Posted by Mr. Q at 6:00 AM Thursday, March 28, 2013
By the numbers. A second concern is whether the deal makes financial sense. If the production company owns the studio, chances are good that the producers will be liberal about billing you for recording and producing costs -- expect charges of $10,000 to $20,000 for a complete album (and it could be much higher). You would have to recoup all of this income (and perhaps more) before you see a dime. If the company is shopping your recording to a label, then you will probably end up receiving even less because the production company will end up getting 12% to 20% of the net income from record sales from the label (and your 50% would come out of that). Nowadays, it's pretty tough to earn $10,000 or more on a recording. Professional musicians indicate that sales are down so dramatically, that they account for less than 6% of a musician's income. (BTW, the average professional musician in the U.S. earns about $34,000 a year before expenses.) So before you sign away rights, you may want to consider whether you can accomplish a cool recording on your own ... after all, many great recordings were made using homegrown studios.
"Yeah, yeah, but otherwise I can't make a record ..." Yes, we know that the production company is taking a risk devoting their time and energy to make a recording. So, we can understand their desire to acquire rights and make money. So if you're going ahead with the deal, we think you should look for some safeguards. Keep in mind, there are two sets of rights at work here -- song copyrights and sound recording copyrights. We can understand having to give up on sound recording copyrights but we'd like to see you retain as much of your songwriting copyright as possible. Read up on music law and copyright, or talk to an attorney, and see if you can set up a co-publishing arrangement. Can you get rights back to your songs based on time (say five years), lack of sales, or failure of the company to get a deal? Can you cap or control recording costs? Can you control any other deductions made before you get paid? We could come up with other questions but it's time for us to play some Words with Friends.
Related info: Ten Tips for Songwriters