Contract Contradictions

by Chip Cox

As promised, the remainder of the discussion of the license agreement for a promotional CD. For those who didn’t see the first column two issues ago, I’m writing about a contract that came my way lately where an established independent label puts out a series of compilations of unsigned bands. That column went over potential problems including a clause that gave the label first refusal rights on signing the band (where the label can value its services to equal the money offered by the other label), mandatory purchase of the compilation, and a mandatory promotional fee that I believe wasn’t going to result in any sort of effective promotion.

Another issue in these types of compilations is editing rights for your track. I had a band call recently, upset that the song they gave to a compilation of new local bands in their hometown had been edited (to their minds, edited out of existence) by the organization sponsoring the compilation. They’d received no notice of the changes but there also wasn’t anything in writing saying that the song had to be released as offered by the band. Here’s another area you want to keep in mind when you’re tempted to participate in these types of projects-if they want to use your song, they need to use it as you’ve delivered the track. If they want to try some remastering or editing-that’s up to you. Final approval rights are yours and if you don’t like what they’ve done to your song, you can prevent them from using it. After all, what’s the point in giving up a track for free that’s supposed to promote your band when the released version makes you sound awful?

What should you be looking for when you’re thinking about doing one of these compilations?

1. That you’re delivering the song as a nonexclusive license within a country or continent. This means you still own the song and can release it on your own CD or place it on other compilations.

2. That the version of the song you deliver is the version that has to be used. If the organization that’s releasing the CD wants to make a change, that can only be done with your written approval.

3. That in absence of royalties, you receive X number of copies of the finished compilation free of charge (make sure that includes postage). How many is X? Fifty is a common amount. That provides enough to keep a few for yourselves and plenty to sell as merch.

4. If you want to buy more, the price is $X. Anything from $3.75 to $4.50 is fair.

5. If the organization manages to license your track or the entire compilation to another label or organization in another territory, you receive half the proceeds related to your song, be it cash or product within thirty days of when payment is received by the original organization. If the compilation is ten songs and the sublicense price is $500, divide that $500 by 10 = $50 divided by 2 = $25 for you.

6. Contact information for your band, both street address and website, is included in the liner notes. If you want a band picture, that also.

7. Try to avoid anything that would require you to sign with that label or give them a right of first refusal.

Those are the basics and should see you through most situations.

Chip Cox is a former professor at the University of Missouri Law School and currently practices entertainment law in his hometown of Kansas City, Missouri. He can be reached via email at chip@inspiratron2100.com