Music Contracts & Royalties Defined By: Ty Cohen Artists often wonder how their royalties are going to be computed when they sign music contracts. This is truly an important question because basically determines how much money is going to end up in their pockets. Recording contracts are meticulous and somewhat confusing so I will try to explain royalties to you as simple as possible. A band or artist’s royalties are totaled as a percentage of the “suggested retail list price” for the total number of records sold. A general percentage that most artists will find in their music business contracts is anywhere from 7% to 16%. This will obviously depend on who you are and what the expectations are for your record sales. Remember, royalties are the only place you are going to make your money but it is an important part of your contract. Royalty is expressed either as a percentage, a point or in escalations. Escalations suggest that you get a flat rate for up to a certain amount sold. Then your rate would go up if you sell over and above the first amount. Depending on the company you have the music contract with, you may find that your royalties could include a packaging deduction or not include one. If it does not include one then you may find that the royalty price is reduced and then your royalties will be calculated. This is why it is vital that you read and re-read your music business contract before you sign so you completely understand. Keep in mind that there may be a producer’s royalty that you are entitled to take care of from your own royalties. So, let’s say you had a royalty of 13% and the producer’s royalty was 2%, you would only receive 11%. Other than these industry standard deductions, you may see deductions for free goods that might go to wholesalers meaning your wouldn’t receive royalities for these records. Also, promotional records such as those sent to radio stations are not included as well. Keep in mind your royalty account can be charged for any item that is included in signed recording contracts. This is why it can’t be stressed enough that you need to understand every detail of what you sign because it may not be a dream come true after all. So, be careful, don’t be afraid to ask questions and don’t be afraid to seek the help of a professional. About the Author: Ty Cohen, the online music industry's most recognizable voice is the former owner of a successful independent record label, current owner of Platinum Millennium publishing and nation-wide music industry seminar speaker and panelist. He is also the author and creator of over 40 best-selling music business books, reports, courses, audio products and other music industry "How to" resources, that have helped tens of thousands of individuals like you to successfully find their way in the music business. Visit http://www.musiccontracts101.com/cmd.php?Clk=2416842/ for more information on music contracts, recording contracts & music business contracts.

Music Contracts 101: Two Key Parts By: Ty Cohen In relation to music contracts there are often two areas, the amount of produce and advancements, that artists need explained. These two areas will be mentioned in every music business contract so it is crucial you have a firm grasp on their definitions. Over the next few paragraphs, I am going to define and discuss the importance of these two areas. First, when in comes to recording contracts, the amount of product you are expected to release is included. Everyone who is offered a music contract will have to record the initial album referred to as the commitment album. Keep in mind, if this album does not do well, there is a chance you may not be picked up for the second option. In addition to the commitment album, there may be “X” number of options included in music contracts. The amount of product you will be committed to is your initial plus “X” number of options. Unfortunately, the record label will control how many options they will allow you to record. This will most like be directly related to how successful the previous album was. This leads us to advances. Advancement is the amount of money that the company offers in the start of the music business contract. This is meant to aid the band or artist is starting out and recording. Eventually this money is reimbursed from the artist’s royalties for the records they sell. In other words, if you are fronted $100,000, then eventually the money will be recouped by the company from your record sales. The good news is that in recording contracts, these advances do not have to be repaid in the event you do not sell any records. But don’t worry, the label will find a way to get their money back, maybe by making you record another record until they are refunded. This also means that you will not receive any royalties until the company is paid back, according to the majority of music contracts. This is both a risk for you and for the label you have signed the recording contracts with. But hopefully, you will never be in that position. Ideally, everyone wants to succeed and sell as many records as imaginable. And this is possible. But as with any contract, just make sure you completely understand all the terms, especially about the amount of product you are expected to produce and the advancements that you are entitled to pay back and you should do great! About the Author: Ty Cohen, the online music industry's most recognizable voice is the former owner of a successful independent record label, current owner of Platinum Millennium publishing and nation-wide music industry seminar speaker and panelist. He is also the author and creator of over 40 best-selling music business books, reports, courses, audio products and other music industry "How to" resources, that have helped tens of thousands of individuals like you to successfully find their way in the music business. Visit http://www.musiccontracts101.com/cmd.php?Clk=2416844/ for more information on music contracts, recording contracts & music business contracts.