers,

Zone
Last edited by abakus on Fri Sep 17, 2010 8:22 pm, edited 1 time in total.
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Postby deadly_habit » Fri Sep 17, 2010 8:22 pm

the royalty bit is fine it's the rest that's kinda shit and ambiguous
also i'd try to opt out of lifetime exclusivity rights and rather ask for a set period of time if you do go thru with it OP
best to learn from the mistakes i've gone thru
also ask for some sort of accounting and sales tracking to be included in the contract, since believe it or not some labels are real shit about sending your sales records to you for when it comes time to figure out what you're owed
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Postby deadly_habit » Fri Sep 17, 2010 8:24 pm

abakus wrote:It is our intention to replace this deal memo with a more formal agreement, however until that time; this will
serve as the full and complete binding agreement between both parties.

yeaaaaaaaaaaaaahhhhhhhhhhhhhhhhhhh no, even if that would hold up in a court :lol:
not that these things ever go to small claims but that would be essentially be like signing a blank check with how ambiguous that "contract" is
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Postby abakus » Fri Sep 17, 2010 8:27 pm

Thanks, So what kind of things specifically do u think i need to get changed: Just the lifetime exclusivity rights and the accounting sales tracking or anything else? And what do you reckon is a good set period of time to ask for?
It's annoying how excitin it was gettin a record deal up till now :(
Cheers,
Zone
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Postby deadly_habit » Fri Sep 17, 2010 8:29 pm

yea i know it's exciting, just take it for what it is, a business transaction and cover your ass
is this for vinyl, digital or both btw
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Postby abakus » Fri Sep 17, 2010 8:32 pm

Well it says 'FORMATS: Any & All', so I assume it's both. It could just be digital though.
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Postby deadly_habit » Fri Sep 17, 2010 8:47 pm

ok i'll break it down how it see it as is and you decide what is important to you
abakus wrote:'Record Label': Heads of Agreement

CONTRACTING PARTY: Theo Johnson

DATE: 17th September 2010
ARTIST: Zone ***should have your real name herein referred to as 'artist name here' within this contract
TITLE(s): Melodrone , Killer Beast , Ascension
TERRITORY: World
TERM: Life of Copyright *not clearly defined anywhere*
RIGHTS: Exclusive *not clearly defined anywhere*
FORMATS: Any & All *not clearly defined, each format imo should have a separate deal or subsection*
OPTION: 2 Singles *not clearly defined*
ROYALTY SPLITS: 50% 'Record Label' / 50% Artist after deductions *no clear definition of deductions or accounting for them*
ACCOUNTING: Bi Annually (31st December/30th June) + 90 Days *by mail, email, how will it be broken down*
3RD PARTY: 50% / 50% Split Net Receipt *what?*
REMIXES: Any remix costs to be split 50 /50 between Artist and 'Record Label' deducted from
sales income *if they have the rights to your song, why should you be covering the costs of having someone remixing it when there is no terms of you seeing any return from said remix?*
PROMOTIONS: Any promotion costs to be split 50 /50 between Artist and 'Record Label' deducted from sales income *doesn't cover specifics such as is it print ad campaign, or what kind of marketing, also why are you paying them to promote their label?*

SPECIAL PROVISIONS: All 3rd Party samples must have appropriate clearance from Copyright owner(s)
and Licensor warrants all such samples have appropriate clearance. *standard if you used uncleared samples it's on your ass*

It is our intention to replace this deal memo with a more formal agreement, however until that time; this will
serve as the full and complete binding agreement between both parties. *we don't have a real contract at the moment, just a shoot from the hip vague layout, but we may do a proper contract later on with explicit terms laid out and when we do you signing this obligates you to abide by this*

Then there's the signing shit.

So what do u think?

Cheers,

Zone

that's how i read it
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Postby kaiori breathe » Fri Sep 17, 2010 8:48 pm

I suggest getting a free consultation with a music lawyer to read over this. Looks like a really shitty deal though.

"Royalty Splits 50/50 between artist and record label after deductions" I don't get this one, is this 'royalties' as in the money you get if your songs are played on the radio? Or are they using the term differently? If it is the first then here's a better split > 100:0 in your favor - accept nothing else, that stuff should be sorted out by royalties agencies if you're with them anyway, so if they are saying "royalties" as in the money made if your stuff gets played on the radio then I have no idea how they plan on actually doing that.

If however, and this is infinitely more likely, and equally infinitely more retarded, they're using royalties to refer to money made from sales (stupid, although a lot of people seem to do it these days), I'd pitch for 60:40 at least.

As for deductions. What are these deductions? Find out.

"Rights are exclusive" - I think here this is in reference to your tunes, they own the rights. Not a big deal. Most labels will want this. Just means what deadly said.

"3rd party 50/50 split Net receipt" - I have no idea what this is. Ask.

"Any remix costs to be split 50 /50 between Artist and record label deducted from sales income" - Remix costs? How on earth could a remix incur costs? No, just no. You should not be incurring ANY cost.

"Any promotion costs to be split 50 /50 between Artist and Nod Factor deducted from sales income." - Promotion costs should be covered by them, good promotion doesn't always require money, in fact if you do it right you can run your promotion incurring next to no costs at all. So they should cover it.

Ask them what they mean by promotion, find out what they're going to do. Most labels idea of promotion is "make a status update on facebook and maybe get a blog mention from my mate who gets 100 views a year" :roll: again, you should be incurring NO cost.

Also, if that is as they presented it to you then tell them to draw up something proper that includes full details, or get a music lawyer to do it for you.

You shouldn't be incurring ANY costs. If they really are incurring costs then tell them to take it out of their cut, not yours, because the things they're supposedly incurring costs for are either a., not even required services from a label, or b., services most labels do piss poor jobs of.,

If they want you they'll fold, if not well fuck em', it's not like there's a shortage of labels out there. Don't sign it because you think you'll never get another label. There are shit loads of labels, the market is completely over-saturated, you WILL be offered a signing again.
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Postby Sinisterbeats » Fri Sep 17, 2010 8:57 pm

iv not got any experience in this really but when i signed to the label im on i get 80% of profits from sales. dont know what the usual amount is though.
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Postby abakus » Fri Sep 17, 2010 8:59 pm

Thanks guys, you've been a lot of help! You've probably saved me from selling my soul to the devil so thanks a lot!
How did you guys learn this stuff when you were first startin out as producers?

Cheers,

Zone
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Postby deadly_habit » Fri Sep 17, 2010 9:02 pm

abakus wrote:Thanks guys, you've been a lot of help! You've probably saved me from selling my soul to the devil so thanks a lot!
How did you guys learn this stuff when you were first startin out as producers?

Cheers,

Zone

trial and error, dealing with good contracts and good labels, and shady people and shady labels, that and research for my own label and wanting to know what things meant
once you have a good experience with a good label you'll know how things should run and look from the gates
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Postby webstarr » Fri Sep 17, 2010 11:58 pm

Sinisterbeats wrote:iv not got any experience in this really but when i signed to the label im on i get 80% of profits from sales. dont know what the usual amount is though.


Generally it will vary on what type of release it is. If it's digital only it should be greater than 50% as there is almost zero risk to the label, they shouln't lose money and they are doing something you could easily do yourself. The only benefit you are getting is their name on the release and having them promote it which I imagine is of little value in many cases anyway. If they are doing vinyl then its different as there are the costs of mastering and production which are obviously a risk so the labels slice of the profit will be higher.

All i'd say with these things is ask them about anything you're not sure about and if you're not happy with it ask them to change it
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Postby thinking » Sat Sep 18, 2010 10:43 am

I think there's some misunderstandings in this thread - for a start this is only a HOA [Heads Of Agreement] and not a contract. The HOA is to outline the terms of agreement before a full contract is signed - hence it just summarizes some of the terms which will be laid out in full on the contract itself. This fact is stated in the HOA itself - "It is our intention to replace this deal memo with a more formal agreement, however until that time; this will serve as the full and complete binding agreement between both parties."

Everything looks fairly standard to me - 50/50 split of net profits is pretty much the standard for a single release of this nature. Basically all reasonable costs MUST be covered before any profits are made, and then that profit is split 50/50

Reasonable costs include - mastering & manufacturing, promotion, remix fees, artist advance - basically any cost involved with putting out a record. Once all money that has been spent in this respect by the label has been recouped from sales, anything over that is profit and should be split between label & artist.

Exclusive rights - this means that the label is the only one which can release the tunes, to stop you from signing the same tunes to 3 labels, or signing the tune to a compilation once the label has spent money on releasing it and blowing it up. The 'Term' is the length of time they hold this exclusive right. There's no time period mentioned on the HOA so you would have to check the contract for this, but a standard length is 5 years.



Basically I don't see any fundamental problem with this HOA but obviously the contract is a different matter - this HOA is reliant on the terms of the contract so I would recommend you ask to see that as well. Without wishing to be dismissive, I would take some of the other 'interpretations' of the HOA in this thread with a pinch of salt as I'm not sure everyone has understood its function and the content fully.

If you have any more questions feel free to post/PM. :4:
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Postby deadly_habit » Sat Sep 18, 2010 8:13 pm

heads on agreement are non binding until the full contract is signed so really what's the point in lieu of sending a clearly laid out contract?
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Postby Mad_EP » Sat Sep 18, 2010 9:57 pm

I was about to chime in, but it looks like Thinking has already pretty much covered it.

The terms are pretty standard - nothing that under-handed. Just make sure to clarify (as Thinking also mentioned) the length of exclusivity. In my experience, it has usually been 5 years...

Plus - never under-estimate the power in keeping a good & open relationship with the labels you work with. I have had 5-year exclusivity deals that the labels let me out of simply because they did me a favor as a friend.


Good luck.
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Postby webstarr » Mon Sep 20, 2010 11:38 pm

deadly habit wrote:heads on agreement are non binding until the full contract is signed so really what's the point in lieu of sending a clearly laid out contract?


yes they are
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