Quote:
...Contributing Artist Shares. If any RECord or Non-RECord Contribution you have Posted or provided to hitRECord is part of a Final Product that has been distributed, commercialized, and generated Profits (or, in the Operating Committee’s determination, other tangible benefits) for a Contributing Artists’ Profit Pool (defined below), then the Company will notify you via electronic mail to the address associated with your account of the Contributing Artist’s Share (defined below) that has been conditionally granted to you following monetization. We say conditionally because you are not entitled to any allocation of a Contributing Artists’ Profit Pool unless you meet the requirements for a Participating Contributing Artist, as defined in Section 2.a.i below. As set forth in the Terms, you are welcome to comment on the Contributing Artist’s Share that you and others have been conditionally allocated within the Contributing Artists’ Profit Pool (e.g., make a case for a different percentage, notify the Operating Committee of any omissions in attributions to your RECords, etc.) for a Final Product, provided that the Company may accept or reject any different allocations suggested in any comments and change the allocation of the Contributing Artists’ Profit Pool among all Contributing Artists for a Final Product in its sole discretion and at any time during the period in which the Company specifies for the determination of the Contributing Artists’ Profit Pool, which in no case will be less than two (2) weeks from the date that the Company first notifies the Contributing Artists for a Final Product of their respective Contributing Artist Shares. The date on which the Operating Committee finalizes the Contributing Artists’ Profit Pool is the “Allocation Date.”
Quote:
Each Contributing Artist to a Final Product will be deemed a “Participating Contributing Artist” and will share in an applicable Contributing Artists’ Profit Pool provided he/she:
has accepted the Terms;
complied with the Submission Guidelines;
Posted a RECord or made a Non-RECord Contribution to hitRECord that is included in a Final Product; and
Provided sufficient identifying information to enable the Company to pay him or her before the close of the period specified in Section 1.a.ii, which at a minimum includes full legal name, valid physical address, and any tax information required by applicable law (“Requisite Payment Information”).
Quote:
The “Contributing Artists’ Profit Pool” from a Final Product will mean:
fifty percent (50%) of the Profits (defined below) from a Final Product that has been distributed and commercialized, if any, and
any amount the Company allocates to Contributing Artists for:
products sold or licensed, or tangible expressions that serve as an inspiration for the sale or licensing of a derivative work of a product to third parties for distribution (e.g. on any form of linear or on-demand television), or
amounts negotiated by the Company for allocation to Contributing Artists as part of a line item in an approved budget for any usage of the Final Product.
Subparts (i) and (ii) of this Section 2(b)(i)(1)(b) are the “Discretionary Profit Pool”.
Retained Profits. The Company will retain the remaining 50% of the Profits, if any, in the case of Section 2(b)(i)(1)(a), and any proceeds the Company receives from any third party, such as a television distribution partner, whether directly or indirect, minus the Discretionary Profit Pool, in the case of Section 2(b)(i)(1)(b) (the “Retained Profits”). Because there are unlikely to be Profits for many distributed Final Products due to the high cost of production (e.g. for television), the Company will seek to obtain amounts for the Discretionary Profit Pool through negotiations with distribution partners. This may include specific, budgeted line item amounts that will be dedicated entirely to Contributing Artists or specific fees for the Use (as defined below) of a Final Product, whether alone or as part of a larger work. These amounts are likely to vary over time and be subject to the vagaries of arm’s length, free market negotiations.
Quote:
Participating Contributing Artists for a Final Product will be entitled to a share of the Contributing Artists’ Profit Pool as the Operating Committee will award in its sole discretion. The Operating Committee will make its determinations following the acceptance of feedback from the hitRECord community of Users. The comment period will be open for not less than two (2) weeks but may be kept open for longer periods in the Company’s sole discretion. The Company will identify the duration of the comment period for a Final Product when it first notifies the Participating Contributing Artists to that Final Product, subject to any extensions identified in the immediately preceding sentence.
Notwithstanding any other provision of these Monetization Terms, if one or more Contributing Artists for a Final Product have failed to provide the Company the Requisite Payment Information by the Allocation Date (an “Unpayable Contributing Artist”), then any conditional allocation made to those Unpayable Contributing Artist(s) will be set aside until the earlier of (i) the date on which he or she provides the Requisite Payment Information, or (ii) the third anniversary of the Allocation Date. If those Unpayable Contributing Artist(s) do not provide the Requisite Payment Information by the third anniversary of the Allocation Date, then any conditional allocation made to those Unpayable Contributing Artist(s) will be deemed null and void and the Company will retain that conditional amount for use in paying contributors in future community projects.
Quote:
Minimum Balance Requirements. Distributions of a Contributing Artists’ Profit Pool for a Final Product will not be payable until the minimum balance of the Contributing Artists’ Profit Pool is equal to or greater than Five Hundred Dollars ($500.00) (the “Minimum Profit Pool Balance”). Once the Minimum Profit Pool Balance is achieved, all Participating Contributing Artists for that Final Product will be eligible for a distribution equal to their Participating Contributing Artist’s Share; provided, however, that no Contributing Artist will be entitled to receive payment of his/her Participating Contributing Artist’s Share until he/she is owed at least Five Dollars ($5.00) in Distributable Contributing Artist Profits (the “Minimum Distribution Balance”). We have to impose this limit so that the cost of distributing the Contributing Artist Profit Pool does not consume Distributable Contributing Artist Profits.
Quote:
Delays in Distributions. Each Participating Contributing Artist acknowledges and agrees that the Company is a small, start-up company and that distributing Distributable Contributing Artist Profits to Participating Contributing Artists can be labor intensive, time consuming, and expensive. We also want to make sure we get it right – which, in and of itself, is a difficult and time-consuming process. Each Participating Contributing Artist therefore agrees that the Company may suspend a distribution of Distributable Contributing Artist Profits for up to two Semi-Annual Periods if the Company is not reasonably capable, in light of its then-current resources, of making a timely distribution. A determination of reasonable capability will be made, if ever, in the sole discretion of the board of directors of the Company. Any temporary suspension of distributions pursuant to this Section 2(d)(x) will result simply in a temporary carryforward of any Distributable Contributing Artist Profits account balances, which will eventually be distributed to you in accordance with these Monetized Final Product Terms. In the event the Company delays the distribution of Distributable Contributing Artist Profits pursuant to this Section 2(d)(x), the Company will notify the Participating Contributing Artists allocated a portion of the Distributable Contributing Artist Profits subject to delay by electronic mail to the e-mail address associated with each such Contributing Artist’s account, and each Contributing Artist hereby consents to receive such notification via electronic mail. hitRECord may also provide notice by posting a message on hitRECord, such notice to be in addition to – and not a substitute for – notice by e-mail.
figured I'd post some of the interesting stuff from their "agreement" as an FYI.
Man... my laywer would have a field day with this. LOL
Here's one for everyone to ponder... throughout this entire agreement they only ever refer to "profits, if any, ..." They are never giving any of the content creators 50% of any actual licenses or gross revenue. They only give 50% OF THE PROFIT, after any and all company expenses have been deducted... which is complete
[email protected]#$. They didn't make the content, they didn't have to pay for the equipment and the musicians to create the music. all they are doing is creating a portal through which to share your music and then they are going to "try" and license it for you.
With companies that split licensing, they do just that, they split the licensing, not the profits.
who is to say how much the company's operating costs are? The content creators don't get a say in that. If Gordon and the other execs are taking high 6 figure or 7 figure salaries at some point, that is part of the operating costs... so tough to the content creators, all of your licensing goes to pay their salaries... if there is anything left, THEN and only then do you get HALF of it (not even all of it!) So not only is this company taking all of your money to pay themselves... when there is excess money left over, they take an additional 50% for themselves and you are left with the remaining 50%.
Let me give you a cost' breakdown of how this works... A license for TV and film is around $1000.
Let's say they get 1 license a day for the next 180 days... that is $180,000. Yay! The company has 22 full time staff in the Los Angeles area. 22 staff with an average salary $50,000 (that is say $25,000 for entry level employees and over $100,000 for President and other execs). That is $1.1 Mil a year... or $525,000 every 180 days. then you have an office space to house 22 people, which will cost anywhere from $10k to $20k a month in LA... so lets say $15k. So that is an additional $90,000 for six months. Then you have server and hosting costs, internet costs, etc which can all add up to about $5000~$10,000 per month. so let's say $8000. That is $48,000 in 6 months.
Total rough overhead for the company in a 6 month period is probably around $663,000. How much licensing is needed to pay for all that? That's about 3 or 4 licenses a day... probably more because they will probably license stuff waaaay below market value because they think they can "gain credits" by doing so. So it will take them 10 licenses a day or more just to stay afloat... all the while you, as the content creator making the stuff they are licensing... gets $0.
Now... once they do pass the $633,000 in six months mark revenue wise... THEN profit starts kicking in. So if they make $700,000 in a six month period... then there is $67,000 in profit... wahooo!!! Oh wait, the company then takes half of that too!... so there is $33,500 in the "profit pool" to then be split between the thousands (or 10's of thousands) of people who's intellectual property just earned $700,000 in revenue....
and then the company decides how much your share of the 50% should be. You can contest it but there is nothing binding the company to listen to you instead of listening to someone else. And in the comments for the intellectual property, anyone can comment on what they think the splits should be, not just the interested parties. So someone could come along and say your contribution isn't valuable and the company can decide to go with that instead of your claims. So maybe you are Aloe Blacc and you write the song "Wake Me Up" and post it up on the site. A DJ named Avicci comes along and just adds a house kick drum to your song and puts a filter sweep across it in one point... that is it. But now because some idiot in the forum says they feel the kick drum really makes the song, you are deemed to only get 10% of the 50% profit while Avicci gets the other 40% because, hey, someone in the forum said the kick drum really makes the song and the committee at the company saw that and agreed with it... so the fact that you wrote the lyrics, melody, chord progression, tracked all the instruments and sung on it yourself means nothing to them... congrats on your 10%!
And then you can't even get paid until each piece of intellectual property has accrued $500 in payouts... and even then the company can decide to delay your payment for up to a year.
Wow. that sounds like a great deal to me!
To each their own, definitely enter at your own risk. I don't care who is associated with it or how much they have been paid off by a VC firm to be the spokesperson for the company... the devil is in the details. And the details for this company do not look that good.
And just as a final note... people get very emotional and very aggressive when it comes to percentage splits of intellectual property they have created. It has even created some of the most deadly feuds in the music business (Tupac and Biggie hated each other because they couldn't agree on splits for a song they wrote together... they actually started shooting at each other over the mixing console in the control room. True story). And now some arbitrary company is going to tell you how much your creative vision is worth AFTER THE FACT?!?!? That is messed up. just my opinion.
23rd June 2018
Well, it is instantly suspect, as you have already experienced.
