by Jeffrey & Todd Brabec
One of the ways that music publishers attract writer-performers is through the services they can offer in developing their careers as recording artists. A common approach that is used in the area of artist development deals is for the publisher to guarantee the financing of a set number of master quality studio recordings (and sometimes even a video) so that record companies will be able to hear the writer-performer at his or her best and, if a recording artist agreement is secured, the publisher will receive royalty points on albums and singles released under the deal. For example, the publisher might guarantee $15,000 to $30,000 to record master quality demos and if a recording artist agreement is secured, the publisher might receive a production or executive producer royalty of 1% to 3% for its efforts.
Other times, publishers might even finance an entire album of the writer's performances and try to sell or license the album to either an independent or major record label. The value of this approach, even though it is more expensive due to the fact that an entire album is being produced including artwork and possibly a video, is that the publisher is providing the record company with a finished product ready to be released. Many times, this is an easier sell. On occasion, the record company will add some new tracks to the album or further enhance the already completed master recordings or redo certain aspects of the production. In these cases, the music publisher will virtually always be entitled to royalty points on the album from the record company in addition to many times being able to recoup its recording costs from the initial monies earned. Sometimes the executive producer points are limited to the first album, sometimes they apply to all albums recorded under the recording artist agreement and sometimes the points are on a graduated scale downward for each subsequent album.
One of the variations in the area of development deals is to provide for an equipment fund so that the writer-performer can purchase new musical instruments, amplifiers and other accessories. This may be handled either on the basis of an extra advance to the writer who will make the decision as to what is needed (for example, "an additional advance of $5,000 to $10,000 to the songwriter within 30 days after the signing of the agreement which shall be used for the purchase of musical equipment, the choice of which shall be in the songwriter's sole discretion"), a fund which will be spent with the mutual approval of the publisher and the songwriter (for example, "an advance of $5,000. which shall be payable by publisher for the purchase of equipment mutually agreed to by both the songwriter and the publisher") or a fund which can be accessed by the writer submitting invoices from the retailers detailing the amount of the expenditure for each item purchased with the publisher paying the seller directly (for example, "publisher shall pay invoices directly to the music retailer upon submission of invoices for musical equipment selected by the songwriter within the approved budget of $7,500.").
If a recording artist agreement is not secured within an agreed amount of time (e.g., 1 year, 18 months, 2 years, etc.), the publisher many times has the option to convert the deal into an exclusive songwriter/co-publishing agreement which is based on the writer delivering a minimum number of newly written compositions. If the publisher does turn the development deal into a songwriter's agreement, there will be a schedule of yearly advances (many times with a minimum/maximum formula to ensure that if the writer-performer becomes successful as a songwriter that the advances will reflect that success) with a clear understanding of the number of songs that the writer or group is expected to write. For example, the term might be 1 year plus 3 options with the advance range being from $25,000 to $75,000 per year, the annual minimum song commitment being from 6 to 10 and, if the advance structure is on the high side, a recorded and commercially released commitment rather than one based only on the creation of new songs regardless of whether or not they are actually released. There are innumerable variations in these conversion deals but the duration of the agreement will usually match (but not be longer than) the duration of the term of the agreement had the publisher been successful in securing a record deal for the writer. For example, if the original term was 1 year plus 3 contract period options, the conversion deal would not last longer than that envisioned in the initial agreement.
Excerpted from the book "Music, Money and Success" by Schirmer Book. Reprinted by permission from the authors.