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Part 3: Managing Artist Relationships
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Chapter 11
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Start Thinking. . . What role do unions play in record company
contracts?What are the important issues that should be
negotiated in a recording contract?
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Chapter GoalsLearn the basic elements in a recording
contract.Be able to distinguish between royalty artist
issues and nonroyalty artist issues.Understand union involvement in the process
and the standing agreements that the AFM and AFTRA have with record companies.
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AFTRA AgreementsAmerican Federation of Television and Radio
ArtistsAFTRA National Code of Fair Practice for
Sound Recordingscovers all singers on a recording
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AFTRA AgreementsVocal ContractorsUnion contractor
3+ AFTRA singers in recordingsinging member of the groupsupervises adherence to AFTRA code
Overdubbing and trackingSound recording copyright sharesAFTRA’s Sound Recording Sessions Report
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AFTRA AgreementsScaleClassifications of employmentRecording funds/advanceContingent scale paymentsPayments to nonroyalty singersAFTRA Health & Retirement Funds
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AFTRA AgreementsAcquired MastersRecordings by small companies and indie
labelsSignatory third party acquiring master:
must ensure nonsignatory producer complied with AFTRA code
must comply with all obligations H&R and contingent payments
New use of masters
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AFTRA AgreementsNonunion RecordingAdvantages of collectivismChanging technologyBut AFTRA obligations must be met when
distributing nationallyMoney not saved in the long run by initially
circumventing AFTRA and the AFM
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AFM AgreementsSound Recording Labor AgreementInstrumentalists, conductors, arrangers,
orchestrators, and copyistsCovers provisions for production of music
videos and concert DVDsEmployer pays wages + AFM Health &
Welfare Fund + AFM Employers Pension Fund
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AFM AgreementsSound Recording Labor AgreementContract provides
200% of sidemusicians’ pay for the leader AFM contractor for 12+ musiciansdoubling, cartage, etc.backup artists
Royalty artists“Outside” masters
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AFM AgreementsSound Recording Special Payments FundPhonograph records
record companies make payments to fund twice a year
paid to musicians who performed in preceding 5 years
same scale payments for all musiciansMotion pictures
Film Musicians Secondary Markets Fund payments reflect relative success of project
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AFM AgreementsMusic Performance FundsNonprofit organization to keep live music
available to publicTrustees schedule live music performances
by AFM membersIf no admission charged live performances
may be broadcastDigital downloading adversely affected
physical sales and therefore MPF
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AFM AgreementsNonunion RecordingTaft-Hartley Act and right-to-work lawsAFM control
professional symphony and popular music recording
less control in gospel, Christian, jazz, and country fields
Young Sounds of the AFMSpec sessions
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Royalty Artist ContractsTypes of Deals1. The label signs the artist; a producer
handles project in-house; artist gets royalties2. The label already has artist under contract;
retains independent producer 3. Independent producer and artist produce
master tape, then convince record company to acquire it
4. Master lease deal5. Artist forms a production company to deliver
a master tape to a label
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Royalty Artist ContractsNegotiations Conservative signing policies Terms of contract Maximize self-interests versus compromise Royalty rate adjustments or bonuses as
plateaus reached
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Royalty Artist ContractsThe Issues Term Exclusivity Royalties, advances Production budget minimums Creative control Commitment to promote Chargebacks Ownership of masters
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Royalty Artist ContractsThe Issues Publishing rights, controlled compositions Video rights Foreign releases Assignment Right to audit Default, cure Royalty discounts
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Royalty Artist Contracts360 Deals Power shift between artists and record
companies Two types of 360 deals/“artist brand”
agreements:1. record company gets traditional revenues +
percentage of the artist’s other income streams
2. true partnership Environment = double-edged sword
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Royalty Artist ContractsNew Use and Legacy Royalty Rates Dramatic changes in technology Historically, new uses fitted into existing
categories Digital downloads Telephone ringtones Instant recording at live performance
venues
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For Further Thought. . . What is the difference between a royalty
artist and a nonroyalty artist?What contractual issues related to creative
control should be negotiated by an artist?Why is it possible for an artist to have
fulfilled all recording obligations under a contract, have some recordings that sold well, but still not receive any royalties?