Percentages?

[KingMIG]

When artists do things such as write for another artist or give beats, how are the percentages come about. Do you just have a fixed price, or should you make a deal in where you get a percentage of the revenue earned?
And if you do make a percentage, how much should you settle for?

 

[bandcoach]

it depends entirety on what YOU get paid up front

a recent transaction asked me to list uot my fee structures

the following are ballpark figures only

You get	all rights as a ghost producer no retention of publishing or anything else
1st song	US$5500
repeat business	US$4000
You get	all rights as a ghost producer I retain publishing to be split 50%-50%
1st song	US$550
repeat business	US$500
You get	exclusive use all other rights reserved publishing/performance/synchronisation/mechanical rights split 50%-50%
1st song	US$250
repeat business	US$200
	first song payment includes a good faith bonus

I set the three levels, because the more rights I cede to the purchaser, the less future income I make from the work concerned

good faith payments are up front non-refundable payments to establish that I am doing work for you (setting up accounts etc at my end of the business)

others may not even tell you what they will charge you.

In addition to what I charge I lose an automatic 1/11 as a tax for providing services/goods, so another way of looking at the good faith payment is tat you pay that tax the first time and i pay it thereafter (i.e. I absorb that cost of doing business with you). I then have to pay income tax on a sliding scale based on what I earn in the tax year

 

[KingMIG]

But how do people come up with their numbers? I know someone who's small time would charge less than someone thats big time. Is there a formula that should be used for coming up with your prices or do you just think of it yourself?
Im guessing you come up with prices that are best for your environment

 

[bandcoach]

As noted above set your prices to reflect the long term gain or loss with the rights you ell

if you ghost produce (create a work for hire) you should expect much more money than if you are creating an exclusive lease

as for the numbers there are some interesting threads here at fp that discuss what the going rate was 10 years (hint $250 for a non-exclusive lease was considered on the low side)

today's $1 non-exclusive leases are worth about as much as a $2 watch: good for a week or two but not much more

Consider the other side of the coin

what does a single sell for on iTunes and elsewhere?

I understand it is $1 or thereabouts

So an artist you sold a beat to that you gave limited exclusive lease license to (e.g. sales of 50000 and then they have to renew it) accrues sales of a few thousand, say 3000,

gross revenue: $3000

take off 9% for the aggregator costs: $270

take off productions costs including leases ca. $500

that still leaves nett revenue of $2230

so they have invested $770 and received a return on investment of 289.61%: they paid you $250 for the lease in advance and they paid their other costs at the time the costs occurred

on top of that depending on whether or not you also sold them the copyrights, mechanical rights and other publishing and synchronisation rights, you may still get a degree of royalties flowing back to you:
Copyrights are split as 100% music to you, 100% lyrics to the artist: essentially a 50-50 split
Mechanical rights is for every time the tracks is played, 8c per play to be split between the composer and lyricist according to the split sheets signed
Performance rights are for every performer on the track every time the track is played, 8c per play to be split amongst all performers as determined by the split sheet signed off on at the end of the recording sessions.
Publishing comes back to you via your PRO

if you are the sole performer of your part of the tracks you can claim 1 part for each part you performed - this is important to lock down as playing different instruments on a single or album qualifies as separate performance rights payment for that track; in the session musician part of the industry these are called doubles and there are set rates for a musician who plays more than one instrument in a session.

say you program drums and play guitar and bass and also program some synth strings (keyboard part) and some synth brass section lines (again a 2nd keyboard line): that is a primary instrument and 4 doubles, so you are equivalent to 5 players. Now the artist only adds their rap or vocal line they are one performer. In the breakdown then you get 5/6 (83.33%) and they get 1/6 (16.67%) of the performance rights for every play that is recorded at your PRO

 

[Jimbo Trashy]

But how do people come up with their numbers? I know someone who's small time would charge less than someone thats big time. Is there a formula that should be used for coming up with your prices or do you just think of it yourself?
Im guessing you come up with prices that are best for your environment

From my experience, I set the price really low. That is until I got responses like "Really? That's all? Cool!". Then I kept bumping it up as I got clients.

Now that I work for a boutique production company, I never charge less than what I get paid by my current employer.

Seems to be working thus far.

 

[KingMIG]

Performance rights are for every performer on the track every time the track is played, 8c per play to be split amongst all performers as determined by the split sheet signed off on at the end of the recording sessions.
Publishing comes back to you via your PRO

So if there are 4 performers each gets 2c or does each performer get 8c?

if you are the sole performer of your part of the tracks you can claim 1 part for each part you performed - this is important to lock down as playing different instruments on a single or album qualifies as separate performance rights payment for that track; in the session musician part of the industry these are called doubles and there are set rates for a musician who plays more than one instrument in a session.

say you program drums and play guitar and bass and also program some synth strings (keyboard part) and some synth brass section lines (again a 2nd keyboard line): that is a primary instrument and 4 doubles, so you are equivalent to 5 players. Now the artist only adds their rap or vocal line they are one performer. In the breakdown then you get 5/6 (83.33%) and they get 1/6 (16.67%) of the performance rights for every play that is recorded at your PRO

Does this apply to digital performances also? That would mean if the bea tmaker had 10 instruments on a track, he would be equivalent to 10 players and get 10/11?

 

[KingMIG]

From my experience, I set the price really low. That is until I got responses like "Really? That's all? Cool!". Then I kept bumping it up as I got clients.

Now that I work for a boutique production company, I never charge less than what I get paid by my current employer.

Seems to be working thus far.

Thats what I was thinking of doing, but if someone has more knowledge than me on the subject, they can take advantage of me. Not all people will make it obvious there ripping you off by saying "Cool!" and "Thats all!"

I dont know I should differentiate the costs for people that aren't signed vs. legal entities such as record labels and signed artists

 

[bandcoach]

So if there are 4 performers each gets 2c or does each performer get 8c?

8c split 4 ways = 2c each

Does this apply to digital performances also? That would mean if the beatmaker had 10 instruments on a track, he would be equivalent to 10 players and get 10/11?

pretty much any instrumental part that can be uniquely identified is a new instrument for the purposes of counting performances during the recording process

 

[KingMIG]

pretty much any instrumental part that can be uniquely identified is a new instrument for the purposes of counting performances during the recording process

So If I made a beat right now with 10 instruments i'd get 10/11 and the rapper would only get 1/11. That seems like a rip off though

 

[bandcoach]

why? can you not justify it by pointing out that you contributed 10 different yet related performances to the rappers 1 performance?

N.B. doing ad-lib additions does not count as a new performance, they would have to record harmony vocals or something for a second performance credit

 

[KingMIG]

why? can you not justify it by pointing out that you contributed 10 different yet related performances to the rappers 1 performance?

N.B. doing ad-lib additions does not count as a new performance, they would have to record harmony vocals or something for a second performance credit

Oooh never mind, I forgot that this only pertains to the performance rights.

on top of that depending on whether or not you also sold them the copyrights, mechanical rights and other publishing and synchronisation rights, you may still get a degree of royalties flowing back to you

If you dont specify whether you want to sell the rights will the buyer automatically get these rights or will you keep them?

 

[bandcoach]

if not specified contract law tends to favour the person who did not draw up the contract in any disputes that arise

therefore it is in your interests to always specify what rights you are ceding to the buyer and what rights you are retaining: the more specific the harder it is to argue an intent other than what is written by either party

ps

as with most things to do with the law, get advice from someone who is licensed to practice law in your country as the advice given here may not be appropriate for the courts there

 

[KingMIG]

You know a lot o
And sorry for all the questions, i'm pretty new to all this.

One more quick question though. By 8c you ment 8 cents right? I know it's dumb but I wanna be completely sure.
And thanks a lot too

 

[bandcoach]

You know a lot o
And sorry for all the questions, i'm pretty new to all this.

One more quick question though. By 8c you ment 8 cents right? I know it's dumb but I wanna be completely sure.
And thanks a lot too

yes 8c = $0.08,as for knowing a lot, I should at 51

 

[KingMIG]

Aright and thanks again for answering all these questions