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Nick of Blaze!
Average Member
United Kingdom
196 posts
Joined: Sep, 2001
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 Posted - 2002/10/30 : 23:31:21
Firstly, helllooooo everyone. I'm sorry I don't get into this forum too often, but if there's any q's you may have about how to do stuff, and you think I may have the answer, then send me a PM. That includes the industry questions too, I'm only too please to help.
I came across a couple of links recently that are really useful, and will teach you a great deal about the industry, I hope you find them of interest, but first a brief explanation so that you'll understand what they're about a bit better.
Right, for those that see the industry as maybe more than a leisure time thing, and are keen to maybe actually earn money from creating music, then you need to know the important stuff.
Most people write music for the sheer hell of it, and monetary retribution is usually far from their minds. Just being on plastic and having a track played out is paramount, and there's absolutely nothing wrong with that at all, that's totally cool. It's a great buzz, and the only expense will be the amount of copies of it you'll buy for yerself.
However...... that's all very well, but say you have a great track, it's been out a while, it's started to sell units, and it's generating cash. Maybe you've signed it, and seen the guy that's put it out buying a new car, or a new bit of kit, and you can't help but get over the novelty of being out on plastic very quickly, and think, where's my share of the cash?
This is the point for you where the hobby turns into a business. Even happy hardcore, as small a genre as it is, generates money, and sometimes lots of it, so how do you get paid?
There's two basic ways when releasing records. Sales royalties, and publishing royalties. Sales are simple. You sell a record across the counter or through IMO etc, you get paid a royalty. If you're on a compilation album such as Bonkers, you will get a percentage of the totally royalty set aside for all the Artsists on that compilation, by the makers of that company releasing it (React for instance).
The other form of royalty is called "publishing". This is the most asked question I get, "What is publishing?".
A music publishing royalty is generated in two areas, Peformance and Mechanical, and is passed on to the WRITER/COMPOSER of the track. If you write a track, you arel the original composer of that track and the writers credits are shared between those that originally wrote it. Any new remixes are "adaptations of your original composition" and therefore are not entitled to a share of the publishing royalty.
PLEASE NOTE: This thread and the links below are geared for the UK. Other countries may have slightly different rules, but the basics are the same.
PERFORMANCE.
When your track gets played on the radio, on TV (yup even in the cafe on East Enders), in public (at a gig for instance), etc etc, you will generate a performance royalty. This may be a direct royalty, which means that as a direct result of your track being played then you'll receive a direct royalty, sepecifically for you (the writer). The other royalty is a "sampled" or "blanket" royalty. Because some radio stations or cable stations turnover so many records, but have a smaller audience share, the PRS (the Performing Rights Society www.prs.co.uk ) take a "sample" of their output and use that as a guide for the whole year and pay pro rata. If your lucky enough to have been played heavily within that sample period, then that's great. That doesn't seem fair at first glance, but it evens out somewhere usually because they'll take a sample from another station or channel for a different period, so in theory, you'll catch a sample somewhere and get paid something. "Blanket" royalties are different. Rather than log every single track played on a juke box or at a karaoke competition, the PRS takes a royalty from everyone that uses music in some way, but it doesn't constitute their main business, such as pubs (they mainly sell beer, but music adds to the atmosphere), shops, (they may only sell clothes, but music again adds to their persona), restaurants etc etc. These are then all piled up and spread amongst the PRS writer Membership. Again the theory is that somewhere, you're track has been played and you're getting a royalty.
MECHANICALS.
Every time, someone wants to make a physical copy of your copyright, they have to pay a royalty, UNLESS, you have a specific agreement, whereas they are exempt (rare). If we go back to our Bonkers compilation again, whenever React physically press a compilation CD unit, they have to pay a fee to every one of those writers whos work appears on that CD. Royalties vary depending on many factors, but a conservative estimate would be about a penny a unit. Sometimes it cn be as much as 5 pence.
Other mechanical royalties are generated for instance, in a cuddly toy that plays a tune, or a computer game, even your mobile ringtone generates publishing royalties, peformance because it rings in public, and mechanical, because it's stored in the chips on your phone.
Mechanical royalties are handled by the Mechanical Copyright Protection Society www.mcps.co.uk
OK, so to the links, hope they're of use, and you make a million from your music.
Publishing:
http://www.bbc.co.uk/radio1/media/g2/onemusic/nottingham/royalties.ram
Here's the one about Legal/Business issues:
http://www.bbc.co.uk/radio1/media/g2/onemusic/nottingham/business.ram
and finally one on the creation of music.
http://www.bbc.co.uk/radio1/media/g2/onemusic/nottingham/creative.ram
Enjoy, and hope this helps.
Nick.
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Edited by - Nick of Blaze! on 2002/11/15 03:37:40 |
Simon
Advanced Member
Belgium
5,001 posts
Joined: Dec, 2001
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 Posted - 2002/10/31 : 08:52:38
It's very Interesting,
A big thank you for taking time out (which must have been quite a while for all that typing) to post this up for us, Unfortunatly I'm no good at making any tunes, although I have often really wondered to myself a lot about royalties.
Sy.
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"...The Outsider"
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Oli G
Advanced Member
United States
1,817 posts
Joined: Oct, 2001
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Posted - 2002/10/31 : 10:01:49
intresting
and handy, since im starting up a label :)
Garage Is where You Keep Your ****in Car
House Is where You Live
Hardcore Is HOW You Live
\o/ <o/ \o> <o> /o\ _o/ \o_
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Hardcore Underground 4 - Released October 19th
http://www.myspace.com/camelrecords
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Xenochrome
Advanced Member
United States
2,645 posts
Joined: Aug, 2002
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Posted - 2002/11/01 : 05:48:41
Big thanks for taking the time to write that post!!!
There's a lot of good info there!
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fazza
Advanced Member
United Kingdom
1,126 posts
Joined: Sep, 2002
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Posted - 2002/11/03 : 03:45:23
yeah cheers mate! nice to see you havent lost touch with the people! appreciate it!
"I feel you, i want you, i know your touch is all i need, im waiting you're shining"
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all your base are belong to us.
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ryg0r
Advanced Member
Australia
2,807 posts
Joined: Aug, 2002
34 hardcore releases
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Posted - 2002/11/07 : 12:58:55
Man, that post is awesome - what about, stuff on record labels?
-=[ryg0r]=-
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Nick of Blaze!
Average Member
United Kingdom
196 posts
Joined: Sep, 2001
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Posted - 2002/11/07 : 23:55:15
quote:
Originally posted by ryg0r:
Man, that post is awesome - what about, stuff on record labels?
-=[ryg0r]=-
Hiya bud, np, hope this explains a little bit.
ROYALTIES FROM RECORD COMPANIES.
This is a very different ball game. The reason is, that there's not much incentive for record companies to pay you. Even if you're very successful for them, and you're more than likely going to earn them money indefinately, sometimes it can be very difficult to get paid.
With publishing it's pretty much guarenteed because if TV/radio stations don't pay what they owe to the PRS or record companies don't pay the MCPS, then they could lose their right to licence music and they need that to continue running thier business. So invariably, they pay. I have had a couple of companies that put out compilations go bust owing the MCPS a fortune and then start up again a week later under a new name. They even released new compilations under the same old name because they had good branding but as of today, they've still never paid me a mechanical royalty and continue to trade.
However, record companies have no such incentive in the grand scheme of things. There is no guaranteed way to get paid, even if you're very successful. What you have to do is continue to have a good relationship and hope you get paid on time and what you're rightfully owed.
The problem with record compaines, is that they invariably pay artists twice a year (June 30th and December 31st). After these dates, usually, they have a further 90 days to get together all the money you're owed (your "account") and pay you under the Agreement you have with them. This may be 50/50 profit split, or a percentage of PDP, all depends on the deal you have. They then send you a statement with a cheque or direct transfer payment, and that's how you get paid. You'll notice you are at the bottom of the chain. Even the guy that swweps the distributors floor gets paid before the artist!
The main problem with this system is that record companies are run day to day, and your paid bi-annually. That means that if you earn a fortune, chances are the record company won't keep your share aside for six months, they'll spend it! Consequently, after 6 months of your royalties accrueing, they wont be able to pay, and that's what usually goes wrong. This is why you ALWAYS get a good advance to act as a buffer, at least for the first year or so. With hardcore, the actual vinyl sales are very low, you won't earn very much, but the compilation royalties can be huge, and because the record company has virtually no outlay or expenditure with these, the money accumulates very quickly. One Bonkers album can generate as much as £3,000 within a year for the Record company, so you have to stay on the ball.
PAID, BUT NOT ENOUGH.
OK, so you've had a Statement, and a cheque, but it doen't seem enough. What can you do? Well, firstly, if there's other Artists on the label, ask them if they're happy too. If they are, and it's just you then do your research. It isn't difficult to work out how much your owed roughly. Most record compaines receive around £2.00 for each 12" they sell. Royalties from compilations can be very different, but can generate quite a lot of money sometimes depending on the deal. Many people think that having records out makes you a fortune. Not so, in fact invariably, the actual plastic sales can be very costly unless you sell thousands of units, because you have to make up the initial costs of artwork, mastering etc, it's the licensing that gets you the real profits. If in doubt, seek legal advice, a lawyer can help you estimate your sales and whether or not it's worth chasing the company.
NOT PAID AT ALL
If the dreaded day arrives and you haven't had a statement or payment from your record company, you need to do a few things. Firstly, before you go running to a lawyer (cos theycost BIG money), call the company. Tell them you haven't had a statement and keep it happy. DON'T start ranting, you'll get nowhere, just be polite and say you haven't had your statement, and ask if there's anything you can do to help. If they say their sending you one soon, then that's cool.
If they fail to do so, you need to check your Agreement you have with them. Most will give the artist clear instructions on notifying the record company of their failure to account. Put your notice on paper and send it to them. Don't get all heavy just something to make it clear you haven't been paid. Give them plenty of time, like say 28 days, don't worry, it'll be in your favour if you end up having to sue. The more chance you give them to pay, the more favourable your case will look.
If you have no joy after this, then it's time for you to see a lawyer. This scenario happens a lot, so there are certain procedures you have to follow. Firstly, you have to notify the company in writing and give them a bit more time. If after this you still have no joy, then you need to prove that they owe you money. You may be 100% sure that they do, but you will need to have hard evidence on paper. In your agreement, if it was done right, then you'll have "the right to Audit". This means that you, or someone representing you (an auditor or accountant for instance), has the right to see the record compaines accounts (or "books"), to ascertain whether or not they owe you any money, or their payment they have made to you is correct. Usually, this right exists from year to year, however audits can be expensive (around £2000-£3000 minimum), so that's the gamble. A lot of record compaines assume you won't do this, and most people don't, but if after your estimations, it's worth it, it's probably a good idea. Don't forget, if they haven't paid you now, they certainly won't pay you next time, because the account will be even more money.
At this point, you will probably have in your agreement with the record company a very important clause that you can if you wish, bring into play. You MAY (PLEASE see a lawyer), be able to bring the Agreement you have to a close. That means that the record company can no longer release your material, and you get the rights back to your Master recordings and are free to walk elsewhere and get a new deal. Usually this is because under the agreement, the company has failed to meet one of the important ("Primary") obligations, i.e paying you what you're owed. Think carefully before doing this though. By terminating the agreement, you may also be relinquishing the rights to Audit, and also they may not have to account to you anymore. At first glance this seems like a great idea, but sometimes it isnt the right decision. If a record company tries to get YOU to terminate the Agreement, then again, think carefully AND TAKE LEGAL ADVICE. Sometimes they try this to get out of some obligations, in my experience, refuse if you can.
The better option, in my opinion, is you MAY (see a lawyer) be able to end what's called the TERM of the agreement. This means that although the company will be allowed to continue to sell/license your material, you have the right to go elsewhere and get a new deal as an individual(s) or using the name under which you were signed. There may also be some restrictions within your Agreement, but you may be able to go and get a new deal and (hopefully) start earning again. This recently happened to Robbie Williams. Despite being signed to a major label with Take That, he decided to leave and get a new deal elsewhere. The old label may have been able to refuse him permission (he wasn't leaving because of non payment, he just didnt want to be in Take That anymore), but they know it's pointless. If an Artist isnt happy then they wont perform, and the record company still has to look after them, so it's easier just to let them go. Sony refused to let George Michael go, and they got such bad press, they relented in the end. However, in both cases, those compaines still have the right to release/license those artists material and STILL have to account to them as usual.
So you have now "terminated, the TERM of the Agreement", but this doesn't mean the record company doesn't have to pay you, nor does it mean that the majority of their obligations have been relinquished, in fact quite the opposite. They have to continue as if you are still signed to them, however they don't have the added bonus now of new material, or most importantly in a lot of cases, an exclusive on the name. You are now free to take yourself, and your name as an artist and sign to someone else. So in not paying you what you were rightfully owed, they have undone all the good work they did building up your name as an Act/Artist. Another record company elsewhere will benefit in future from your reputation and have a "ready made" act. If you have a GREAT act, and a good reputation to sell records, then this may even increase your advances when signing a new deal!
Unfortunately, this is where the business goes from fun, to very ugly. Invariably, people get extremely upset and annoyed, and good friendships can get frayed, or even destroyed. This is a pity, but if you're owed royalties, and you haven't been paid, then that's not fair in anyone's book, so as horrible as it is, and as ugly as it's going to get, you may find you have to do it just to continue to earn a living.
SO WHAT ABOUT THOSE MISSING ROYALTIES?
Assuming you're correct and you can prove you're owed royalties after your audit, then it's now a case of getting them. For this you inform the record company of your findings, and give them (yet more) time to pay. If they continue to fail to do so, you have to decide if you're going to chase for them. This is where it can get really expensive. You could increase the legal bill by thousands, however, if proved correct, you may be able to get those costs back from the record company, that's very possible.
You can:
Come to a settlement. The easy option. Be sensible, if they offer you £3000 and your owed £5000 then you might be wise to take it.
Apply to have the company "wound up" by a Court. (The amount owed will have to be over £750 if my memory serves me well). This will freeze their day to day running, and they are then put into LIQUIDATION their assets (office furniture, computers, studio equipment etc) are sold for cash to pay creditors (including you). This is the end of the company and in many cases, the directors can be banned by the Government from running a business for 2 years. This is not good for any individual, as it will affect them for the rest of their lives when they want credit or even a Bank account. The question always arises, on tax forms, bank forms, etc "Have you ever been disqualified from acting as a Director of a Company?". Most people think very very carefully before allowing this to happen. Being banned is not good and will follow you forever.
If they are a Limited company, then these assets are restricted to those of the business. If not then those assets may include personal items such as houses, cars, etc. These will be sold to get the best price to pay you and any other creditors.
BE WARNED: Just because you brought the action, and because you won and paid for it, DOESN'T put you automatically at the top of the list of any creditors. The Tax Man, VAT man, Banks, utility companies, and many others may get their shares first, leaving you very little if anything at all.
So there you have it, I hope that answers some of your questions. I also hope that you never find yourself in this position because it can be very disheartening and generally makes you fed up of the business. Music isn't fun when these things happen. However, there is a solution.
HOW TO AVOID THIS SCENARIO.
What you can do to avoid all this hassle to a certain degree is to not sign a recording agreement at all. You allow a record company to licence your tracks for release. The relationship is much better and both parties earn the same amount of money. However, if anything does go wrong, eventually, the license will expire and it doesn't get renewed. You can then relicence elsewhere with someone else. The advantages of this is that you can restrict the licence however you wish giving as much or as little power as you like to the record comapny, and always retaining the rights to the Master recordings you have of your material. The main disadvantage is that you have to fund EVERYTHING yourself to produce those tracks, like remixes etc. However, these are a cost and can be taken off the top like everything else.
I do hope this long post hasn't bored you too much and that it may help you in the future. Most record companies are pretty good, but there will always be the rogues, and belive me, when it happens to you, it can completely ruin your music industry expeience.
Cheers guys,
Nick.
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Edited by - Nick of Blaze! on 2002/11/08 00:33:37 |
Underloop
Advanced Member
United Kingdom
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Posted - 2002/11/08 : 00:18:50
Possibly the most helpful chap I've met in the music biz..... I take my hat off to ya mate
Matthew aka DJ Underloop
--------------------------
"Turn that shit up!!!!!"
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"We don't stop playing because we grow old;
we grow old because we stop playing."
- George Bernard Shaw
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Nick of Blaze!
Average Member
United Kingdom
196 posts
Joined: Sep, 2001
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 Posted - 2002/11/08 : 00:25:40
quote:
Originally posted by Underloop:
Possibly the most helpful chap I've met in the music biz..... I take my hat off to ya mate
Matthew aka DJ Underloop
--------------------------
"Turn that shit up!!!!!"
Chhers bud!
Five bloody attempts that took to post......
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Simon
Advanced Member
Belgium
5,001 posts
Joined: Dec, 2001
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Posted - 2002/11/08 : 02:02:47
Woooooaaaahhhhh I think that took me about 10 mins to read *Blimey*. Anyway somevery very interesting things mentioned there. Makes me respect a lot more artists now anyway :)
Sy.
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"...The Outsider"
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Oli G
Advanced Member
United States
1,817 posts
Joined: Oct, 2001
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Posted - 2002/11/08 : 06:27:22
yet another peice of imformative information (eh?)
thats great :) thankfully as a record label owner i wont be a ****, when statments and money come thru, ill pay
Garage Is where You Keep Your ****in Car
House Is where You Live
Hardcore Is HOW You Live
\o/ <o/ \o> <o> /o\ _o/ \o_
__________________________________
Hardcore Underground 4 - Released October 19th
http://www.myspace.com/camelrecords
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strychnine
Advanced Member
Australia
2,268 posts
Joined: Feb, 2002
92 hardcore releases
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Posted - 2002/11/08 : 12:51:44
quote:
Originally posted by OliGhalebi:
yet another peice of imformative information (eh?)
thats great :) thankfully as a record label owner i wont be a ****, when statments and money come thru, ill pay
you say that now, but we'll see what your excuse is when your artists are all starving and homeless, while you're cruisin' the streets in your mad pimpmobile, wearing a purple fur trench, a bright green versace suit, and a feathered hat 
...
oh wait, that's what *I* look like on the weekend 
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I know you're out there. I can hear your mouse moving.
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Oli G
Advanced Member
United States
1,817 posts
Joined: Oct, 2001
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Posted - 2002/11/09 : 05:35:04
ffs, theres nothing wrong with purple fur and a bright green suit.. i dont think...
:)
nah i wont be a ****, i never am with money, i pay when payment is due
(cept on my barclaycard, but never mind that)
Garage Is where You Keep Your ****in Car
House Is where You Live
Hardcore Is HOW You Live
\o/ <o/ \o> <o> /o\ _o/ \o_
__________________________________
Hardcore Underground 4 - Released October 19th
http://www.myspace.com/camelrecords
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Lixx
Advanced Member
United States
1,338 posts
Joined: Aug, 2001
288 hardcore releases
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Posted - 2002/11/09 : 10:05:37
This advice is absolutely priceless, *someone* deserves his own forum
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strychnine
Advanced Member
Australia
2,268 posts
Joined: Feb, 2002
92 hardcore releases
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Posted - 2002/11/09 : 13:40:20
quote:
Originally posted by OliGhalebi:
nah i wont be a ****, i never am with money, i pay when payment is due
(cept on my barclaycard, but never mind that)
... are you *sure* you wanna run your own label? 
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ryg0r
Advanced Member
Australia
2,807 posts
Joined: Aug, 2002
34 hardcore releases
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Posted - 2002/11/09 : 23:58:26
I want to start my own Aussie label.
I want info on how to start one. But thanx for the mad info.
-=[ryg0r]=-
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Visit my site at http://commandobot.com/
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