Record deals can also reduce your income in another important way. It’s called the ‘Controlled Composition’ clause. The labels require that you give them a reduced rate for the license. If that is not bad enough the label will also cap the number of songs that they will pay on. Did I mention that this business is tough?
- 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 making $750,000.…
That means you will leave $250 grand on the table…
In this installment of An Insider's Guide to Today's Music Biz, Steve Rennie explores the role of record labels in the music business. He starts by talking about the different types of record labels and what they do, from marketing to manufacturing and radio promotion. Then you'll learn about why you need a record label, how to get a record deal, what a music contract will look like, and how the signing process works. As a little bonus, Steve gives you some insights on your commitments and compensation (advances and royalties) once you get signed.
- Understanding how record labels run
- Finding a record label
- Meeting with A&R and business teams at a record label
- How record labels promote your music
- Negotiating a record deal
- How record labels recoup costs