Couple of questions from contract / synch fees

[arska]

I joined in Taxi 2015 January and now exactly after one year of being member I got my first contact from music library. I'm a happy man right now but couple of questions arised even these probably are clear as mud for you

They wrote:

We follow the standard production music business exclusive model 50/50 on synch and performance in perpetuity

1) It a bit confuses how they are going to pay those possible synch fees because they didn't ask for any bank details? Or then I've understood the whole concept totally wrong of what is the synch fee I've been under impression synch fee is money that is paid directly.

2) So this is exclusive deal but what does mean that "performance in perpetuity"? I will get royalties as long as they use the song? In agreement was stated that they pay royalties normally through ASPRA (Aus). I already gave the IPI number they asked which I got from my local PRO so royalty part should be handled for my part.

In agreement there is said the following about other income which I *thought* would mean i.e synch fee...

(c) Other Income
50% of all net sums actually received by the Publisher from any other source, use or exploitation of the Composition other than as described above and directly attributable to the Composition.

[PeterD]

Good questions, for sure!

Congrats on getting off to a great start!!

A "sync fee" is the amount of money the client is paying (up front) for the use of the music. Let's say it's $500. If you have a 50/50 split with your library/publisher, then you should expect $250 of that. That doesn't include future royalties that will be collected, based on how long of the piece is used, how many reruns there are, how many countries play it, etc. That's a little more complicated to calculate, but thankfully your PRO (ASCAP, BMI, etc) is on top of it and will let you know how much that comes out to.

"In perpetuity" with an exclusive contract means they keep the song forever. That doesn't mean you, the writer, aren't entitled to 50% of whatever money that piece of music can generate. Just hope it's used and used often, otherwise it's essentially there song - to market or not market. That's always the risk with an exclusive deal. The good news is, if they are proactive and do their job, there's no bidding on who will license it for the lowest amount (if it were signed non ex with multiple libraries).

Other income could mean anything, really, but they'[re likely talking about synch fees. Don't hesitate to contact them and ask. Maybe ask about bank account info too. Just be cautious NOT to bother them too much.

Good luck!!

[andygabrys]

In addition to what Peter wrote (and I think it totally spot on):

1) It a bit confuses how they are going to pay those possible synch fees because they didn't ask for any bank details? Or then I've understood the whole concept totally wrong of what is the synch fee I've been under impression synch fee is money that is paid directly.

Don't drive yourself crazy worrying when those upfront payments are going to arrive (assuming that your piece is used in a fashion where an up front payment is applicable).

Its going to take a certain time (months often) to where your publisher receives the check for the placement, and then a certain time (often again months) for the publisher to pay you your share. Often this is spelled out in the contract - the actual times. Usually the publisher will pay you quarterly or bi-annually.

And when that money does arrive, it might be in form of PayPal or in a paper check, or as a bank payment which will likely come to you via email and you don't have to send your banking information to your publisher. Especially since this one is based in Australia.

2) So this is exclusive deal but what does mean that "performance in perpetuity"? I will get royalties as long as they use the song? In agreement was stated that they pay royalties normally through ASPRA (Aus). I already gave the IPI number they asked which I got from my local PRO so royalty part should be handled for my part.

Absolutely - and as Peter said. Royalties will be paid by APRA and then will trickle down to your domestic publisher (like BMI) and they will then pay you what you are owed. Since domestic distribution is at least 6 months, and there will be an additional lag on the Australian side, don't expect a payment for at least 9 months but more likely 12 months or more.

]In agreement there is said the following about other income which I *thought* would mean i.e synch fee...

(c) Other Income
50% of all net sums actually received by the Publisher from any other source, use or exploitation of the Composition other than as described above and directly attributable to the Composition.

You can find out more by emailing about this contract clause, but other income is a catch-all to mean "any kind of money that we receive by exploiting your composition" that doesn't fall into syncs / master use, or mechanicals, or blanket licenses, which you can see are accounted for in the contract.

This actually makes this a pretty fair contract IMO because the publisher is not going to withhold any money from these other uses (esp blankets) that some publishers never pay the composer.

[PeterD]

I'm glad I answered correctly. I definitely have Andy to thank for learning this stuff!!!

He is an AMAZING wealth of valuable info!!!!

[arska]

Thank you for so valuable comments guys!

Andy, yes I shall then not at this point pay too much attention bank details since valid comment from you that the method can be lot of other ways as well if the time comes. To PayPal I'd be wise to join anyway though. Exclusive deals can also have period on how long they last but here no such condition is stated, perhaps its forever their track. Well, its just a one track though and my first chance.

They said they have on-going project where to use this particular song that I submitted originally. Though they also said they that have lots of other projects going and asked if I have this same genre of music (hip hop with Asian flavour). I said I don't have that particular genre (only basic hip hop) and did send them my sound cloud page which they said they will check out. Then in latest mail they did send the contract form and commented:

any other tracks you send us for consideration we will append to Page 9 of the agreement."

--> That left me thinking did they look my sound cloud or not and should I actually try and send some of the basic hip hop tracks just to try out my chances or not.. ? They already have access to my sound cloud page so I thought they would have picked up additional tracks in case they want some but they just left it hanging like "any other track you send for consideration..."

Anyway, this is a very enriching experience and your comments means so much in getting pieces together and also the discussions with my local Finnish PRO about how royalties works with APRA etc. APRA actually sends each month overseas royalties as I checked and my own PRO will pay 4 times a year overseas royalties they get so its quite nice.

I hope also other new members will benefit from this chain : )

[PeterD]

Also, don't be too eager to give this library all of your material. If they have no track record and never place your material, you'll be stuck. Maybe try a non-exclusive library or two, to diversify. Hopefully you're able to write lots of material and have emotional attachment to any of it. That always helps.

Regarding Soundcloud ... It's very rare that someone will find you and want to sign your stuff. You pretty much have to point them in the direction of the music. If you're REALLY lucky, it'll only take a few tries.

We wish you the best!

Peter

[arska]

Yeah probably good idea not to put more eggs on one basket especially when I still can't know how / if they are going to use those. Perhaps I start with this one submission at this point since I don't have more than 20+ usable tracks at the moment. There are lots of opportunities for instrumentals at the moment in taxi and in fact has been through whole latter part of 2015...

[andygabrys]

Also, don't be too eager to give this library all of your material. If they have no track record and never place your material, you'll be stuck. Maybe try a non-exclusive library or two, to diversify. Hopefully you're able to write lots of material and have emotional attachment to any of it. That always helps.

Regarding Soundcloud ... It's very rare that someone will find you and want to sign your stuff. You pretty much have to point them in the direction of the music. If you're REALLY lucky, it'll only take a few tries.

We wish you the best!

Peter

just to play "devil's advocate" here:

You have to start somewhere. Signing one track with any library is a drop in the bucket. Its hard to really glean any useful information from signing one track. Well......I suppose if they get it licensed for you, then you can say "well they signed my track". But there is also a time element that comes into it. It might take, 3 to 5 or more years before that track is used for the first time.

Which you could take as:
a) positive and sign more
b) indifference and keep looking for other opportunities
c) the definition of luck - where opportunity (their client needed a track like yours) and preparedness (you signed the track even though your stomach was doing somersaults because its exclusive in perp) came together.

Peter's point about track record is relevant I think - but even with established libraries that have great track record, it might take time before your first track with that library is actually licensed.

So the Diversified Portfolio:

some exclusive tracks - some WFH, some in perp, some with revision clauses etc.
some non-exclusive tracks - different contract lengths, different areas of pitching (some Tv stuff, some movie source stuff, commercial stuff etc. - which depends on what the library's strengths are)
some direct to super tracks.

NO need to fear. Just start writing more and pitching. The path for you will become clear. And remember that this is a "marathon, not a sprint". It will take several years before you make a few relationships and sign enough material to really get a handle on which direction is a good way to go, and probably in the end, you will want to cover all the parts of the portfolio.

In this case, I wouldn't hesitate to sign 20 tracks with this publisher. You might have more relationships at that point and want to send your tracks someplace else, and that is cool too. But give it a go.

[arska]

NO need to fear. Just start writing more and pitching. The path for you will become clear. And remember that this is a "marathon, not a sprint". It will take several years before you make a few relationships and sign enough material to really get a handle on which direction is a good way to go, and probably in the end, you will want to cover all the parts of the portfolio.

In this case, I wouldn't hesitate to sign 20 tracks with this publisher. You might have more relationships at that point and want to send your tracks someplace else, and that is cool too. But give it a go.

Andy, thank you. I've sent on Sunday the signed contract back and as mentioned they did say that if I will send more tracks they can use that same contract to cover more. So perhaps I will now send few tracks more there just for review. Maybe it's the nature of business that is new to me. Like sending sound cloud page still doesn't necessarily mean anything even they said they will look at it. Maybe instead I'd just need to myself pick up the tracks for them and send

After all, if one (I) is not produceful in generating more tracks on weekly/month basis not matter is it excelusive or non-exclusive publisher, growth will never happen.

In fact the way I see this business is like stock trade business: You invest money (tracks) in diverse stock portfolios (different deals on different libraries) on monthly basis and at some point there is enough tracks working for you and you become also more skilled. And then finally compound interest starts taking effect and your investements will start to generate money.

[Russell Landwehr]

Like sending sound cloud page still doesn't necessarily mean anything even they said they will look at it. Maybe instead I'd just need to myself pick up the tracks for them and send

Yes, this is correct. The publisher probably doesn't have time to listen to everything and choose what fits for them. It is better for you to choose the tracks for their consideration and send in the manner the Library requires. Probably mp3 via a file transfer agent.

After all, if one (I) is not produceful in generating more tracks on weekly/month basis not matter is it excelusive or non-exclusive publisher, growth will never happen.

In fact the way I see this business is like stock trade business: You invest money (tracks) in diverse stock portfolios (different deals on different libraries) on monthly basis and at some point there is enough tracks working for you and you become also more skilled. And then finally compound interest starts taking effect and your investements will start to generate money.

EXACTLY

Regards
Russell Landwehr