Publishing Agreements – PART 2

 
 
mclaughlin law publishing 15th June 2008
MCLAUGHLIN LAW - MUSIC LAW NEWSLETTER - JUNE 2008
PUBLISHING AGREEMENTS – PART 2 Introduction
In this edition of our Music Law Newsletter we’ll be continuing on with our discussion of Publishing Agreements which we started in our last edition.  Last time we looked at the basics of what is a Publishing Agreement and the important role that a publisher can play in helping you to get the most out of the music you release.  We also talked more specifically about some of the important provisions to be aware of in Publishing Agreements such as the term of the Publishing Agreement and providing for certain situations in which a publisher must get your permission before allowing your music to be used. This Issue
Following on from the issues we highlighted last time another very important issue that needs to be carefully considered in a Publishing Agreement is the territory to which the Publishing Agreement applies.  For instance will the publisher have the world-wide right to represent your music or rather will their rights just be limited to say Australia and New Zealand?  Although many publishers will want world-wide rights to represent your music it is important to have them prove that they actually have the contacts relationships and infrastructure in place that will enable them to actively represent promote and protect your music throughout the world. Third Parties
Even if you are confident that a publisher can represent you on a world-wide basis make sure you pay careful attention to the fees that will be payable to any third parties that the Publishing Agreement allows the publisher to have help in the promotion of your music in overseas territories. Royalties
Defining the royalties payable to you is of course an incredibly important part of the Publishing Agreement.  Under a traditional Publishing Agreement the publisher will be responsible for collecting any income due from the use of your songs and then paying an agreed percentage of this income through to you.  This is what we commonly refer to as royalties. Different Rates
The amount of royalties payable to you under a Publishing Agreement will generally vary depending on type of use that is being made of your songs.  For instance there will be a difference between the royalty paid to you in respect of income received if your song is used in a movie compared to the amount paid to you if your song is covered by another recording artist or released as sheet music.  In some cases the royalty payable to you will also be increased if it was you who sourced the particular opportunity.  And just to clarify that last statement yes I’m afraid it is correct that even if you do discover or develop an opportunity for a third party to make use of your songs the publisher will still take a cut of the income. How Much?
Because of the variation in royalties payable for different uses of songs it is hard to specify the kind of royalty rates you can expect.  Royalty rates will also to a degree depend on the bargaining power that you have with a publisher.  For instance an already well known and established songwriter could expect to negotiate a better deal with a publisher than a relatively new and unknown artist could.  However very generally speaking you would commonly expect all royalty rates to sit somewhere between 60% and 80% meaning that you as the songwriter can expect somewhere between 60% and 80% of the income earned from the use of your songs. Exceptions
There are of course exceptions to this.  For instance the royalty you receive for the use of your music in sheet music form will generally be considerably lower than the ‘ball park’ figures I’ve suggested above. Payment Terms
Where as royalty provisions in a Publishing Agreement deal with how much you will get paid another important issue to make sure you clearly consider is when and in what manner you will actually be paid all these royalties.  In other words make sure it is well defined how often the publisher is required to account to you for any royalties you are owed.  This will usually be on either a three monthly or a six monthly basis.  You should also make sure that as part of the accounting provisions of your Publishing Agreement you have the ability to audit the financial records of the publisher to ensure you are receiving all royalties you are in fact entitled to. Commitment
Another very important term that every Publishing Agreement should have is a requirement for the publisher to actively work towards finding uses for your songs.  A Publishing Agreement doesn’t necessarily have to provide that a publisher must get your music placed or used in certain ways as this is after all really outside of their ultimate control but a publisher should at least be able to demonstrate that they have made all reasonable efforts to find opportunities for the commercial use of your music.  A failure on their part to live up to this requirement could ultimately give you grounds to terminate the Publishing Agreement. Infringement
Clearly defining who is responsible for taking action against any infringement or illegal use of your songs while your songs are under the publisher’s control is also important.  For instance is it the publisher’s responsibility to take such action or do they just have the option?  If the publisher just has the option it should be clearly provided for at what point the right to take action reverts to you.  After all you don’t want to be in a situation of not being able to pursue people who are using your songs without permission when your publisher has previously indicated they won’t be following this up themselves. Questions?
In the mean time if you have any queries or questions in respect of the above please don’t hesitate to contact me at david@mclaughlinlaw.co.nz or on 021 630 201 or 09 363 2738. I can also be contacted through myspace at www.myspace.com/nzmusiclawyer Pass it on
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Disclaimer: This article is intended to provide a general outline of the law on the subject matter. Further professional advice should be sought before any action is taken in relation to the matters described in the article. This article written by David McLaughlin of McLaughlin Law recently appeared in New Zealand Musician Magazine and has been reproduced with the kind permission of New Zealand Musician Magazine. www.christchurchmusic.org.nz/publishers
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