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Production Company
Deal, Record Company Deal - What's the Difference? Part 2: The Production
Deal, the Imprint Deal, the Joint Venture, and Pros and Cons of Recording
and Production Contracts
by Darcie-Nicole Wicknick
With the climate of the recording industry as
temperamental as the San Andreas Fault, dissecting and negotiating the
perfect deal can seem daunting: Traditional label deal? Production company
deal? Independent label deal? What’s better for burgeoning
artists whose mission is to gain a widespread audience for their music?
In Part Two, Darcie-Nicole Wicknick explains production deals, imprint
deals, and joint ventures in detail, plus some specific contract clauses
artists should be aware of.
Darcie-Nicole Wicknick is a freelance music
business consultant and the founder of AskDarcie Music Business Consulting.
She can be reached through her website at
http://askdarcie.tripod.com .
Now that we have some historical and theoretical background
on the various types of contracts out there, let’s do some more thorough
probing of the contracts that you may be faced with and some trigger points
to be mindful of before signing on the dotted line.
What I am about to tell you does not constitute or replace legal advice, and
I highly recommend that you read Don Passman’s book
All You Need to Know about the Music Business
and Mark Halloran’s Musician's Business & Legal Guide
before even setting up a meeting with your attorney.
The Production Deal
In the music business these days, many producers, songwriters and artists
are signing to
production deals with varied and sundry companies, large and small. As we’ve
examined in Publishing 101, how you assign your rights remains a critical
piece
of the puzzle when entering into a contractual relationship. A production
company, as we have discussed, is a hub where a production entity
establishes a
signature sound by way of songwriting and production techniques.
Oftentimes, a production company acts more like an independent label -
signing
its own roster of instrumentalists, songwriters, producers, engineers, and
recording artists. Whether the production company produces everything in
house
or books time at another studio (more common) is merely a semantic. More
important is that the company delivers product that has a consistent sound.
Many production companies are simply the business set up by one producer who
may
also be a songwriter. That person then licenses his or her recorded
instrumental
compositions for the use of artists who would then write their own lyrics
and
melody to the track. The producer may also be the person in charge of
overseeing
the entire recording process, and the two songwriters may then choose to a)
copyright their composition as a whole unit and share jointly in the
copyright
or b) license the contributed portions of the work to each other in a
non-exclusive or exclusive way, dependent on their professional
relationship. In
this scenario, the incoming artist or songwriter is not bound to the
company,
but rather working collaboratively or simply generating business for the
production company by hiring the producer’s services and licensing the use
of
his or her composition in the instrumental track. But sometimes a more
formalized relationship is developed.
Larger production companies, who carry a roster of in-house composers,
engineers, artists, and perhaps even producers, act more like an independent
record company than as a production house. In this case, artists and
songwriters
work exclusively for the production company, which then promotes and
delivers
the work of the artists and/or songwriters to the marketplace.
In the case of artists, the producer delivers his or her specific sound to
the
market by way of the artist(s). In some instances, as we will see later in
this
article, the production company has an established relationship with another
company, i.e. record label, to distribute the releases from the production
entity.
In some instances, the roster of songwriters, vocalists, and
instrumentalists,
simply record demos to shop songs to established artists in the industry for
potential use on their upcoming albums. In this case, the producer’s
instrumental tracks may be included on the song by the recording artist and
the
producer would appear in the final product but the producer’s singer or
rapper
would simply be recording the demo. In this situation, it is advantageous
for
singers and rappers to only serve in this capacity on a freelance (per-job)
basis rather than be signed to the production company exclusively.
However, in scenarios where the production company has an established
distribution channel and signs its own talent, the artists, songwriters, and
ancillary producers may decide to sign exclusively as talent to the
production company which is acting really as an independent record label in
and of itself...Because the company will be soliciting releases for the
talent on its roster, as well as promoting the songs and production sheen
from that particular arsenal. (More about ancillary producers in a moment.)
For songwriters signing exclusively to a production house, it is critical
that
you establish your own publishing company before signing exclusively to an
independent production company. (An important exception to this rule applies
to
those who are working for jingle houses in which case all of the jingles you
compose are considered works made for hire. You may, dependent on your
employment agreement, be entitled to a broadcast residual as well but the
rate
will likely be a small dividend).
However...If you are singing to a production company that has an imprint
deal
(which we will soon look at) whose label is affiliated with a very major
publisher (such as Warner Chappell, Warner Music Publishing, Sony, BMG, or
EMI for example), you may find it beneficial to establish a publishing
relationship
as a writer with that publishing company as well. (If you are a recording
artist who also writes, this may be your only tenable option, in
reality). In addition, you must absolutely subscribe to a performance rights
affiliation, such as ASCAP or BMI.
Additionally, be sure that your contract stipulates that you, as a
songwriter,
are entitled to your equal share in songwriting/ publishing royalties, and
that
you are credited in the liner notes for your work. Indicate that your
compositions are not copyrighted as a Work Made for Hire, but rather that
you retain co-authorship of songs you co-compose. If you serve also as a
producer, it will be necessary for you to establish in your contract that you
are entitled to a portion of the producer royalties on songs that you
co-produce which generate income from the licenses and sales of the master
recording as well. You also want to keep your term as short as possible, and
retain as much creative control as is possible within the parameters of
preservation of the sound of the
company.
For artists who do not compose, you should treat your exclusive contract
with
the production company as you would any contract with an independent label.
You
must ascertain at the beginning how many albums you are responsible to
deliver,
and how the company plans to release, market, and promote you. You must also
lay
out how royalties are calculated, what the company considers as an advance,
and
who is entitled to creative control over the content of your albums, your
image,
your name, and revenues from your life as an artist. Your producer should
not
serve as your manager.
Signing exclusive deals with production companies which do not possess
readily
evident professional leads and/or demonstrated success in placing songs with
major artists is a tentative decision at best. Be sure that you enlist a
qualified music attorney at the outset, before entering into any agreement
with
any company: one that will see the needs of the company and help you to
negotiate terms that are mutually beneficial.
The Ghost Producer or Ghost Writer
A common practice in the past couple of decades is the concept of the
“ghost”
producer or “ghost” writer. These are mutually exclusive terms applying to
two
separate copyrights. The ghost producer is a producer who is signed to the
production company and lends his or her services to the production of the
sound
recording. However, the caveat is that the headline producer pays a salary
to
the ghost producer(s) who then deliver product with no additional credit to
the
project. Similarly, a ghostwriter is one who composes music and/or lyrics
for a
song, to whom credit is assigned to someone else. In both models, the ghost
professional is working as an employee and his or her contributions would be
deemed as “works for hire” in the statute of the copyright filing.
This can be a dangerous prospect for any songwriter or producer. Not only
does
this method compromise entitlement to songwriting royalties (please see
Publishing 101 for reasons and loss
potential) but also leads to loss of
industry recognition of a new writer or producer and, in instances when a
record
reaches gold or platinum status or higher, the potential failure by omission
of
the Recording Industry Association of America (RIAA) delivering the plaque
to
the person, to which he or she is entitled. Songwriters should not
ghostwrite. It’s fine if the artist is credited in part to the
composition of the work, or even if the company publicizes the record as if
the artist wrote their own
lyrics, but to leave the songwriter out of the equation in entirety means
the
songwriter can never fully realize their earning potential.
For producers who ghost produce, there is a solution that will prevent them
from
losing RIAA Gold and Platinum plaques and industry recognition in the long
term:
simply insist that you are credited in some legitimate way. The most common
accreditation for ghost producers is as an engineer, co-producer, or
associate
producer. While this could limit your royalty claims, dependent on the
negotiation of your exclusive contract as an employee, at least you will
walk
away with something tangible that can build your leverage portfolio for
future
career endeavors. To leave yourself completely without credit is the
professional equivalent of working for a company that will never verify your
employment.
Subsequently, if you are not credited, and even if you are fortunate enough
to
have the written promise of verification of employment with the company,
without
liner notes bearing your name, the name recognition factor is eliminated.
So,
regardless of the terms that you agree to with your contract, be sure that
you
receive some kind of liner notes credit on all recordings for which you
provide
production, engineering, composition, and/or performance services of any
kind –
even if your actual participation is diluted. Remember: the superstar
producer
that you are working under is always going to take the lion’s share of the
credit. Just don’t let him or her leave you out.
The Imprint Deal and the Joint Venture
Many major production houses are very interested in the prowess of the
marketing and distribution channels afforded by signing with a
major record label or a large independent label. In this situation, when the
production company has a full arsenal of vibrant talent and radio-ready hits
waiting in the wings, the production company will often sign an imprint deal
or
a joint venture, with a major recording company. There are a few types of
deals
that the production company can strike: one is a joint venture for marketing
and
distribution of a pressed and ready package (which always includes standard
size
jewel case rather than slim case or paper slipcover case, four color
separation
artwork, CDs with on-CD printing, liner notes, UPC code, and catalog
number); a
press and distribution deal (in which the major label assists with the
creation
and duplication of the product and push to retail); and the distribution
deal
(which only gets the product to retail with no marketing or duplication
support).
With imprint deals and joint ventures, the major recording company and the
production company and/or independent company share in the expenses and
profits,
based on contractual negotiation of terms, for the project(s).
In addition, a major label will often offer two very different scenarios to
which the production company may agree. The first is more typical in a
marketing
and distribution deal and/or true imprint deal, which demands that the
production company deliver all of its masters and roster to the major record
label for addition to its roster. The drawback to this model, unless very
carefully crafted contractually, is that the label may not have to release
everything that the production company delivers.
Savvy production companies, particularly those with diverse rosters, will
strike joint venture deals with a major record company on an
artist-to-artist or
album-to-album (less likely) basis, as not to risk losing release potential
of
all of its artists. This becomes particularly important when the major label
wants to release Artists A and B but C, D, and E are in competition with one
of
their existing artists or not desirable roster adds for whatever reason.
Potentially, the production company may offer Major Label a first refusal on
Artists C, D, and E and then would be free to pitch them to another label.
Again, this is a contractual allowance that must be set up at the beginning.
But
first refusal rights in an imprint deal are nearly impossible to negotiate.
It’s
better to negotiate that either a) all artists from production company
roster
are going to be released and pushed by the major in an imprint deal or b)
the
production company signs individual joint venture contracts with various
labels
for the various artists for whom the company can acquire such interest.
Part 1
Part 2
Part 3
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