Category: Sound Recording

band performing

Recording Industry Contracts – What To Look For

band performing
Negotiate your recording industry contract

The Ins and Outs of Recording Industry Contracts

One of the most exciting moments in an artist’s career is when he or she receives his first recording contract.  This can represent your  “big break” and an opportunity to market your music and gain more fans, followers and ultimately sales. The smart artist carefully reviews his contract before committing to any music marketing company, recording industry contract, or other agreement.  This is extremely important.  Committing yourself to the wrong contract can limit your artistic freedom, obligate you to produce a nearly impossible amount of music in a short period of time, and restrict you from working with your favorite musicians or producers. Here is a list for some common things to look out for:

Your minimum recording commitment

In summary, your minimum recording commitment (or “MRC”) spells out how much music you have to produce for the marketing company or record label in exchange for their services.  The MRC can be phrased in terms of the number of singles or number of albums, or sometimes both.  Have a good idea based on your experience of how long it takes you to produce a song or album.  You  will need to have enough time to create a quality product without sacrificing your artistic integrity, which is what brought you the contract in the first place.  The timeframe for meeting your MRC can often be pretty tight, which brings us to our next point:

The Recording Industry Contract Term

Rather than being for a year or for a certain number of albums, many recording industry contracts create several back-to-back terms that obligate you to meet your MRC within each term.  These can be as short as six months.  The contract typically gives the label or marketing company the option, but not the obligation, to cancel or renew the contract at the end of the each term while keeping the work you have produced thus far.  This often a pretty one-sided deal.  You may not have the same right to cancel if you’re unhappy with the relationship.  Ideally you would want either one of you to have the option to cancel the relationship after each successive term or extend the whole term in the recording industry contract so there is more of a mutual commitment.

Getting a Win-Win Deal

You scratch my back I’ll scratch yours as they say.  Many recording industry contracts are pretty thin on detail when it comes to what exactly the record label or marketing company will do for you.  You should have a very clear idea of what you want out of the deal and how the company plans to give it to you.  Are you looking for social media promotion?  Bookings?  Paying for your production and CD costs?  Perfecting your listings on iTunes, submitting your material to Spotify and Pandora and registering you with the performing rights organizations?  These are all critical parts of marketing your music.  Keep in mind too that most of the money in the music industry is made in live performances and merchandising rather than unit sales.  Be aware of  smaller companies that claim to have hot “industry contacts”.  Such companies often claim that they’ve worked with big artists and launched their careers.  Obviously these claims may be true, and this might be a great relationship for you, just be aware of claims that are very hard to prove.  Do your homework. What does their website look like?  How long have they been in business?  Exactly which artists having worked with and is their name on those artists websites or CDs, etc.

Music Industry Relationships and Leverage

Always know who has more bargaining power in any relationship.  If you’re looking at a contract from Virgin Music or Sony, suffice it to say that there’s probably not a whole lot you can do in terms of negotiating terms, and you are probably lucky to have such an opportunity.  If you’re dealing with a smaller company though, know that they might be hungry just as you are, and you may have more power negotiating terms if you already have an established fan base, merchandising relationships, and other things going for you that make you easier to market.  It’s sort of like the joke about getting a loan – the only people who get them are those who don’t need them.  The best contracts go to artists that have already done a lot for themselves and already have a following.

Getting the right advice in advance can make the difference between hitting it big and ending up with an impossible situation.  Call me for consultation and contract review.  A little good advice and perspective at the beginning can save you a lot of headaches down the road and open you up to  win-win deals that will deliver what you’re really looking for.

Ari Good, Esq.

(786) 235-8371

The Right to Digital Public Performance

The Six Rights of Copyright – Part VI: The Right to Digital Public Performance

 

The Bundle of Rights That Make Up Copyright

 

The digital public performance right is the sixth and final part in our series on what makes a Copyright. The prior five rights reviewed are linked below. To refresh, the six parts of copyright are:

We’re individually exploring each of these rights to get behind the opaque curtain of copyright. An understanding of each right and how they operate will allow you, the creator, to be in a better position to take advantage of your copyright.

There are a couple words of caution. First, the practical effect of these exclusive rights will depend on the type of copyrighted work (literary works, musical works, motion pictures, sound recordings, etc.). Second, these are exclusive rights. The law allows the copyright holder only to exercise these rights.

VI: The Right to Digital Public Performance of Sound Recordings

 

The right to digital public performance of sound recordings is an extension of the traditional right to public performance. Copyright holders have the exclusive right to publicly perform their sound recordings–a particular recording of a musical composition (e.g. master recording, masters)–via digital transmission (e.g. internet, satellite radio). The older right to public performance specifically excludes sound recordings. This right is limited because it does not cover analog transmissions such as traditional radio or television.

Why the Right to Digital Public Performance?

 

Digital Public Performance - Webcasting
Digital Public Performance: Webcasting

Congress created this copyright protection (DPRSRA legislation) because of advances in technology. High quality digital copies of sound recordings became easy and cheap to make in the 1990’s. Suddenly, people could readily profit from this practice and artists had little legal recourse. The digital public performance right creates a partial solution for this gap in copyright law. Groups that want to legally play sound recordings via digital transmission (think Spotify and Pandora) now must pay for that right. It was perfectly legal to not pay prior to this legal update. An organization called Sound Exchange currently administers the licensing of sound recordings.

There is a three-tier system that sets the licensing fee for sound recordings. The first tier doesn’t require certain broadcasters to pay any licensing fees. The second tier requires broadcasters to pay a “statutory” licensing fee set by the Copyright Board. The third tier requires broadcasters to negotiate the licensing fee directly with the copyright holders. Much of the highly publicized dispute over fees for sound recordings is about this second tier payment structure. Artists, broadcasters, and other interested groups vehemently disagree about the correct licensing fee amount and how to calculate that fee.

Limitations on the Right to Public Display

 

The most important limitation on copyright protection for sound recordings is that it only covers digital transmission. It’s business as usual for analog broadcasters in radio and television. The details of the digital public performance right also has many more nuances. It’s a fair complaint by sound recording copyright holders that they’re treated unfairly when compared to musical composition copyright holders. It’s also safe to say that no one (artists, broadcasters, and copyright holders) is actually satisfied with this copyright protection.

Ari Good, JD LLM, is a Miami entertainment lawyer and aspiring musician himself who represents DJs, live musicians, fashion models, and other entertainers in copyright, licensing, and contract matters.

Contact us toll free at (877) 771-1131 or by email to info@goodattorneysatlaw.com.

Image by Doug Symington

10 Tax Issues and Deductions in Producing your Own Sound Recordings

Tax Issues and Decutions for the Production of Sound Recordings

 

Planning your taxes when recording music (sound recording) is likely not a priority. It is, however, a good idea. Musicians are increasingly recording their own music and money is often an issue. With that in mind, here are 10 tax issues and deductible expenses you should know when recording your own music. (These tax issues and deductions may also apply to other creative endeavors like film-making)

1. Costs for producing “sound recordings” typically must be written off over a period of years (“Capitalized”).

The IRS mandates that costs associated with the creation and production of sound recordings are written off over a period of years. This means that you cannot deduct the entire amount of a sound mixer, for example, in the year you buy it. Rather, that cost must be spread out over a number of years. The production of sound recordings, motion picture films, and video tapes are specific examples of “tangible personal property” that cannot be deducted entirely in the year of purchase or cost.

The exact method of accounting for these costs is extraordinarily complex and is best left to a tax professional when filing your taxes. The following, however, are prime examples of purchases and costs you should keep track so that your tax professional can maximize your tax savings.

2. Home Studio/Office Expenses

Tax write off for your home studio and sound recordings
Tax Write Off for your Home Studio and sound recordings

You obviously need a location for where the recording will occur. This is where expenses for a home studio or off-site studio come into play. Whether you’re stocking and preparing the home studio for a great musical environment, or renting a studio outside the home, these costs are part of the expense in producing a sound recording. If it’s from home, you may also be able to write off part of housing expenses like rent, internet, and electricity.

3. Equipment Expenses

Need to buy a laptop to create your masterpiece? This is an equipment expense for the production of sound recording. Other examples include speakers, sound systems, printers, audio systems, amplifiers, recorders. If it’s necessary for creation of the sound recording, make sure to keep track of it.

4. Software/Program Expenses

There are may pricey music programs out there make it easier to produce music (or just are simply necessary). Don’t forget to keep track of your purchase of these programs and software.

5. Instrument Expenses

This can include common examples like guitars, drums, and keyboards that put the sound in your sound recording. It can also include associated musical supplies, like picks, drum sticks, strings, as well costs in repairing and upkeep of the instruments.

6. Promotional Expenses

This is one of the categories of expenses normally associated with music production that it’s possible to deduct in the same year. The costs with connecting an audience to your sound recording fall into the realm and can include: business cards, professional photos, CD’s, DVD’s, videos, website development and hosting, or advertisement.

7. Educational Expenses

Educational expenses cover things like: voice training, purchase of musical arrangements, music downloads and CD’s, musical publications, sheet music, or other types of coaching and lessons

8. Travel Expenses

Need to travel as part of your music production? Don’t forget to keep track of those costs and and expenses

9. Professional Expenses

Legal and accounting services may be an afterthought for smaller scale music production. It also may be necessary if you want to reap the financial and artistic rewards from your creations. Other professional expenses can include costs to be part of a musical association or trade group, as well as licensing and copyright services.

10. Labor Expenses

If you need others to help you in your creation (and not good friends working for free), the cost of this “labor” is a tax write off. Just make sure that you keep records of your payments. These labor costs cover not only the technical aspects of the sound recording production, but musicians and singers.

Ari Good, JD LLM, is an experienced Miami entertainment lawyer and aspiring musician himself who represents DJs, live musicians, fashion models, and other entertainers in copyright, licensing, and contract matters. For a free and confidential consultation to discuss your legal rights, contact Ari of Good Attorneys at Law, P.A., in Miami-Dade County at (239) 216-4106 or toll free at (877) 771-1131 or by email to info@goodattorneysatlaw.com. Visit goodattorneysatlaw.com for more information. 

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