that you always know what’s going on with your business. It’s really important that you protect your publishing because it’s like your pension. If you’re a good songwriter, you can always earn a living.”
6 Keys to Fine-Tuning the Contact
If you decide to pursue a co-publishing deal, here are some tips to keep in mind when negotiating your contract.
1) How income is being distributed. Fifty percent of the royalties a song generates are considered the “writer’s royalties.” The remaining
50% are the “publishing royalties.” The writer’s royalties are never up for negotiation and remain the property of the songwriter. Therefore, a 50/50 royalty split is actually only 50% of the publishing royalties. Ultimately, the songwriter should retain 75% of the total royalties.
2) Gross income definition. You want to make sure 100% of the income tha your songs generate is included in the definition of “gross income.” Publishers will often try to remove their 25% interest from that definition to avoid bearing any of the expenses of administering your catalog and collecting your royalties. Since, however, they have 25% ownership, they should bear 25% of these costs.
3) Length of contract. Try to keep the terms of your contract to three or four years since the publishing company will retain ownership of a percentage of the coopyrights on any songs tha you write during this
period. Also, try to negotiate a “right of reversion” clause so that you limit the time they retain ownership.
4) A means to get out of a contract if you are dissatisfied. Try to negotiate a clause that stipulates that the publisher will place a certain number of songs by a set date or you will have the option to terminate the contract.
5) Advance clause. You can ask for a clause that spells out future advances based on your songs’ chart performances.
6) Mechanical royalties. If you are a songwriter with a recording contract and you record your own songs, make sure your label
pays you your mechanical royalties. It is standard for a record label to make an artist bear a percentage of the mechanical royalties. But if you will be paid for your songs. The company’s reasoning for not wanting to pay you is that you also earn royalties from record sales.