Long gone are the days of million dollar advances. The music industry is now a single–driven monopoly. What have you done lately is the model. Catalogs of recordings are no longer needed. Sales, radio spins, and a social media presence are the only things needed. RapRehab acquired a contract offered to an indy rap artist who has sold over 25, 000 digital downloads. This contract is a prime example of what any indy artist should expect. #360deal
- Term / Product Commitment:
(a) Initial Period: One (1) master recording titled “xxxx-xxxx” (“First Master”) including, for the avoidance of doubt, all versions, remixes and videos related thereto.
(b) Option Periods: Four (4) options, each for one (1) studio LP per period (each an “Album Option”).
**The Initial Period each of the Options Periods are sometimes referred to herein individually and collectively as “Contract Periods”.
- Territory: The world.
- Recording Funds(inclusive of all advances and recording costs):
(a) First Master Recording Fund: $15,000, of which 50% would be paid following execution of the Agreement, and the balance (if any remains after a deduction of recording costs, if any) would be paid following delivery to and UMG’s acceptance of the First Master.
(b) Album Recording Funds: the following all-in amounts (inclusive of any advances to the artist, producers, recording costs etc) would be paid by UMG to the Artist:
Subsequent LPs: 66-2/3% of the “all-in” USNRC net royalties earned from the preceding LP during the twelve (12) month period following its initial release (reserves not to exceed 20% for purposes of this calculation):
LP# Minimum Maximum
2 $100,000 $200,000
3 $125,000 $150,000
4 $150,000 $300,000
LP funds would be payable 20% upon commencement of recording, and the balance (if any) less recording costs, upon complete delivery.
- Royalties: Royalties would be paid to as follows:
(a) United States: On USNRC Top Line Net Sales: 17% (ppd based) for First Master and LP1; and 18% for LPs 2-4. The royalty rate would be subject to prospective, album-by-album, half (1/2) point escalations at USNRC Net Sales of 500,000, and 1,000,000 units.
(b) International (as % of U.S. rate):
(i) Canada: 90%
(ii) UK: 85%
(iii) Remaining major EU Territories: 75%
(iv) Rest of World: 50%
- Mechanical Royalties: 75% minimum statutory rate, subject to 11x “cap” for LPs and 5x cap for the EP.
- Creative: Artist and UMG would all have mutual creative approval (including in respect of artwork and remixes), provided that in the event of a dispute, UMG’s decision would control.
- Ancillary Rights:
(a) Ancillary Share: If UMG were to exercise its right to extend the Term for any Option Period, UMG would be entitled to 20% of net receipts in connection with Artist’s ancillary activities (including, but not limited to touring, endorsements, acting, publishing, sponsorships) in the Territory provided, however, that touring income would be subject to a floor of 10% of gross (“Ancillary Share”).
(b) Merchandising: If UMG were to exercise its right to extend the Term for any Option Period, Artist would grant to UMG a first negotiation and a matching right for an exclusive merchandising agreement in respect of the Artist.
(c) Publishing: If UMG were to exercise its right to extend the Term for any Option Period, Artist would grant to UMG a first negotiation and a matching right (for the benefit of UMG or its affiliate Universal Music Publishing Group), for an exclusive co-publishing agreement with the Artist.
(d) Social Media: If UMG were to exercise its right to extend the Term for any Option Period, the Artist would deliver to UMG, annually, 20 pieces of significant multimedia content (i.e., fan engaging material including, for example, notable artist benchmarks, all in a multimedia format) for commercial exploitation by UMG in various social media platforms (collectively, the “Social Media Content”). In connection with UMG’s commercial exploitation of the Social Media Content, the Artist would receive an amount equal to the Artist’s royalty rate multiplied by UMG’s net receipts derived therefrom.
(e) Ticketing: If UMG were to exercise its right to extend the Term for any Option Period, UMG would have the exclusive “premium ticketing” rights with respect to Artist’s live concert performance during the Term (tickets giving the consumer an additional benefit, e.g., back-stage passes, meet and greets) in the Territory, and in connection therewith, Artist will procure for UMG the right to an allocation and/or to acquire in advance of the on-sale date to the general public, up to 20% of the total tickets available for sale for each of Artist’s live concert.