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License agreement

Advice on everything from getting your music heard to setting up a label and royalties.

License agreement

Postby crx091081gb » Mon Apr 01, 2013 7:38 pm

Can anyone advise me about what to look for when negotiating a license agreement for an ep? I've been sent a copy of the contract and it seems to boil down to me getting 50% of net sales. A mate whose big in Jazz (has physical CD out and everything) reckons 60/40 is fairer. Given that for the time being the label is entirely digital I'm kind of inclined to agree but I have to be honest - I have absolutely no clue what I am doing or what counts as normal.

It's for an indie dance label, they seem nice/legit but I'm a bit cautious because I'm intelligent enough to recognise that I'm in way over my head.
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Re: License agreement

Postby Phil O » Mon Apr 01, 2013 7:59 pm

50 : 50 profit share arrangements are not that unusual. Quite whether it's acceptable is really a commercial decision. What is the label bringing to the party? Will they do promo or simply put it to the usual suspects as regards digital retailers?
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Re: License agreement

Postby crx091081gb » Mon Apr 01, 2013 8:09 pm

I'm assuming they'll do promo, I know they have an artist doing cover art. They seem to be getting reviews in music blogs so I'm guessing they must be actively promoting.

This is probably a question I should ask.

I've heard back from some other mates who do electronic stuff and they seem to think 50:50 is standard/good.
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Re: License agreement

Postby Bitsumishi » Tue Apr 02, 2013 8:50 am

50/50 based on net receipts is standard for a smaller label -the main issue is how the net receipts are calculated -i.e. which specific deductions are taken from gross income when calculating net receipts. For example, the label shouldn't be entitled to deduct it's office expenses or certain travel expenses (among others) and if it's digital only, there should be no packaging deductions etc.
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Re: License agreement

Postby crx091081gb » Tue Apr 02, 2013 3:21 pm

Apparently it's a straight 50 50 split of sales revenue, they pay mastering, artwork, possibly a video and digital distro/hosting costs out of their side. My mates who are selling direct on Bandcamp aren't getting much traffic so I think I'm probably better off working with someone who is actively promoting, after all 85% of naff all is still less than 50% of (hopefully) a bigger number. I spoke to a few other people and apparently like you say it's a standard indie label set-up.

Seems legit, the other music on their label is pretty good, bloke running it seems nice, think I'll go for it.
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