Pitfalls in Publishing Agreements in 2015

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For every professional artist, the end goal is to earn a living by marketing and selling their art. In the music industry, competition is intense, and physical sales have long been in a steep decline. Consequently, because the supply of available music is enormous and the barriers to industry entry are at an all-time low, musicians must utilize alternative means to generate revenue from their output. Often, rather than signing a 360 deal with a record label, a new and evermore available revenue stream is the deal cut with an independent music publishing company.

As a result, one of the ways an artist stands to make real money from performing their craft is to license their songs or lyrics to agencies who then distribute the music. These agencies have sprung up mostly on the East and West Coasts, but are spreading like wildfire, and similar to considering a major label record deal, there are major pitfalls to look out for when entering into a publishing agreement.

Independent music publishing companies often promise the moon and the stars, but the agreement that comes across the table can often allow far too big a license to the agency – not only for the songs produced after signing the contract, but also any song produced prior to the execution of the contract. If you don’t have an attorney review these licensing and publishing agreements, things can turn out like the old major label horror stories.

There are all manner of publishing deals, from copyright administration all the way to full ownership of your publishing. As an artist, you need to perform some due diligence to ascertain how far these agreements really go.

Pitfall 1: Overly Broad Licenses

Initial drafts often allow the agency to take a publisher’s share of the profits and have an exclusive license to ship the song forever. Even if the copyright and control of the music is returned many years later, which may not necessarily be the case, you can easily relinquish the ability to market and monetize your song(s) without the agency’s approval. Even if you tried, according to some contract terms, because they’re the exclusive representatives and have the exclusive rights to license that song, the company may be due to receive a cut just as if they had found the opportunity and worked it out on their own. Further, this could also apply to all agreements even outside the United States, because often these agreements have a territory of global scope.

Pitfall 2: Vaguely Defined Terms

Another issue is that, without proper review, artists may enter into publishing agreements with these same agencies in which the artist contracts to create original content in return for a monthly fee. In this scenario, the agency finds an artist with a certain degree of demonstrable talent, and in their offer, they’ll say something to the effect of, “For these returnables we’ll pay you $3,000 a month,” and the agreement will otherwise remain vague according to its terms. These vagaries, in effect, empower the agency to withhold payments by claiming the artist breached the agreement. “You haven’t complied with the entire agreement, you didn’t supply this number of songs, so you are in breach.” What are returnables? What was actually due? Songs? Sound bytes? How long must the composition provided actually be? The artist must protect themselves by insisting on direct specificity in regards to what exactly an independent music publisher is asking for.

Pitfall 3: Work-For-Hire Arrangements

The ownership of the copyright is one of the most important terms in a publishing deal. ESWA’s (Exclusive Song Writer Agreements) generally grant all of the publisher’s share of income to the music publisher, and the publisher typically acquires 100% copyright ownership, worldwide, for life. If they’re asking for a number of songs to be returned, it will most often be a work-for-hire arrangement: The artist will have absolutely no claim on those songs, forever. In the alternative, no ownership rights are granted in either administration, collection, or sub-publishing agreements. Again, as an artist, make sure you know what you’re getting into.

Do you have any questions or need assistance? Contact me today at ahpierce@aaronpiercelaw.com

Aaron Pierce
(212) 882-1752
299 Broadway, Suite 1405
New York, NY 10007
ahpierce@aaronpiercelaw.com
www.aaronpiercelaw.com

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