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Royalty rates for physical product

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Royalty rates for physical product

Postby Bendy Carlos » Tue Mar 20, 2018 12:11 pm

Hi,

Was wondering if anyone could help me with some advice ?

Am currently in discussion with a label in Australia about licensing an old tune of mine to compilations.

They want to offer me a 50/50 split on income from downloads. Fine.

But they're only offering 18% on income from CDs.

Does anybody know if this 18% is good or bad, based on current trends ?

Am a bit out of the loop as regards current music biz stuff, so any advice gratefully received.

thanks
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Re: Royalty rates for physical product

Postby ken long » Tue Mar 20, 2018 6:44 pm

Bendy Carlos wrote:Hi,

Was wondering if anyone could help me with some advice ?

Am currently in discussion with a label in Australia about licensing an old tune of mine to compilations.

They want to offer me a 50/50 split on income from downloads. Fine.

But they're only offering 18% on income from CDs.

Does anybody know if this 18% is good or bad, based on current trends ?

Am a bit out of the loop as regards current music biz stuff, so any advice gratefully received.

thanks

IANAL

Is it 18% of the total profit or 18% of a 50% split between the label and all the artists on the label? Are there many other artists to share the pot with? Are they valued differently to you?
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Re: Royalty rates for physical product

Postby resistorman » Wed Mar 21, 2018 4:43 am

Well, as Ken asks, 18% of what? But physical CD sales are non-existent unless you're selling them on a gig in a tourist town so...
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Re: Royalty rates for physical product

Postby Bendy Carlos » Wed Mar 21, 2018 10:48 am

Resistorman : well obviously people do still buy physical product, albeit in greatly reduced amounts compared to the past. Otherwise Record Store Day wouldn't be a thing :-)

Aaanyway, here is the proposed deal for physical :

"18% on 100% of Published Price to Dealer, on domestic Net Sales taking into account all returns, discounts, commissions, fees, charges and rebates."
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Re: Royalty rates for physical product

Postby BigRedX » Wed Mar 21, 2018 12:34 pm

What about international sales? Especially if you are in a country other than Australia, or have an international fanbase.

Also do the label do direct sales from their website (lots of small labels do)? What's your percentage there?
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Re: Royalty rates for physical product

Postby Bendy Carlos » Wed Mar 21, 2018 12:44 pm

The label only have a presence in Australia and New Zealand, so the royalty rate of 18% would apply in both countries.
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Re: Royalty rates for physical product

Postby ken long » Wed Mar 21, 2018 3:10 pm

Bendy Carlos wrote:"18% on 100% of Published Price to Dealer, on domestic Net Sales taking into account all returns, discounts, commissions, fees, charges and rebates."


You get 18% on the wholesale, not retail. So if they sell your work for $10 RRP and, say, $6 dealer price, your 18% comes out of the latter. The second part is a little nebulous. They could easily just call that an overhead. 18% on net isn't too bad for a compilation though.
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Re: Royalty rates for physical product

Postby Bendy Carlos » Wed Mar 21, 2018 3:15 pm

Ok, thanks Ken.
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Re: Royalty rates for physical product

Postby James Perrett » Thu Mar 22, 2018 12:27 am

One thing I'd check is whether charges include the cost of manufacture - and what else do charges cover?
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