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Right of Publicity. The right of publicity is generally defined as an individual’s right to control and profit from the commercial use of his/her name, likeness and persona. This is a right granted to most of us in the United States under state law. As you probably figured, there are several states that have a very robust right of publicity laws— California, New York and Tennessee. Most of you probably understand why New York and California have strong laws, but why Tennessee? One word—Elvis. In a digital services agreement, as well as most agreements you enter into to sell your music, you will need to grant this right. This right permits the digital services company to use your name, band name, photograph, etc., in connection with the marketing and sales of your music. If possible, you should request to pre-approve any materials regarding your professional identity. If this is not possible, you may want to require the other side to use only those materials you provide, the thought being that you would not submit materials that you would not approve. When reviewing the grant of rights provision make sure to determine to whom these rights are being granted. Many of these digital services companies have affiliates and partners in the United States and abroad. It is understandable that the digital service will want the grant of rights to apply not only to them but also to their affiliates, subsidiaries, licensees and other business partners. Oh yes, money Compensation. Depending upon the Aggregator, you can expect to be charged anywhere from nine percent (9%) to twenty percent (20%) of the monies collected by your aggregator from the sale of your music. The amount of money collected by your Aggregator will vary upon the digital service and their business model. For most digital download services, the digital service will receive a percentage of the sale price and the remaining balance will be paid to you (i.e. your Aggregator). From these monies you will be responsible for paying all of the other persons that are entitled to receive a portion of these monies. This will include payment of the mechanical royalty to the song’s publisher and writer(s), the producer (if he or she is entitled to a royalty), as well as your fellow band members and manager if you have one. If you are signed to a label, the manner, method and means of selling your music over the Internet will be covered in your recording agreement. If you are paid on a royalty basis (i.e., 12% artist royalty), the royalty paid to you for a digital download will often be the same as the royalty you earn on the sale of a compact disc. If this is the case, make sure you are not being charged a packaging deduction on the sale of digital downloads. A packaging deduction is a cost a record company may deduct from the applicable sales price of your single or

album before it calculates your artist royalty. In the majority of recording contracts, your artist royalty is a percentage of the sales price of your album, EP or single. The “packaging deduction” allegedly reflects the packaging costs incurred by a record company when it “packages” your album in a physical format, e.g. the jewel case, artwork, sleeves, gatefolds, etc. Depending upon the format of your album, this deduction can vary as follows: 25% vinyl, 20% compact discs and 15% cassettes. Because there is no “package” on a digital download this deduction does not and should not apply. If the contract with your label is a net profit split, the monies earned from digital downloads are simply added to the income in the same manner as income from compact disc sales. Additional provisions to review In addition to the provisions discussed above, the following terms should be reviewed and may be of a concern to you, depending on your perspective on the issues addressed by these provisions: Catalog. It should be clear what recordings are covered by the agreement. Is it the recordings you initially deliver or all future recordings you make during the term of your contract with the Aggregator? Removal Rights. The right to remove an album or particular recording. While this right is more important for a record label, as an unsigned artist you may need to remove your recordings if you are signed to a label that will be reissuing the masters that you are selling through the digital service. Accounting and Audit Right. Most of the digital services will account to your Aggregator on a monthly or quarterly basis. You should review your statements from your Aggregator carefully and confirm that you are being paid in the manner set forth in your contract. If you have any questions, it’s best to pick up the phone and ask your representative to walk you through your statement before exercising your audit rights. More often that not, a discrepancy is the result of an error or oversight that can be corrected before you receive your next statement. Todd Gascon (gascon@recordingmag.com) is a technology and entertainment attorney at ZentLaw in Sunnyvale, California. Mr. Gascon’s practice is focused in the areas of intellectual property law, including copyrights and trademarks, with a particular emphasis on digital media, music, motion pictures, visual arts and all entertainment issues relative to the Internet. For more information on Todd and ZentLaw, visit www.zentlaw.com. Bruce Kaphan (kaphan@recordingmag.com) is a producer/engineer/musician/composer who currently lives in the San Francisco Bay Area. For a discography and more information on Bruce, visit www.brucekaphan.com.
RECORDING NOVEMBER 2010

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Recording - November 2010

Table of Contents for the Digital Edition of Recording - November 2010