Monday, November 15, 2010

Music Business/Law Tips - "Compilation Album Royalty"

Under a standard record deal, most artist royalty deals with a label are about 15%-20% of the retail price (i.e., in general if a record sells for $10 that's about $1.50 to the band) - its the same for a compilation, but instead of a solo act/band getting all 15-20%, its 12-15 acts splitting that royalty on what they call a pro-rata (fractional) basis - so in a compilation deal, the artist needs to ask for:

(1) A pro-rata royalty of 20% (and hopefully no less than 14-15%), and also if the artist can get whats called a "most favored nations" rate it means the artist gets paid the same royalty (pennies per sale) as all the other acts on the comp (even if there is a big name;

(2) That the label lists the artist's credit on the package (name and website);

(3) That the label can only use the artist's track for the compilation (i.e., nothing else like licensing to film/tv) without artist's permission.

Ben McLane Esq
benmclane.com

4 comments:

  1. So, if I have 10 artists on a CD compilation and they all get 1.50. I, the producer, will LOSE money? How can one MAKE money on a compilation or is that not the point of compilations?

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