From the course: An Insider's Guide to Today's Music Biz: 7 Record Labels

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Controlled compositions

Controlled compositions

From the course: An Insider's Guide to Today's Music Biz: 7 Record Labels

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Controlled compositions

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- Record deals can also reduce your income in another important way. It's called the Controlled Composition Clause. If you write the songs that you're recording for the record label, you are entitled to publishing income in the form of mechanical royalties for each track on an album, and it's the record label that pays those mechanical royalties. So, what's income for you is an expense to the label. And as we know, the label is not trying to find ways to make you more money, they're trying to find ways to make themselves more money. The way they'll do that is by reducing what they have to pay in publishing royalties. It's called the Controlled Composition Clause. Because you control those songs, they are called "Controlled Compositions" and the labels require that you give them a reduced rate for the license. Typically it's 75% of the statutory rate, which is about nine point one cents these days. So, if you were gonna make a million dollars in publishing on your album, you're now…

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