by Jeff and Todd Brabec
A continuing and valuable income source for well-known songs is their inclusion on the various albums released by the Special Products divisions of the major record companies.

Most of these albums are compilations of various songs and recording artists that fit into a special theme. For example, the project themes can be the "best" hits from the 1980s, the "greatest" movie or television themes, the "best of" Elvis Presley, Fats Domino, or The Platters, and any number of Reader's Digest tape packages.

These "special products" albums usually contain a large number of songs controlled by several music publishers and, unless they feature only one recording artist, usually contain a large number of master recordings owned by various record companies.

Because of the great number of royalty-bearing compositions on these albums, the record company will normally ask each music publisher to give a reduced mechanical rate for every song used.

In many cases, a 75% statutory rate is agreed to by publishers, but rates can be as high as 100% and as low as 50%, depending on the value of the particular song to the project and the negotiating stances of the other publishers who control songs on the album.

It is somewhat standard when these requests are received to ask for a "most favored nations" clause in one's acceptance of a reduced mechanical rate so that if another publisher gets a higher royalty, a publisher granting a lower rate will be guaranteed the same rate.

Occasionally, such a clause will relate to all songs on the album with the exception of one or two songs, which demand a statutory royalty.

It is also common to receive an advance on a certain number of future sales (e.g., for the first 100,000 units sold) and, in some cases, a minimum guarantee (e.g., a guaranteed sale of 25,000 units).

© 2008 Jeff Brabec, Todd Brabec

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).

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