Foreign licensing deals are becoming quite common today as the appetite for American acts grows internationally. Further, they are an excellent avenue for an artist to sell product worldwide without having an actual record contract. Although such an agreement is similar to a domestic recording contract, the essence of the foreign licensing deal is that the artist is licensing the master to a foreign company ("company") to manufacture and distribute the music. This article will briefly discuss some of the main deal points which are incorporated into a foreign licensing agreement.
Territory. The territory is defined to be only specific continents or countries. It is important that the territory not be stated as being for the "entire world". It is best to limit the territory to the areas that the artist feels the company can sell music. The licensed territory should be spelled out (e.g., UK, Japan, etc.)
Product. The licensed music should be defined by title(s) so that the company does not infer that it is being granted the right to release the artist's entire catalogue.
Rights. The artist will normally grant to the company the right to (1) manufacture and sell the music in CD and digital form; (2) use of the name and likeness of the artist in connection with advertising and sales; and (3) the right to publicly perform and broadcast.
[part 2 next week]
Ben McLane Esq