Thursday, January 8, 2009

"So You Wanna Be a Dj part 15?" Royalties etc...

As we start to delve into more complex issues with my series, many ask certain questions but can not afford a music lawyer, I hope some of this information can help though I recommend a music lawyer ALWAYS. I have taken much of the net here from wikipedia got rid of the unnecessary and condensed it so it's a little easier to digest. ( see bold type after each topic)

Royalties (sometimes, running royalties) are usage-based payments made by one party (the "licensee") to another (the "licensor") for ongoing use of an production/song etc.
Royalties can be determined as a percentage of gross or net sales derived from use of the asset or a fixed price per unit sold.. A royalty interest is the right to collect a stream of future royalty payments, used in the music industry to describe a percentage ownership of future production or revenues from a given leasehold, which may be divested from the original owner of the asset.

now, this gets tricky, when structuring a deal it is really important to get good royalty rates....this is where your lawyer is vital! I have always tried to get the best rate I can because this is how I earn a living.

A license agreement defines the terms under which a resource or property such as copyrights,productions,songs are licensed by one party to another, either without restriction or subject to a limitation on term, business or geographic territory, type of product, etc. License agreements can be regulated, or they can be private contracts that follow a general structure.

Again this is a contract which will tell you they have the right to sell your music in whatever territories you have agreed, the world or just U.S.A for example, it will explain what they will pay you etc....however, you own your product which is better than a record deal where they own your soul.

Trademarks are words, logos, slogans, sounds, or other distinctive expressions that distinguish the source, origin, or sponsorship of a good or service (in which they are generally known as service marks). Trademarks offer the public a means of identifying and assuring themselves of the quality of the good or service. They may bring consumers a sense of security, integrity, belonging, and a variety of intangible appeals. The value that inures to a trademark in terms of public recognition and acceptance is known as goodwill.
A trademark right is an exclusive right to sell or market under that mark within a geographic territory. The rights may be licensed to allow a company other than the owner to sell goods or services under the mark. A company may seek to license a trademark it did not create in order to achieve instant name recognition rather than accepting the cost and risk of entering the market under its own brand that the public does not necessarily know or accept. Licensing a trademark allows the company to take advantage of already-established goodwill and brand identification.
Like patent royalties, trademark royalties may be assessed and divided in a variety of different ways, and are expressed as a percentage of sales volume or income, or a fixed fee per unit sold. When negotiating rates, one way companies value a trademark is to assess the additional profit they will make from increased sales and higher prices (sometimes known as the "relief from royalty") method.
Trademark rights and royalties are often tied up in a variety of other arrangements. Trademarks are often applied to an entire brand of products and not just a single one. Because trademark law has as a public interest goal the protection of a consumer, in terms of getting what they are paying for, trademark licenses are only effective if the company owning the trademark also obtains some assurance in return that the goods will meet its quality standards. When the rights of trademark are licensed along with a know-how, supplies, pooled advertising, etc., the result is often a franchise relationship. Franchise relationships may not specifically assign royalty payments to the trademark license, but may involve monthly fees and percentages of sales, among other payments.

I have these as a brand it is important, it is costly so bear that in mind, you also have to think about how many countries you can afford to be trademarked in, it all adds up! You put all your hard work into your company, last thing you need is someone owning your company name in another country and profiting off that hard work!

Copyright law gives the owner the right to prevent others from copying, creating derivative works, or publicly performing their works. Copyrights, like patent rights, can be divided in many different ways, by the right implicated, by specific geographic or market territories, or by more specific criteria. Each may be the subject of a separate license and royalty arrangements.

Copyright royalties are often very specific to the nature of work and field of endeavor. With respect to music, royalties for performance rights in the United States are set by the Library of Congress' Copyright Royalty Board. Mechanical rights to recordings of a performance are usually managed by one of several performance rights organizations. Payments from these organizations to performing artists are known as residuals. Royalty free music provides more direct compensation to the artists. In 1999, recording artists formed the Recording Artists' Coalition to repeal supposedly "technical revisions" to American copyright statutes which would have classified all "sound recordings" as "works for hire," effectively assigning artists' copyrights to record labels.
Book authors may sell their copyright to the publisher. Alternately, they might receive as a royalty a certain amount per book sold.
Some photographers and musicians may choose to publish their works for a one-time payment. This is known as a royalty-free license.

Hope this helps, luv n bass, DJ RAP

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