Standard for Recorded Music
fair music standards for recorded music (Version 3.0)
Preamble
- Contract wording needs to be clear and understandable
- Clear separation between contracts (AC, MP, publishing etc.)
- Both contract partners have to deal fairly with each other
- Well founded variations of several standards can be decided by the licensing committee
- In case of multiple right contracts, the balance of benefits and equivalents has to be clearly illustrated
Annotation:
Artist (exclusive) contract (AC)
Master recording purchase agreement (MP)
- Master recording purchase agreement with artistic producer (MPp)
- Master recording purchase agreement with featured artist (MPa)
Approval Communication Agreement (ACA)
- The parties agree on a legally valid communication channel (eg email, mobile number, ...) which, in cases requiring approval, guarantees a rapid location-independent implementation within the defined time period. valid under this way a non-response as consent.
Legend:
! = Exclusion criterion
+ / ++ / +++ = Bonus points (weighting)
- / -- / --- = Negative valuation (weighting)
I. Transfer of rights
- No concession of (musical) publishing rights in countries with copyright regimes that do allow seeking transfer of rights without a reference to a royalty share (no work for hire without success share)
Weight: !
Comment: to reinforce this worldwide, the standard must address the world's strictest laws (europe), otherwise it would violate the local legal order. essential sustainable remuneration model for creative professionals
- Collecting society’s proviso: Rights exercised by collecting management organisations (collecting societies etc.) are not topic of the contract (reproduce, distribute, transmit, public performance, communicate to the public)
Weight: !
Comment: removing such rights would weaken the collective rights management in the system of collecting societies. history has shown that only collectively recurrent creative professionals are able to assert their rights
- Entire transfer of rights (even for single recordings), arrangement and adaptation (eg ringtones), synchronization, advertising (also on phono records), multimedia and computer games, needs approval by the artist, except advertising and promotion of the artist, producer, label and phono record. A “black & white list” (do's & don'ts) should be part of the contract.
ACA: 2 calender bank days
Weight: ++/--
Comment: It is an important aspect to copyright, large range of possible agreements
- Usage (compilations etc) including the contractual recordings that might interfere with Ideological issues (ethic, political, religious) need approval of the artist. A “black & white list” (do's & don'ts) should be part of the contract.
ACA: 2 calender bank days
Weight: +++/---
Comment: not necessarily standard, but would be very fair and desirable
- No transfer of ancillary rights (e.g. on names, pictures, brands, domains), if not necessary to fulfil the contract
Weight: +/---
Comment: It should be a standard because it concerns the personal rights of creative workers - if not met, strong negative valuation
- The artist website belongs to the artist even if operated by the label (with audio samples and lyrics) and it is the artist’s right to use content of the company’s artist website that refers to the artist for his own website after the contract has expired. The artist website must not be used to promote third party products without the artist’s approval.
Weight: +/!
Comment: is already a widely used standard, deviation would be a severe limitation of the self expression possibilities of creative workers. Main focus here is on the artist domain name, specific product domain names referring to back catalogue can stay with the label as long as it holds the rights for such back catalogue titles.
- MP only: explicit contractual duty to release all contractual masters (ie including options) within a maximum period of 6 months and a minimum exploitation plan (initial pressing quantity, promotion plan, types of platforms) is agreed on.
Weight: not fixed: ! / more than 12: -- / more than 9: - / less than 6: +
Comment: Publication is actually subject matter of the contract!
- AC only: The contract includes an explicit release commitment and the release plan for the first 12 months. In case of non-fulfillment artist can buy contractual recordings at a price not exceeding the unrecouped proportion of the actual recordings costs of the master.
Weight: not fixed: --- / more than 12: -- / more than 9: - / less than 6: +
Comment: Publication is actually subject matter of the contract!
- Sound carrier proviso: if no production is announced or agreed on a specific carrier (physical or digital), the right to produce that specific carrier falls back to the artist after 12 months (from release date).
Weight: +
Comment: some sound carriers (physical and digital) now only are serving niche markets (e.g. vinyl).
- MP only: If the label does not succeed to release the contractual master in a certain territory within 18 months and 6 months additional respite, the right to release the contractual master in this certain territory as physical product falls back to the artist (the availability through web-stores does not count as release in a certain territory).
Weight: non contract: - / more than 18: neutral / 18: + / less than 18: ++
Comment: or as another option - the label obliges to accept usual market license offers.
- In case of catalogue deletion the right to release physical products of the contractual master falls back to the artist
Weight: +/-
Comment: other option - the label obliges to accept usual market license offers. Deletion is often economically viable - but from the perspective of creative workers, the availability of the work could be of great interest
- No mandate for contract partner, to act legally in the name of the artist
Weight: if mandate is included: --
Comment: depending on the case, it should be allowed to choose legal representation
- No money for nothing: merchandising, publishing, agency-and acquisition rights as well as right over tours and management: the balance of benefits and equivalents has to be clearly illustrated. The artist has the right to choose other partners for several of these purposes (multiple right deals only if specific services are provided for each subject of the contract).
Weight: +/--- (depending on the scope of the included rights and sum of the respective interests)
Comment: comprehensive evaluation has become increasingly important for all, given rights have to face a corresponding specific benefit. Ideally there are separate contracts for different revenue streams.
- Selection and order of titles, artwork: collaborative decision process
ACA final agreement - 1 week
Weight: ++/--
Comment: artistic self-determination is an important commodity
- Exploitation of unknown types of use needs to get negotiated and in case of dissent the share of exploitation will be 50/50 of the net income.
Weight: -- / if included neutral
Comment: if the types of use are a technical development of existing evaluation models, it should be included the allocation formula for further developments have to be newly negotiated - and completely new recovery models that can not be seen as further developments have to be newly negotiated in the contract no particular benefit if this point is not included in the contract. If the necessity for a rational regulation is given, this rating should promote a contractual differentiated regulation
- No transfer of rights that do not exist at time of contract.
Weight: +++/---
Comment: This is widely practised but not desireable.
- Limit on how long rights can get assigned or licensed.
Weight: licence: + / assignment: neutral
max.15 years: +++ / max. 25 years: ++ / full length of copyright: - / longer than copyright: -- / perpetual: ---
Comment: Assignment is not adviseable but many artists prefer to sign away their rights if they get a high enough one-off payment. Too long running times should be avoided.
II. Exclusivity
- Personal exclusivity (AC only & MPa only): Exceptions as studio musician, producer, actor, guest appearances and as a featured artist with a clearly seperated distinct brand.
Weight: ---/+
Comment: is a major limitation and can be e.g. a major part of studio musicians income important for personal freedom and self-realization as an artist
- Re-recording restrictions: 7 years maximum after release or 3 years after the end of the term
Weight: shorter than 7 or 3: + / 7 or 3 = neutral / more than 7 or 3: -- / more than 10 or 5: ---
Comment: too long contract bonds should be avoided
III. Duration
- No (fix and/or optional) engagement of the artist beyond five years,
Weight: shorter than 5: + / 5 = neutral / more than 5: -- / more than 7: ---
Comment: This point does not affect the evaluation of a master but the bond of the artist to a company
- no option warning clause
Weight: -
Comment: the drawing of options should be a deliberate choice of the labels and can be self-planned
IV. Costs
- MP only: Need for production cost agreement, also for further contractual productions. Artist’s investments have to be recognized as recouping factor at reasonable out of pocket cost level – the same applies for both contract parties.
Weight: artist investments not recoupable: - / no agreement: neutral / artist investments recoupable: ++
Comment: it should not allowed that only one contractor can deduct costs
- Video, remix etc: No charging of reasonable out of pocket costs without his explicit approval and with a maximum deduction of 50% of the costs.
ACA: 2 calender bank days for short-term marketing activities, 7 days for remixes, video etc. ...
Weight: if both are fulfilled: + / more than 50%: - / no consent and more than 50%: !
Comment: whoever pays should be able to co-decide
- Advertising, promotion: Advertisment and promotion are the costs of the label. costs of the artist for these purposes shall be non recoupable.
Weight: ! in case of recouping
Comment: In case of royalty share deals only. In case of profit share deals, see above.
- MP only: Clear deviation from label standards concerning packaging and market entry price need announcement before signing of contract or prior approval by the artist.
ACA: 7 days
Weight: -
Comment: and packaging can be an important decision criterion for artists
- No cross collateralization outside of the contract
Weight: ---
Comment: against the subject of the contract and transparency of the settlement
- Free copies of physical product: at least 25 free copies for the artist or 5% of the quantity if pressing below 300.
Weight: less than 25: - / 25 or more: +
Comment: mostly standard
- Purchase of physical product for own sale by the artist at concerts at cheapest wholesale price
Weight: + cheaper than wholesale / --- more expensive than wholesale price
Comment: Concert sales are an important source of income for artists and labels
- Sell-off (physical product) at low-price: buying option in advance for the artist. In case of scrapping - purchase of cost of mechanical price plus reasonable handling costs.
Weight: -
Comment: good for both sides - a sell-off or scrapping is often percieved by the artist as a degradation of the work
V. Royalties
- Basic principle: comprehensible and transparent sharing rules
Comment: understandability is a basis for a fair contract design - often complex compensation models
- Commercial model: percentage sharing needs to be illustrated transparently (with concrete examples that deal with standard figures at the time of contract signing). Minimum share of the artist at least 20% of PPD without further deductions.
Weight: more than 20%: ++ / concrete examples: + / below 16%: -- / below 10%: ---
Comment: 20% of PPD equals app. 10% of retail price, to be used when communicating in public.
- Alternative: Cooperative model: Fifty-fifty share of net income after break even of the release without cross collateralization beyond the record deal; no deduction of the label’s or artist’s in-house efforts
Weight: +++
Comment: a deviation from the 50/50 share can be covered with highly unequal distribution of risk or effort. exemplary model
VI. Accounting
- Semi-annually, within 90 days, payment within 14 days after billing.
Weight: quarterly: + / semi-anually: neutral / annually: -
within 90: neutral / less than 60: +
- Minimum transfer amount: € 25
Weight: over 50: - / under 25: +
- Attachment of copies of the accounting basis on request
Weight: +/-
Comment: To ensure transparency
- Returns reserve 25% maximum, needs to be liquidated over the next two accounting periods, no reserves on digital income.
Weight: more than 25%: - / more than two periods: - / reserves on digital: !
Comment: higher returns are not common
- Absorption of auditing costs in case of deviation of 5% or more
Weight: auditing at source: +++ / 5% or less: + / more than 5%: - / if this is not taken: --
Comment: To ensure transparency
