Monday, October 11, 2010

Music Business/Law Tips - "Flow Through" (Part 2)

There are various ways to handle this inconsistency so that the playing field is level. First, and most popular, is what is known as the "flow through" provision. This means that no matter what the agreement between the artist and production company, the artist will receive the benefit of any more favorable royalty computation in the production company's contract with the record company.

Second, the production company and artist agree that the artist's royalties will be a set percentage of what the production company receives from its agreement with the record company. For example, 50% of the money received by the production company from the record company will belong to the artist.

Third, and least definite, is for the artist to attempt to negotiate the highest royalty percentage it can get from the production company.

The "flow through" model can be applied to other main provisions of the artist's contract with the production company (e.g. term). The key is to make sure that the provisions offered by the production company will match the provisions the production company receives from the record company.

Ben McLane Esq
benmclane.com

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