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Thread: Distribution

  1. #1
    Join Date
    Nov 2000
    Belfast Ireland
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    I have been in contact with a record lable that specialises in compileation albums, in the past they have distributed some of my songs, taken from my previous recordings of Irish song's with an other record lable.

    I have asked them if they would consider distribution of a new album, I have been working on independently, to be released early next year.
    They replied saying, they do not deal with finished items.
    And deal only with established lable's.
    But they would consider a licence of albums for their own lable.

    Has anyone came across this sort of thing before. What do they mean by licence, and what do you think would be the best way to aproach this situation
    Any advice will be greatfully received.
    All the best John.

  2. #2
    Join Date
    Mar 2000
    Columbus, OH, USA
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    What they seem to be saying is that they do not want the "obligation" of having you on their roster... This would require them to pay for the studio time and other upfront costs associated with having an artist on your roster. They may simply have limited resources or may just not have the time to invest in an artist (marketing, imaging, finding songs, etc..). By a license, they simply want the rights to distribute the CD through their ordinary distribution channels. It's actually a win/win for both parties. You the artist, get total creative control and the label gets to put out a project with less upfront costs than they would have had if your were their artist.

    Just a few points to clear up about a license:

    1. You should require that they pay you an upfront license fee. This is because you spent your money and time for the recording. They are coming in at an inexpensive point in the game (no recording costs, no artist advance, etc), so you should charge a flat fee to cover your upfront costs and an additional sum for their good faith pledge to put the CD out. That way, they have a financial interest from the beginning and would be motivated, financially, to atleast try to make their money back from the upfront license fee. Don't set this amount too low, because "upfront money" is usually the easiest money to get. Many labels are notorius for charging Artists or Licensors for all sorts of costs that leave the Artist or Licensor with little in terms of royalties, so price the upfront fee for what it's really worth. It's generally not a good idea to give someone else rights to distribute/sell your music without SOme sort of upfront financial commitment.

    2. You should alse require a royalty (a certain percentage based on sales). They will likely offer you a royalty similar to the typical artist royalty. This is where you have to play it by ear, according to how interested they are in your project. A non-insulting artist royalty rate will generally start at about 12-14% of the retail price that is set by the manufacturer. This can go as high as 19-20% for really hot projects or artists. Use your own discretion.

    3. You can grant either an Exclusive or Non-exclusive License. This is your call. An Exclusive would give them the sole rights to distribute the CD (for a stated, limited time) and would restrict you from licensing the music, simultaneously, to another label. A Non-exclusive would allow you to license the project to multiple labels or distributors. Obviously the upfront License Fee for an Exclusive should be higher than that of a Non-exclusive, because you are grantng an Exclusive Licensee the sole right to put out your work! This is big potatoes, because if they DOn't do right by you, your music could be tied up in nonsense litigation or other red tape while you sit with nothing. So price it right! (see also #1 again)

    4. You should have a reversion clause built into the agreement. A really good idea is to license the material for a limited time (e.g. a 7 year period, with the label having to pay you a guaranteed minimum fee each year --- even if the accrued royalty does not add up to it, remember they have the rights to your music, make them pay rent to keep those rights!!! It's Big potatoes when someone has rights to use your stuff!! OR consider a shorter term, 2 years, with a smaller annual fee and upfront fee). Either way you go you should also require them to put the CD out by a certain period of time (e.g. 6 - 12 months)

    5. Specify that even though they terminate the license, which they should be allowed to do at anytime, that they must pay the annual fee for that calendar year. That way, they are forced to figure out each year if they really want to hold your music, since their would be a financial penalty for holding the music and releasing it mid-year, without making money from it.

    6. Deal, deal, deal!!! Even though, you may know these people from having done business with them in the past, make a good business deal based on good sense... and see a lawyer or a knowledgeable individual!

    Rev E

    [Edited by Rev E on 11-28-2000 at 11:15]

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