What to charge for songwriting/production?
josh g
Thread Starter
#1
2nd May 2012
Old 2nd May 2012
  #1
Gear interested
 

Thread Starter
What to charge for songwriting/production?

Hey all - I've got a project coming up composing and recording some kids' educational songs for an international school. They're going to put them on discs and sell them along with the corresponding textbooks. I'll be meeting with a rep from the school soon to discuss the pricing (and hopefully come to a happy agreement).

The production is relatively simple - mostly MIDI instruments with some guitars and vocals. We will be composing all the music and lyrics based on the content of their textbooks. All the work will be done by my partner and I, so there will be no additional costs (i.e. studio time, additional performers etc).

We've done some work like this in the past on a "work for hire" basis, but want to get away from that so we can collect royalties. What would be a reasonable royalty rate to charge them for this? I know the statutory rate is $0.091 per song up to 5 minutes (all of our songs would be about 2:30), but since we're also creating the master recording as well, I'm not sure if we should be going for a higher rate. The school has quite a few branches, so they should be selling several thousand copies of each song every year.

I'm still pretty new to the whole concept of making money off my music (after spending many years making nothing off it), so any advice would be greatly appreciated. Thanks!
#2
2nd May 2012
Old 2nd May 2012
  #2
Lives for gear
 
Amber's Avatar
 

Might be better to do a work for hire agreement and base your price on that and forget about royalties.
#3
2nd May 2012
Old 2nd May 2012
  #3
Lives for gear
 
Etch-A-Sketch's Avatar
 

No way... ALWAYS go for royalties!!! 20 years from now you can still be making money off these books. Otherwise you are basically giving the royalties back to the people hiring you.

Doing a work for hire agreement doesn't automatically mean you give up your royalties either. I do work for hire agreements all the time in TV and Film and I still retain my writer's and sometimes my publishing. Work for hire only means they own the masters. It doesn't automatically mean they own the underlying work. They can specify that they own the underlying work in the contract, but you don't have to agree to that and can ask for that to be removed.

As to how much to charge... it's really up to you. You have to sit down and look at how long it will take you, how much it will cost you, and how much you value your time. Try to come up with a bare minimum number as well as number that you would be happy with.

Since this is a negotiation, you can start with the higher figure and keep cutting the number down, but never go below your bare minimum number. Also, as you cut the number, start asking for things to compensate for the lost in income up front.

If I were you I would at least talk to an entertainment attorney. Most of the time with text books you license the music based on units sold. When I did music for the Digidesign coursebooks that is how it worked. For every so many thousand sold, you get "x" amount of money. But in those deals there is usually no money up front except the money to cover the first license (the first however-many thousand sold).

If they are paying you money up front, you can make that residual license smaller. The less they want to pay you up front, the higher the license fee (per unit sold) goes. And so on.

The things you need to know is how much do they charge. how much do they make off it. how many do they sell every year. Based on that it will kind of tell you what you should do.

But, whenever money is involved... hire a good entertainment attorney. Otherwise you are screwing yourself over and losing money. Out of all the lessons I've learned in the music industry, that one was the most important (and most painful) to learn. The two most important people in your business life are your Entertainment Attorney and your Tax Attorney (or Accountant). Don't trust your livelyhood to advice on internet forums. Get advice from a good entertainment-specific attorney that really knows the ins and outs of the business. So many people screw themselves over in so many ways because they don't consult with or have an attorney that specializes in the field they work in.
#4
2nd May 2012
Old 2nd May 2012
  #4
Lives for gear
 
Amber's Avatar
 

I wouldn't usually mention the work for hire idea but how would one go about collecting royalties of something like a school text book with very little circulation? A clause in the contract for the school to pay for an audit should you request it?
#5
2nd May 2012
Old 2nd May 2012
  #5
Lives for gear
 
Etch-A-Sketch's Avatar
 

Quote:
Originally Posted by Amber View Post
I wouldn't usually mention the work for hire idea but how would one go about collecting royalties of something like a school text book with very little circulation? A clause in the contract for the school to pay for an audit should you request it?
Well, most businesses, especially schools, have accounting procedures in place to track the sale of retail items. Every school book store can tell you EXACTLY how many copies of each text book and workbook were sold every quarter, for every school year. They have to. Otherwise they wouldn't know when to order/press more.

That is why the licensing agreement works best. It's very similar to CDs. If they know they will sell 1000 every year. They might press 3000 (to cover them for three years). Your licensing agreement might state you get $1000 for every 1000 pressed. So in the initial pressing, you get $3000. When they go to press more, they pay you again. If anyone has ever tried to press CDs with all cover songs on them, you will know the CD pressing plant will NOT press the CDs for you until you have a letter from Harry Fox saying you've already paid the mechanical licenses for all the songs included in that pressing (9 cents per song per disc). Book publishers are the same way. The company pressing the product can get fined for making it without the correct authorizations in place.

Also, in every contract (at least every contract I've done) there is an "Audit" section which always states that you have the right to audit and specifies how it will happen and who will be involved in the audit and who will pay for it and what fines are to be paid if the audit shows problems/discrepancies.

Which, again, is why everyone should have an entertainment attorney looking over the contracts they are doing. A real estate or divorce attorney may not know a music contract should always have an audit clause. They might not know you can retain ownership of the composition separate from the physical master. They might not understand that giving up your publishing is supposed to mean giving up HALF of the rights to the song, not all of the rights (as a writer you usually retain 50% (or more) ownership although you have no control over the music). And so on and so forth.

I see so many people get screwed so often because they don't have an entertainment specific attorney. Bands don't realize they can have no shelf clauses, no drop clauses, and key man clauses added to their record contracts to protect themselves. I see songwriters give up all their royalties unknowingly because they don't understand they can keep their writer's share even though they are giving up their publishing in a work for hire agreement... and so on and so forth...

Hunter S Thompson once said,

"The music business is a cruel and shallow money trench. A long plastic hallway where thieves and pimps run free, and good men die like dogs. There's also a negative side."

And he is right. The only people that protect us within the music business are our own lawyers.
#6
2nd May 2012
Old 2nd May 2012
  #6
Lives for gear
 
Jeff Hayat's Avatar
 

Quote:
Originally Posted by josh g View Post
What would be a reasonable royalty rate to charge them for this?
Hold on. Two things:

1) You can not charge a royalty rate. The rate is set by the Copyright Royalty Board. It is what it is.

2) Are you sure that this international school has a contract with your PRO? If so, make sure that the school is going to fill out the proper paperwork, and that they pay that PRO directly. If not, you won't be receiving any royalties.

Cheers.
#7
2nd May 2012
Old 2nd May 2012
  #7
Quote:
Originally Posted by Etch-A-Sketch View Post
No way... ALWAYS go for royalties!!! 20 years from now you can still be making money off these books. Otherwise you are basically giving the royalties back to the people hiring you.

Doing a work for hire agreement doesn't automatically mean you give up your royalties either. I do work for hire agreements all the time in TV and Film and I still retain my writer's and sometimes my publishing. Work for hire only means they own the masters. It doesn't automatically mean they own the underlying work. They can specify that they own the underlying work in the contract, but you don't have to agree to that and can ask for that to be removed.

As to how much to charge... it's really up to you. You have to sit down and look at how long it will take you, how much it will cost you, and how much you value your time. Try to come up with a bare minimum number as well as number that you would be happy with.

Since this is a negotiation, you can start with the higher figure and keep cutting the number down, but never go below your bare minimum number. Also, as you cut the number, start asking for things to compensate for the lost in income up front.

If I were you I would at least talk to an entertainment attorney. Most of the time with text books you license the music based on units sold. When I did music for the Digidesign coursebooks that is how it worked. For every so many thousand sold, you get "x" amount of money. But in those deals there is usually no money up front except the money to cover the first license (the first however-many thousand sold).

If they are paying you money up front, you can make that residual license smaller. The less they want to pay you up front, the higher the license fee (per unit sold) goes. And so on.

The things you need to know is how much do they charge. how much do they make off it. how many do they sell every year. Based on that it will kind of tell you what you should do.

But, whenever money is involved... hire a good entertainment attorney. Otherwise you are screwing yourself over and losing money. Out of all the lessons I've learned in the music industry, that one was the most important (and most painful) to learn. The two most important people in your business life are your Entertainment Attorney and your Tax Attorney (or Accountant). Don't trust your livelyhood to advice on internet forums. Get advice from a good entertainment-specific attorney that really knows the ins and outs of the business. So many people screw themselves over in so many ways because they don't consult with or have an attorney that specializes in the field they work in.
Excellent advice!
#8
2nd May 2012
Old 2nd May 2012
  #8
Quote:
Originally Posted by Jeff Hayat View Post
Hold on. Two things:

1) You can not charge a royalty rate. The rate is set by the Copyright Royalty Board. It is what it is.

2) Are you sure that this international school has a contract with your PRO? If so, make sure that the school is going to fill out the proper paperwork, and that they pay that PRO directly. If not, you won't be receiving any royalties.

Cheers.
Nonsense. The Copyright Royalty Board only has authority over royalties that are governed by statutory rates, like radio, webcasting, etc.

Book publishing royalties are not governed by statute. Neither is the royalty rate in a recording contract. Typically your royalty rate is inversely proportional to your advance, subject to your desirability to the company and the negotiating skill* of your representation.


*- and honesty - there have been cases of lawyers and managers being paid on percentage who negotiated for a higher than normal advance against a low royalty so they could pocket a big chunk of change up front.
#9
2nd May 2012
Old 2nd May 2012
  #9
Gear Guru
 
joelpatterson's Avatar
 

"Receiving royalties"... you mean like Will and Kate come to call?
#10
2nd May 2012
Old 2nd May 2012
  #10
Quote:
Originally Posted by Jeff Hayat View Post
Hold on. Two things:

1) You can not charge a royalty rate. The rate is set by the Copyright Royalty Board. It is what it is.

2) Are you sure that this international school has a contract with your PRO? If so, make sure that the school is going to fill out the proper paperwork, and that they pay that PRO directly. If not, you won't be receiving any royalties.

Cheers.
Nonsense. The Copyright Royalty Board only has authority over royalties that are governed by statutory rates, like radio, webcasting, etc.

Songwriting royalties are only subject to statutory rates AFTER the first public release of the song (legally referred to as "publication". Before the first public release (recording, print, or internet) you can charge whatever you can get for first rights. This is why serious writers generally don't put out their stuff on the Internet before it's released commercially. Oddly enough, I had a meeting with my music lawyer about issues related to this very subject just yesterday.

Book publishing royalties are not governed by statute. Neither is the royalty rate in a recording contract.
#11
3rd May 2012
Old 3rd May 2012
  #11
Lives for gear
 
Jeff Hayat's Avatar
 

Quote:
Originally Posted by John Eppstein View Post
Nonsense. The Copyright Royalty Board only has authority over royalties that are governed by statutory rates, like radio, webcasting, etc.

Songwriting royalties are only subject to statutory rates AFTER the first public release of the song (legally referred to as "publication". Before the first public release (recording, print, or internet) you can charge whatever you can get for first rights. This is why serious writers generally don't put out their stuff on the Internet before it's released commercially. Oddly enough, I had a meeting with my music lawyer about issues related to this very subject just yesterday.

Book publishing royalties are not governed by statute. Neither is the royalty rate in a recording contract.
Why, how very nice and tactful of you to call my post nonsense. You rock, dude!

I may have been wrong about point #1 - ok. Still doesn't make my entire post nonsense. You could have simply said that I was mistaken. But no - of course not! This is GS!
#12
3rd May 2012
Old 3rd May 2012
  #12
Lives for gear
 
Etch-A-Sketch's Avatar
 

Quote:
Originally Posted by Jeff Hayat View Post
2) Are you sure that this international school has a contract with your PRO? If so, make sure that the school is going to fill out the proper paperwork, and that they pay that PRO directly. If not, you won't be receiving any royalties.
PRO's do not pay out on these kind of licenses. They only pay for public performances of the music. It's no different than CD/DVD sales, PROs do not pay out on the sale of physical product. Only for broadcast/public performances.
#13
3rd May 2012
Old 3rd May 2012
  #13
Lives for gear
 
Jeff Hayat's Avatar
 

Quote:
Originally Posted by Etch-A-Sketch View Post
PRO's do not pay out on these kind of licenses. They only pay for public performances of the music. It's no different than CD/DVD sales, PROs do not pay out on the sale of physical product. Only for broadcast/public performances.
What I was figuring, but wasn't 100% sure.

Cheers.
#14
3rd May 2012
Old 3rd May 2012
  #14
Quote:
Originally Posted by Jeff Hayat View Post
Why, how very nice and tactful of you to call my post nonsense. You rock, dude!

I may have been wrong about point #1 - ok. Still doesn't make my entire post nonsense. You could have simply said that I was mistaken. But no - of course not! This is GS!
No offense intended. Sorry.
#15
3rd May 2012
Old 3rd May 2012
  #15
Lives for gear
 
Etch-A-Sketch's Avatar
 

Quote:
Originally Posted by Jeff Hayat View Post
What I was figuring, but wasn't 100% sure.

Cheers.
No problem. It can be really confusing and hard to keep track of. There are so many separate potential revenue streams for music it's hard to keep them all straight.

And this business changes so much so quickly that what was standard practice even 3 years ago could be totally irrelevant today. That's why I urge everyone to go out and find an entertainment attorney and have someone you can call. Even if you don't put the lawyer on retainer, just looking around and finding a couple of really good lawyers to add to your address book, and knowing what their forte(s) are, is really important. It could take someone a week to a couple months of research to find the good lawyers that deal with the segment of the music industry that they work in.

Most of the time when opportunity strikes you have hours or minutes, maybe a day or two to make the deal happen. There is no time at that point to start looking around and researching lawyers.

And it is really important to research them and find out what their strengths are. Most lawyers will say they can do anything, but will then subcontract out anything they can't handle or don't know anything about. Some lawyers specialize in copyright law, some in artist deals and record deals, some in TV and film deals for screenplay writers/directors/producers. Some deal with film composers more than anything else. Some have more experience dealing with actors and models than musicians, others mainly deal with book deals and books being turned into movies. And so on. So finding the right one is important. While I'm sure the lawyer that is Steven Spielberg's goto person is a great entertainment attorney, he/she might not have any experience dealing with multi-million dollar record contracts with Sony, WB, Interscope, etc. There are a lot of facets to the entertianment industry. So making sure the lawyer you choose has experience dealing with the facet you work in is really important. If you ever read "evertying you want to know about the music business" by Donald Passman he talks about that in there. He talks about how he completely messed up a deal for a model because he had no clue about that side of the industry, and stresses the same point i'm making, which is get a lawyer that knows the ins and outs of the type of music business you do specifically.

Anyway... I can't stress that enough.
josh g
Thread Starter
#16
7th May 2012
Old 7th May 2012
  #16
Gear interested
 

Thread Starter
Thanks for all the input. We've been considering talking to a lawyer for a little while now. It sounds like the right time.
Thread Tools
Search this Thread
Search this Thread:

Advanced Search
Similar Threads
Thread
Thread Starter / Forum
Replies
juicylime / So much gear, so little time!
37
nukmusic / Remote Possibilities in Acoustic Music & Location Recording
5
UrbinSprawl / Remote Possibilities in Acoustic Music & Location Recording
10
elambo / Remote Possibilities in Acoustic Music & Location Recording
5

Forum Jump
 
Register FAQ Search Today's Posts Mark Forums Read

SEO by vBSEO ©2011, Crawlability, Inc.