Statutory Royalty Rates

[bknot1]

hope this helps you all

As of January 1, 2006 the statutory mechanical rate is as follows:

9.10 Cents for songs 5 minutes or less
or
1.75 Cents per minute or fraction thereof over 5 minutes.

For example:
5:01 to 6:00 = $.105 (6 x $.0175 = $.105)
6:01 to 7:00 = $.1225 (7 x $.0175 = $.1225)
7:01 to 8:00 = $.14 (8 x $.0175 = $.14)

[bknot1]

allways remeber to ask you client

1) How many recordings will you make?

as this is important to figure out on how much you will be recieving ...

[bknot1]

so if you pressing up 1000 units sale royalties shoul look like this for a 12 track Album..

12 x $0.091 = $1.092 x 1000 = $1,092 payment

now some labels will want to have at 75 - 85% reduced statutory rate..

(85%)
12 x $0.07735 = $0.9282 x 1000 = $928.20 payment


see how they save money...
ALSO NOTE: Some record deal have a cap on song 10,11 or 12 so any songs after that your are pretty much doin them for free...(read your contracts)

thats it for today class..tune in next week for Q&A

[Change of POETS]

I think some of these youngsters are confused, Knotty. Let em know what Mechanical Royalties are, and why they're paid this way.

I know I don't know much about them, considering I'm not a producer. I thought MR's were paid on sampling or for covering someone elses work?

[bknot1]

give me a moment to get my thoughts and notes together..i got all the info somewhere on my work computer..

that would be a mechanical license if you are recording and distributing a song you didnt write yourself (ie Samples)

[Change of POETS]

Originally Posted by bknot1

give me a moment to get my thoughts and notes together..i got all the info somewhere on my work computer..

that would be a mechanical license if you are recording and distributing a song you didnt write yourself (ie Samples)

Ok, yeah.. I had my terms confused.

[bknot1]

This should give everyone a good understanding of Royalties that you can earn from sales..

http://entertainment.howstuffworks.c...royalties4.htm

Types of Rights and Royalties
Licenses and their corresponding royalties fall into four general categories:

Mechanical licenses and royalties - A mechanical license refers to permissions granted to mechanically reproduce music onto some type of media (e.g., cassette tape, CD, etc.) for public distribution. The music publisher grants permission for the musical composition to be reproduced. The mechanical royalty is paid to the recording artist, songwriter, and publisher based on the number of recordings sold.

Performance rights and royalties - A performance-rights license allows music to be performed live or broadcast. These licenses typically come in the form of a "blanket license," which gives the licensee the right to play a particular PRO's entire collection in exchange for a set fee. Licenses for use of individual recordings are also available. All-talk radio stations, for example, wouldn't have the need for a blanket license to play the PRO's entire collection. The performance royalty is paid to the songwriter and publisher when a song is performed live or on the radio.

Synchronization rights and royalties - A synchronization license is needed for a song to be reproduced onto a television program, film, video, commercial, radio, or even an 800 number phone message. It is called this because you are "synchronizing" the composition, as it is performed on the audio recording, to a film, TV commercial, or spoken voice-over. If a specific recorded version of a composition is used, you must also get permission from the record company in the form of a "master use" license. The synchronization royalty is paid to songwriters and publishers for use of a song used as background music for a movie, TV show, or commercial.

Print rights and royalties - This is a royalty paid to songwriters and publishers based on sales of printed sheet music.

NOTE: Record Labels will never try and pay you the full Statutory Royalty Rate.. they will negotiate to pay 75% of the rate..


hope this information helps...

[bknot1]

Originally Posted by Change of POETS

Ok, yeah.. I had my terms confused.

see i know you knew it...

[TelePaul]

Good post, keep doin them bro, they're really useful.

[Raticus]

this is an excellent post...
The statutory rate is normally used when permissions were not negotiated to mechanically reproduce music onto some type of media and the label still reproduces music for public distribution. The label will have to pay the statutory rate to the music publisher which will stand up in a court of law.... As Bk stated the label will always try to low ball on the mechanicals..

[bknot1]

Originally Posted by bknot1

so if you pressing up 1000 units sale royalties shoul look like this for a 12 track Album..

12 x $0.091 = $1.092 x 1000 = $1,092 payment

now some labels will want to have at 75 - 85% reduced statutory rate..

(85%)
12 x $0.07735 = $0.9282 x 1000 = $928.20 payment


see how they save money...
ALSO NOTE: Some record deal have a cap on song 10,11 or 12 so any songs after that your are pretty much doin them for free...(read your contracts)

thats it for today class..tune in next week for Q&A

I also forgot to mention..you will split that payment with other songwriters on the tracks..or whatever is your % you worked out with the Artsit or your publishing company...



damn i was slippin...

[Fyre]

Is there any reason outside of they want to make more money off you that labels dont want to pay out an artist or producers full Statutory Royalty?

[bknot1]

Originally Posted by Fyre

Is there any reason outside of they want to make more money off you that labels dont want to pay out an artist or producers full Statutory Royalty?

you need to have a strong entertainment lawyer to get them to agree to give you the full rate...its just something you have to to negoiate with what ever label you dealing with..

[Mindset]

Originally Posted by Fyre

Is there any reason outside of they want to make more money off you that labels dont want to pay out an artist or producers full Statutory Royalty?

For 1 reason only. Less money out their pockets = more money in their pockets. Just one way to cut costs. If I were put in that situation, anything that is supposed to be recouped, I would definitely request be a lot less if I were to take 85%.

[Raticus]

Originally Posted by Fyre

Is there any reason outside of they want to make more money off you that labels dont want to pay out an artist or producers full Statutory Royalty?

cuz they dont have to... it is not mandatory.. again stat rate only used when your not able to negotiate.....

[bknot1]

more info http://www.ascap.com/musicbiz/money-clauses.html

Music & Money

Controlled Composition Clauses

It should be mentioned that the per-song statutory mechanical royalty can be reduced under certain circumstances (for example, if the writer is the recording artist or if the record is sold as a midline, record-club, TV-only, special-products compilation, or budget album), in which case the royalty figures may be less than those mentioned above. However, such reduced rates are voluntary and occur only if the publisher agrees or if the songwriter is a recording artist and has to accept such lower royalties in the record company contract.

Here’s where things get complicated, so bear with us, and read carefully. Many agreements-the majority, in fact-contain language which provides that if the recording artist or producer has written or co-written a song, has ownership or control of a song, or has any interest in any composition on the album or single, the mechanical royalty rate payable by the record company for that composition is reduced. Such compositions are referred to as controlled compositions. Most contracts attempt to establish a 75% rate (specifically, 6¢, which is three-quarters of the 8¢ full statutory rate) for all controlled compositions. The figures are computed at the mechanical rate in effect at either (a) the time the recording is produced, (b) the date of the recording contract with the artist, (c) the date that a particular album commenced recording (or should have commenced recording per the contract), or (d) the date the recording is originally released (regardless of whether the same recording is released again at a later date in another album).

In other cases, the record company will establish a maximum aggregate mechanical penny royalty limit for an album (for example, 10 songs x 6¢ = 60¢ per album). In a sense, a cap on royalties. Under these clauses, the artist or producer guarantees that he/she will secure reduced mechanical rates on all songs on the album so that the maximum penny rate (e.g., 60¢) payable by the record company to music publishers and songwriters for all songs is not exceeded. If this maximum aggregate album-royalty rate is surpassed-for example, if the writer/artist wants to put 12 songs rather than 10 on the album- the difference is normally deducted from the artist’s or producer’s record, songwriter, and publishing royalties, or, the per-song royalty rates for the writer/artist or writer/producer will be reduced proportionately.

Now, let’s take a look at how this arithmetic affects a specific situation: Let’s say that the writer/ performer has a 10-song x 6¢ maximum royalty rate on his/her album (in other words, 60¢ total) and, instead of writing all 10 songs, writes only eight and records two songs from outside writers who demand the 8¢ statutory 2002-2003 rate per song. In this case, the mechanical royalties would look like this:

60¢
album-royalty maximum payable by record company

- 16¢
two outside songs at 8 ¢ each

44¢

/ 8
the number of artist-written songs

5.5¢
per-song royalty to artist/writer and publisher



As you can see, the writer/artist’s mechanical royalty has been reduced to 5.5¢ per song from 6¢ per song due to the inclusion of two outside-written songs on the album. By the same token, as the writer/artist records more outside-written songs, the artist’s per-song royalties for his/her own works will be further reduced. Sometimes, in fact, when a writer/artist has recorded a substantial number of songs by other writers, he/she has been put in a position of receiving no royalties for his/her own songs, since the aggregate album-royalty maximum has been paid out to outside songwriters and publishers. Ouch! But it can get even worse. There have actually been instances in which the writer/artist’s mechanical royalties have been in the minus column for every album sold because of the operation of these controlled-composition clauses. Additionally, the era of multiple remixes has given rise to a clause which provides that the writer/artist will only receive a mechanical royalty for one use of his/her song regardless of the number of versions contained on the single or album.

[Fyre]

if the recording artist or producer has written or co-written a song, has ownership or control of a song, or has any interest in any composition on the album or single, the mechanical royalty rate payable by the record company for that composition is reduced.

so that means the more you do the less u get paid? or am i reading it wrong?

the writer/artist will only receive a mechanical royalty for one use of his/her song regardless of the number of versions contained on the single or album.

so If I remix a song on my album with or without other people even tho i write another verse as long as I use the same beat and call it the same thing I only get royalities off one of the songs?