Sueneie : : " equired to be a union member or become one within 30 days, and the arist 2 Recording Artist | nat be paid no less than union scale. Most arts eoeive advancis in exces of Contracts ‘union scale. Alot of kids dream of becoming recording stars, ofbeing the next Linkin -against (that is, recoupable out of) royalties payable to the artist. Park, Alicia Keys, 50 Cent, Gwen Stefani, or Keany Chesney. Bur its often Jong, tough road between the dream and the recording contract. Assuming shat would-be stars do not wish to launch their careers through their own ‘Website, or one hosed by ohers, they snus fst make contact with a record 2 wees (aszlly nine month), The minimum aamber of recordings has wadi- DURATION producer or an A&R (artists and repertoire) executive, usually through a rec ramendston roma fiend, a manage, an stomey; a agent, another rit 0° ‘een framed in terms of albums (defined as not less than 10 individual fons totaling not less than 50 to 55 minutes duration). In the Internet ere, approval, z Tn the case of record companies which are signatory to agreements Wi American Federation of Television and Radio Ariss (AFTRA) or the Ax Federation of Musicians (AFM) (which includes all che “majors”), the case, MCA Records sought to prevent the recording artist from recording for another label after an alleged bresch the delivery of recordings. The California Court of Appeals artist could not be prevented from recording for another com- “pany for a period longer than the one in which her commitments to MCA ‘could have been fully performed, This was considered to be five years an ini- {al period of two years plus thee one-year options). MCA unsvecessflly con teaded that the term could be extended for up to seven years by reason na 1984 dispure between Motown Records and R&B singer Teena Mare 4 California appeals cour eld thar these payments must be truly guaranceed— actin relation to the “supergroup” Audioslave, made op o toe dependent onan option exercised atthe label’ discretion, Further, recor ee el ing budgess and tour support payments are not part of the guaran rninimum amount. "These goaranceed payments must be fixed and not merely contin EXCLUSIVITY ‘companies customarily acquire the exchusive right to record an artist performers make a livelihood performing as sderems, Th : ey are not featured performers on recordings, and they are not prominently high- é GROUP ARTISTS ‘A recording contract may cover two or more arists who perform together: ‘group. In addition wo acquiring the exclusive right tothe group6 recording joes, che record company acquires the excusive right to use the group’ name cordingly, i is desirable to specify the terms snd conditions ander Jesnan services can be performed for ocher record companies. Typicalnegotiated terms require credit tothe artist’ regular zecord company, such as “courtesy of..." limitation of name credit to sideman only and not on the front ofthe album packaging; a maximura of two or three songs on which the sideman services can be used in any on¢ album; and sometimes a requirement ‘ards. Much depends on the bargaining position of the parties as well as th ‘concessions made by the distibutor of the soundtrack album. These conces sions may include proper credit to the arst’ label and royalry payments to ch ardsts record label. Generally, che ast} record company will reserve the right to diseibate its arises recording as a “single” orto include it in the artis ‘own albums, possibly with the right to sefer to the movie itself for added pro- >, a adgeslabel, and possibly other specialty labels. In aiision to price erent bls win th sme pce capory ae sje rend oy period the record company will not be faced with competition by the sam aris performing the same matecial RECORDING AND RELEASE REQUIREMENTS Aseconding agreement sets forth the minimum mumber of ides to be record daring each contract year (hough in some cases the required album length: expressed in terms of total ranning time). A side customarily consis of sin late additional sales through lower pricss. ARTIST ROYALTIES become disillusioned and try to avoid further recording obligations to the artis. “Tihas, recording agreements sometimes sate that the artist shall be paid union scale, or another amount reflecting the cost of prior albums for the agree ‘ypon minisium number of sides that remain unrecorded. ‘Artis quickly sense when companies have cooled toward them, and units: Bumps are limited to sales after the albums have attained the req-iste plawaus, Also, royalty rates are often, though not always, increased when a company decides to exercise is option to extend the term of recording agres~ ment. Such increases apply only to recordings made in the option period, otto recordings made in earlier contract periods. These two forms of escalation are "The suggested retail ist price in the United States has for some time been 196.98 for singles and $16.98 to $18.98 for CDs, though some record companies have begun offering releases ata manufaceurer’s suggested retail price (MSRP) 0f $12.98 to compete with cheap and/or pirated digital downloads. The sug gested retail lit prices are either published by the manvfacturer or extrapolated From the wholesale prices charged to dealers. Retailers are constantly offering records for sale at a discount from ehe suggested retail lst price. If chese dis~ counts are subsidized by the manufacturer through a reduction in wholessle prices, the arise whose royalties are calcalated om the basis of wholesale prices, trill sufer a reduction in royalties. However, even artis on a retail price roy: alty basis usually have a clause allowing pro rata reduction when normal whole- sale prioes are discounted. ‘ “The cost of packaging is also deducted from the base amount for comput- peciod, and a reasonable dime limit for liquidation of che reserve, such gal installments over four semiannual accounting periods, rather than as Jump sum liquidated at the very last moment. same distribution fee has been deducted. The assumption is thatBroadway shows may cost as miuch as $100,000 or more, depending on the size ‘nes’ high seart-up costs for going online, as well as the effect of unauthorized downloading. ; Tn response to this uncertainty, new models are sometimes proposed as lernatives 10 the “saundard” royalty agreement. Rather than agree to a com- plicated web of packaging and technology deductions, some ardsts have nog Popularity and generating such income. RECORDING FUNDS wo slbums, with stipulated minimum and maximum amounts PUBLISHING RIGHTS range from $90,000 to $150,000 or more for one album. Established Ihave been known to run up costs in excess of $500,000 for an album. exxreme example, former Guns N’ Roses singer Axl Rose reportedty: rll making «solo album that has yet to be released) Original-cast 2 publishing interest in compositions written by the artist ler the recording agreement. peeedet| Farber, the contracts wich the artists may provide that to the excent mechani- f conventional tour support. VIDEO RIGHTSMose recording contracts provide that artist royalties are not payable on ‘videos that are distributed to promote record siles. Royalties should be pay2bl ‘on videos that are distributed commercially. Although the commercial market for videos stil imited, this may change in the fucare with the increased use demand that the arst provide free video licenses, While artists may agree this f the video i for promotional purposes, they may balkif the video is bein exploited commercially. ASSIGNMENT In certain citcumstances, for example, in the event of sale or merger, record ‘company may wish to assign its rights to a recording agreement to anoth: entigg In most contracts there is no prohibition against the assignment of ch agreement. This unfetrered freedom of assignment can be injurious to an artist particularly when the new owner lacks the same interest in che artist as original record company. ‘New artists may not be in 2 position to quibble about the assignability f atises recordings in advertising, or the umber of ‘be used in any compilation with other artists. : COUPLING ‘companies sometimes issue or authorize others to issue recordings that nature of employment in the industy, record companies are underseande rehuctant to include key man clauses in their contracts.__, the debuor’ creditors. Delinquent artis royalties ae ordinarily general debts with contract no matter what the circumstances. BANKRUPTCY ‘All Platinum, Springboard—fled for bankruptcy in the 1980s. In each debtor’ master recordings were sold and the net proceeds were disuibuted: othe year preceding the fling of his petition.