On occasion, a recording artist or record company will include so-called "bonus" or "extra" tracks on an album. Many times these compositions are not even listed on the album artwork or booklet. Sometimes, however, the titles are listed on a sticker attached to the album.
Mechanical licensing in these situations is many times handled on a statutory basis.
Other times, however, the publisher of the bonus or hidden track will agree to abide by the artist's controlled composition clause (which may be at a reduced statutory rate) or accept some type of reduced rate but higher than what the artist has agreed to accept (for example, 85% or 90% of statutory rather than the artist's 75% rate).
Another variation is for the publisher of the bonus composition to agree to some type of reduced mechanical rate but with the guarantee that the reduced percentage will always be computed at the statutory rate in effect when the album is sold, rather than being "locked in" to a rate that is set as of a certain date (for example, a percentage of a "floating mechanical rate" rather than a percentage of the rate which was in effect when the album was released, with no change when statutory rate increases take effect).
This article is based on information contained in the new, revised paperback edition of the book "Music, Money, And Success: The Insider's Guide To Making Money In The Music Business" written by Jeffrey Brabec and Todd Brabec (Published by Schirmer Trade Books/Music Sales). www.musicandmoney.com
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