Home > 20 questions for new artists > Twenty More Questions for Artists: Record Producer Agreements, Part 4: SoundExchange Royalties

Twenty More Questions for Artists: Record Producer Agreements, Part 4: SoundExchange Royalties

January 4, 2012

Please note: This is an installment in a multi-part post.  Each post has information relevant to prior posts, so until we get to the “Final” there will be more information to come. See also More Questions for Artists: Record Producer Agreements, Part 1, Part 2, Part 3, Part 4, Part 5. Part 6 , Part 7, Part 8 , Part 9, Part 10, Part 11 and Part 12.  Watch this space for further installments, or subscribe to the RSS feed.  A post with all the current parts in one post is available here, and see also “Artist Management Agreements” on the Semaphore Music blog.

8.  Where Do Producer Royalties Come From?

You probably noticed that in a typical record company agreement, it is highly likely that the artist royalty account will still be unrecouped when the record producer is payable even if the recoupment point is artificially delayed by recoupment at the net artist rate (as opposed to the all-in rate).  It is important for the artist to have an understanding with the label that they will pay the producer royalty even if the artist account is unrecouped overall.

9.  SoundExchange Royalties

Although producers are not entitled by statute to a share of the featured artist royalty for the public performance of sound recordings paid to artists by SoundExchange (in the US), it has become fairly customary for producers to request a share of performance royalties for their sound recordings.  While the producer may not be entitled to a share of these royalties under the Copyright Act, the law may be changed in the future.

So in our example, the producer would request 26-2/3% of the featured artist share of performance royalties, but the language should be drafted as the lesser of any statutory payment that producers may become entitled to in the future or 26-2/3%.  This payment is given effect by the artist sending a letter of direction to SoundExchange which  SoundExchange typically will accept.

No one can know how a statutory share of performance royalties would be given effect in the future, but it would probably be administered by SoundExchange the same way that the featured artist share of royalties is currently administered.

Next: Proration and Accounting

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