Archive for category Music Business Articles

VIA: Very Important Article About Orphan Works: “The Google Review: Opt in for your rights”

Andrew Orlowski has an excellent article in The Register about proposed changes to the UK intellectual property laws regarding “orphan works” entitled “The ‘Google Review’: Opt in for your rights“.

The important thing about this is that it coincides with a renewed interest in orphan works in the US due to the failure of the “Google Books” case which was ruled improper by a U.S. District Court judge in New York earlier this year (2011).   (See the “Mass Digitization Discussion Document” at the U.S. Copyright Office website.)

The concerns in the creative community (especially the visual artist community) is best exemplified by the Google Books case–give them an inch and they take a mile.  Orphan works legislation was not ever intended to permit the mass digitization of entire libraries and was intended to present a method for potential users to find creators to seek a license.  What the Google Books case clearly establishes (after Google scanned 15 million books and counting) is that care must be taken in crafting orphan works legislation not to create a de facto compulsory license.

This is the reference to “opt in to protect your rights” in the Orlowski article–the copyright law does not require creators to comply with particular registration requirements or other “formalities” (which are in fact prohibited by international treaty).

A quick read and highly informative for artists who want to understand their rights in the online world.

(The “Google Review” is a tounge-in-cheek reference to a UK government report that many believe was prompted almost entirely by Google due to the influence of Rachel Whetstone, head of worldwide communications for Google who is married to a close advisor to the UK Prime Minister.)

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Artist Management Agreements

Written by Chris Castle

New artists often think that the first person they need on their team is a “manager”.  They’ve all heard the stories of the “big” managers who can snap their fingers and make something happen for their clients.

The reality is that when an artist is just starting out, those first 1,000 to 10,000 units are just as hard to sell for the new artist using Internet based tools as it is for the big manager with the major label backing.  When I say “sell”, I mean that literally—get someone who you don’t know to pay money for your record.  I don’t mean some promotional gimmick or getting a retailer to take some units they can later return for full refund.  That’s not a “sale.”  Real sales have always been hard, and they are just as hard in the current environment as ever, and actually given the levels of theft, much harder.

So getting a manager may not be your first move in assembling your team.  Let’s talk about what a manager does and what a manager does not do.

Not A Manager 

Not a Personal Assistant:  A manager does not walk your dog, pick up your laundry, pay your bills or tie your shoes. A manager also does not remind you to do any of the foregoing, nag you to wash your dishes, or loan you money. This person is usually called a personal assistant, kind of a cross between a gofer and a parent.  Good managers will not do any of that stuff.

Not  a Booking Agent:  Strictly speaking, a manager does not get you work (a/k/a “procure employment”), particularly not in California. However, most new bands have the expectation that if they do not have a booking agent, a manager will get them shows. This is a problem for the manager, because anyone other than a licensed booking agent (which usually means licensed by the State where they reside) is not supposed to book shows.  There are a lot of reasons for this, but think “casting couch” and some will become clear.  It is also true that a booking agent is a specialized employment agency, and employment agencies are highly regulated.  Even so, it is not unusual to hear that managers are booking “pump priming” shows, usually at clubs or festivals for low or no performance fees, in order to showcase their band for agents.  This can go on for a while, including after the band is signed to a major label.

Another reason a manager is not a booking agent is that most booking agents are “franchised”, meaning that they have signed an agreement with the American Federation of Musicians or possibly other unions.  That franchise status is very important because without it, the agent will not be able to book union members—which is essentially all touring artists.  The franchise agreement has limitations on how much commission the agent can charge, usually 10%.  Managers charge more.

Not a tour manager or roadie:  Most managers will do not go on tour with their bands, at least not for all of the shows.  They do not hump gear, they do not settle or argue about the value of towels (usually), they do not drive the truck, van or bus.  They may have done all those things in other  lives, but they do not do those things now.

Career Advice

Personal managers typically will say that they give career advice.  Of course, they do much more than that, but given the things they don’t do, you can see that if you think of “career advice” in the very broad sense and then you add in shopping a record deal, booking agent, publishing deal, setting up co-writes, finding a producer and negotiating the deals for all of these people in concert with your booking agent or lawyer, you begin to get the idea.

The personal manager often—and usually—comes up with most of the marketing plan for your band, then runs interference to make sure that all the people involved can actually execute that plan on time and in concert as a team.  You could call this an “uber product manager”—a manager of managers.  The better the artist’s personal manager is at that, the better off the artist should be.

This post continues in the podcast and accompanying article narrated and written by Chris Castle—get it in the RSS feed or on iTunes!

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When Co-Writes Go Wrong: Artist Promotional Requirements in Co-Writer or Producer Agreements

by Chris Castle

Artists will eventually come into contact with either a co-writer, or a co-writing producer, who is themselves signed to a major publishing company.  When co-writing with such a person, artists need to be careful that they are not getting the benefit of a terrific co-writer, only to find themselves locked into a relationship with a business partner who has none of their best interests in mind.

I’m as leery of “exposure” opportunities as anyone, and fully recognize that this is usually bull.  But–there actually are such  opportunities that really do benefit the artist—and therefore the writers if the promo use stimulates sales of royalty-bearing tracks.  As long as the use is prominent and there truly is commensurate marketing and promotional value, then the artist should be able to grant a free or reduced rate license for their recording of the song.   This is particularly true when the co-writer was invited into the artist’s writing sessions or was hired as a producer—the co-writer was given an opportunity to work with the artist, not have their publisher hold the artist up.

I assume that the co-writer has already agreed to any “controlled compositions” clause that the artist is subject to under the artist’s record deal.  This is the minimum that an artist should expect who invites a co-writer to write songs on the artist’s album.

One caveat to the following points is that every now and then a new artist will get to write with someone who truly is an “A” list writer and who does not intend to take a reduced rate mechanical.  That’s fine, I understand that, and if that’s the deal, then let’s get that understanding up front.  But if an “A” list writer is writing with a developing artist, that logic does not translate to other promotional type uses that the artist wants to take for the greater good.

Let’s take a few examples of how this tension manifests itself: iTunes downloads of the week, promotional video channels, artist website or sponsor website uses and film/TV/commercial licenses with more promotional benefit than dollars for up front fees.  It’s very difficult to stomach someone who does nothing to help promote the sales of records in which they have an interest sitting back and trying to dictate terms to an artist who is trying to make something happen.

iTunes Download of the Week:  If an artist is lucky enough to be selected for an iTunes download of the week, the artist/writer must grant a free mechanical license. If you co-wrote the song, you may find that your co-writer’s publisher won’t grant the free
mechanical license.  That means that you don’t get the opportunity, or, worse yet, the publisher may expect someone else to pay the mechanical on the free download. (Most of these online promotions are limited by time, not by the number of downloads.  It is a real pain to write a rule set that will count the number of downloads rather than a rule set that allows unlimited downloads during a certain period of time.)

Promotional Video Channels:  Some video channels, e.g., Channel One, want royalty free licenses.  Some major publishers won’t grant that license as a matter of policy.  They don’t care whether it benefits the artist to get the exposure,  they are more concerned with enforcing their “policy” in general rather than any particular issue.

Artist Website or Sponsor Website Uses:   When an artist uses their own recordings on their artist website or wants to grant a free license to their sponsors to use a recording on the sponsor’s website, it is very difficult to explain why a co-writer’s publisher refuses to grant a free license for those uses.  The fact that the sponsor paid a fee to the artist that the artist used to defray touring expenses to promote the sales of their record (generating mechanicals for the co-writer) and did not share the sponsor fee with the co-writer or their publisher seems like the tail wagging the dog—or like the artist asking for a share of the co-writer’s advances from their publisher.

Film/TV/Commercials:   Publishers will often tell you that they are better able than you to get big money for licenses because (a) they’ve been doing it longer, (b) they are bigger than you, (c) they have the relationships, etc.  This is also known as “blowing the deal.”  If this condescending swagger were limited to opportunities brought to the writers by the co-writer’s publisher that the publisher actually developed, that would be one thing.

It hardly ever is.

This is mostly because it is the artist’s recording of the song that is used as the marketing tool and that is being promoted  generally to the public. Most of the time, the opportunity came because the artist answered the phone, it’s part of an overall sponsorship that the artist developed, or because the artist has a placement agent (or label) who went out and developed the licensing opportunity.

In these situations—again, when the license is also for the artist’s recording which the publisher had nothing to do with creating—the artist should be able to make the call on fees.  This is not a “cover” of an existing song—it is a co-write by invitation.

Suggested language: While this sounds complicated, and it certainly can be if you try hard enough, the following language would likely do the trick, to be inserted into a collaboration, split or producer agreement:

“Artist shall have the right to grant any non-exclusive license with respect to 100% of each [co-written song or “Subject Composition”] if such license relates to the license of a recording of the Subject Composition featuring Artist’s performances, all on such terms as Artist, in Artist’s sole discretion, may designate or approve, provided that the terms applicable to Artist’s share of the applicable Subject Composition shall be no less favorable than the terms applicable to Producer’s share thereof.”

Obviously, consult with your own lawyer. (Also note that the “controlled compositions” concept is usually limited to US and Canadian sales as well as certain gratis licenses beyond the US border.)

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One for You, Nineteen for Me: Is Kickstarter money taxable?


By Chris Castle

The short answer is: Talk to your CPA.

The longer answer is, it would appear that Kickstarter money is taxable.  If the Kickstarter money is being paid to a non-profit corporation that has received tax exempt status from the IRS (or is under an umbrella organization that allows the non-profit to raise funds on a tax-exempt basis), you know who you are and you need to talk to your non-profit accountants and lawyer to be clear on your status.  (If you search for “tax” in the Kickstarter “help” section, you will find a couple references to how nonprofits can work with them.)

If you are not a non-profit, then the chances are pretty good that the money is taxable.  First, Kickstarter money is typically not money given in exchange for a security, which would likely violate a number of state and federal securities laws both in the offering of the “security” and the sale of that security.  (Also, no future benefit or ability to sell or transfer an interest.)  Kickstarter says: “Rewards, not financial incentives. The Kickstarter economy is based on the offering of rewards – copies of the work, limited editions, fun experiences. Offering financial incentives, such as ownership, financial returns (for example, a share of profits), or repayment (loans) is prohibited.”

You may also want to ask your tax advisor whether “rewards” are actually sales subject to state or local sales tax in your state.  By setting a “reward” for a specific dollar amount, particularly involving a CD or another good that would typically be subject to sales tax, the “reward” starts to look a lot like a “price”.  If there is a sales tax payable, the burden would likely fall on the artist and not Kickstarter–however, the IRS or state tax authorities may decide that Kickstarter should be collecting sales tax particularly since there is probably hundreds of thousands if not millions of dollars due in sales tax because if Kickstarter projects.  Also–I’m referrring to “Kickstarter”, but the same issues will probably come up in almost any “crowdfunding” situation.

But I think the Kickstarter relationship between artist and funder could be fairly described as a contract–the Kickstarter “deal” is a promise to do something if certain conditions are met.  This is most likely going to be viewed as a “unilateral contract” and not as a gift.  It’s also not like “panhandling” in that there seems to be a future promise to perform under a unilateral contract.  So the payor says if I give you X then you will do Y.  The payor also gets some “rewards” bling in most instances (which appears to be a fairly well defined fair market value (aka a price) based on the contribution level required to get the “rewards” bling).  That looks taxable to me, although I’m not a tax expert.

Another question for your CPA is whether you need to pay self-employment tax on the Kickstarter revenue.  I think there’s a pretty good argument that you do.  There’s also possible that if you spend the entire Kickstarter payment on business expenses, you may not owe any income tax.  You may, however, owe self-employment tax.  This is a situation that is specific to every individual, so you need to get your own tax advice to see what your exposure might be.

If I’m correct in the analysis, not only would the Kickstarter income be taxable for the recipient, it would not be deductible for the payor.  You should also take a close look at the instructions for IRS Form 1099-K which will be required starting with the 2011 tax year.  I looks to me like Kickstarter (or more likely their payment processor) will need to report Kickstarter income to the IRS beginning with the 2011 tax year.  Update:  See this page on Amazon Payments dealing with Amazon Payments filing the IRS 1099-K for Kickstarter projects (I wonder if the “K” stands for “Kickstarter”).  Looks like the IRS is paying attention.

Don’t forget—this is not legal advice, and you should not rely on it.  Talk to your CPA about your own situation, but be aware that these are real issues.

The difference between tax avoidance and tax evasion is that you wear stripes for tax evasion.  And I don’t mean pin stripes.

So if you are thinking about using Kickstarter (or any other crowdfunding source), make sure you talk to your tax advisor about how to deal with any tax issues that may arise.  If you’re thinking of raising a sum of money because that is what you need to accomplish your project, you may need to raise more than you think depending on what your tax advisor says.  (Note that this article is directed toward US taxpayers.  Local tax laws may differ.)

And by the way—if you find a discussion of this issue on the Kickstarter site, please send us the link.  We weren’t able to locate it.

(Hat tip to Nikki Rowling of Titan Music Group [and co-founder of Austin Music Foundation] for raising this issue)

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See also     When Co-Writes Go Wrong: Artist Promotional Requirements in Co-Writer or Producer Deals

Digital Aggregator Deals: Is the New Boss Worse Than the Old Boss?

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Digital Aggregator Deals–meet the new boss, worse than the old boss?

By Chris Castle and Amy Mitchell

We’ve had a number of questions lately about how artists should look at aggregator deals and how to evaluate them.  You would, of course, evaluate these deals the same way you would any other deal in the first instance–using break even analysis.  This requires a little bit–a very little bit–of high school algebra, but you can do it.

It is almost required that an independent artist sign up with an aggregator in order to have your works serviced to many online outlets. Realize that mere servicing does not do one thing toward making the artist less of a needle in a bigger haystack online as hardly any aggregator will include any, or any meaningful, marketing and promotion.

Some deal points of aggregator deals to be concerned about include getting the ironclad ability to opt-in to any retailer or to opt-out at any time, and also to terminate the aggregator deal on short notice for any or no reason (e.g., 30-60 days).

Another key issue is to make sure that you are collecting your SoundExchange revenues yourself for both the featured artist share and the copyright owner share.  You do not need an aggregator to do this.  It is not unusual for an aggregator to try to collect at least the copyright owner’s share of these monies, but they should cave on the point.  This assumes, of course, that you have registered for SoundExchange WHICH YOU SHOULD DO!

What is the commission base?

You should focus on which revenue streams the aggregator is charging you commision for–the commission base–and which revenue streams you can carve out of the commission base.  They often don’t come right out and say “we are collecting and commissioning webcasting money that you could easily collect yourself particularly since you have to register with SoundExchange as a featured artist anyway and you may as well sign up for both featured artist and sound recording owner at the same time but if you are uninformed we will be happy to take your money.”

Not common to see that paragraph.

You should also be on the alert for any aggregator who has registered themselves as the sound recording copyright owner with SoundExchange.  Since the aggregator is never the sound recording owner (or they better not be), the only reason the aggregator would try to list themselves as such would be to collect your money–and commission it.

Negotiate Your Own Deal

In the case of webcasting monies, what you will see is a reference to “noninteractive” or “nonsubscription” or “statutory”.  As long as those words are preceeded by “The aggregator does not collect or commission….” that stuff, then that’s a step in the right direction.  But all too frequently the aggregator agreement is either silent on the issue or allows the aggregator to collect webcasting monies.  If the aggregator is commissioning webcasting royalties collected by SoundExchange tell them they have to carve that out because you don’t need them to collect those monies as SoundExchange is happy to pay you directly, unlike some of the big retailers.  If you are not sure–ask.

We also assume that your aggregator will be willing to negotiate the terms of your distribution agreement as opposed to a one-size-fits-all arrangement which some will and some won’t.  You want the ones who will.

Getting Out of the Deal

If you are asked to sign a deal with an indie label or with a major label, these labels will require that you give them exclusive  distribution rights–including the digital rights you have already granted to the aggregator. That means that you need to have the ability to terminate your aggregator deal and transfer digital distribution to the new label. There have been instances where digital
distributors tried to hold up artists from signing to bigger situations because the aggregator tries to hold the artist to the aggregator deal and block the artist getting into a more desireable label. As digital is rapidly becoming the primary sales channel, asking a label to accept a deal with no digital rights is like asking them to sign an artist they can only license for film and TV.

Commission Rates: Percentage vs. Subscription

How the aggregator is compensated is also an issue of concern. In the traditional model, the aggregator took a percentage of sales as their compensation. This meant that the aggregator only made money if the artist made money. Some aggregators charge a flat fee on some basis (such as a per-retailer basis) instead of a percentage, or an annual flat fee.  This makes the aggregator deal more like a subscription model where your credit card is banged every year for a magazine subscription.

Each model has its strong and weak points. The percentage model pays the aggregator regardless of whether they are making an effort to stimulate sales (which few of them do in any event). However, under the percentage model the aggregator only makes money if you make money, so the incentives are aligned. The percentage should be low (10% or so) to take into account that the aggregator  has lower incremental costs over time of maintaining content in their catalog.

The flat fee model has the artist pay the aggregator a fee for distribution instead of paying the distributor a percentage. While this is attractive from the point of view that the artist knows what their distribution costs will be up front, it also transfers all of the risk of distribution to the artist. In order to determine which is the better model, the artist should compare their most favorable percentage based offer to the flat fee model and see what the breakeven point will be. Try using a formula like this and solve for “X”:

[Flat Fee]/[percentage] = Gross Income

Gross Income/wholesale price = breakeven units

or, for example:

$100/.10 = $1,000 (Gross Income)

$1,000/$0.70 = 1428 units (rounded down)

In the example, a $100 flat distribution fee is equivalent to a 10% distribution fee model if you sell 1,428 units at a wholesale price of $0.70 (a typical wholesale price per track for permanent downloads). That means that if you sell exactly 1,428 units you will be indifferent between the two models. It also means if you sell fewer than 1,428 units, you will be better off under the percentage model. If you sell more than 1,428 units you will be better off under the flat fee model.  (You could argue that the units would be 10% higher to get to a net number to the artist, but we are trying to keep it simple.  That difference would be another 159 units [(1428/.90)-1428], rounded.)

This example is only for one accounting period and only uses one revenue stream–permanent downloads.  It is more likely that you will see blended revenue streams, but we factor out limited downloads and streaming because permanent downloads are the overwhelmingly dominant revenue stream for most artists.  That may change over time or be different for you.  Also, as you extend the distribution costs and revenues over longer periods of time (with additional flat fee payments per year under the subscription distribution model), your results may vary.

To take another example of the flat fee model, what would the flat fee equate to under the percentage model at 500 units at a wholesale price of $0.70 (a typical wholesale price for permanent downloads)?

[Flat Fee]/[Gross Income] = Distribution Fee as a percentage

$100/[(500) x ($0.70)] = 28.6%

Under these assumptions, a 28.6% distribution fee for an accounting period would be in the astronomical zone for a digital aggregator–who should be getting around 10%.  It would even be on the high side for a major label distributor who was also giving signficant (and expensive) marketing, PR, sales and radio promotion support.

But these are just assumptions to illustrate the issues.  In any of these examples, you will need to use your own projections on sales, wholesale price and configurations in order to get a projection that is personalized for you.

From Twenty Questions for New Artists by Chris Castle and Amy Mitchell.

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Podcast: John Pointer on Patronism.com

There’s a lot of talk about “new revenue streams” for artists, which always sounds pretty fishy.  Austin legend John Pointer has actually come up with one–Patronism.com.  John is a founder of the site and explains it to Semaphore’s Chris Castle on one of our “Morning Run” podcasts.

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Podcast terms of use

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20 Questions for New Artists: Pre-existing Contracts and Aggregators

We have posted sections from the article “20 Questions for New Artists” by Chris Castle and Amy Mitchell some of which has been posted various places. If you are interested in getting a free copy of the article, it’s available at the Semaphore Music podcast page on iTunes under “Article: Twenty Questions for New Artists”. Be sure to check back from time to time for any updates or changes in the law or business practices.

Pre-existing Contracts:

Ask your band mates for copies of any music industry contracts the band, or any of you, have previously signed before you formed or joined the band. Whether it be a credit card, management agreement, publishing deal, previous band agreement or a production agreement, it is important to understand the band’s current rights and restrictions. If any of the members are still tied to an exclusive recording agreement from a prior band, or has credit card debt from a prior band, that needs to be cleared up sooner rather than later. Extracting the artist from a prior agreement may not be quick or even possible.

Aggregators:

It is almost required that an independent artist sign up with an aggregator in order to have your works serviced to many online outlets–some aggregators service over 300 different retailers.

It is important to remember that without marketing and promotion, a new artist is simply a needle in an even bigger digital haystack. Do not expect the aggregator to do any significant marketing or promotion, much less guarantee it.

Given that there are so many potential digital outlets, it is important for an artist to be able to decide on a case by case basis whether they want to be included and preserve the right to opt-in to any retailer or to opt-out at any time.

Artists should also be able to terminate the aggregator deal on short notice for any or no reason (e.g., 30-60 days). If you are asked to sign a deal with an indie label or with a major label, these labels will require that you give them exclusive distribution rights–including the digital rights you have already granted to the aggregator. That means that you need to have the ability to terminate your aggregator deal and transfer digital distribution to the new label. There have been instances where digital distributors tried to hold up artists from signing to bigger situations based on a prior grant of digital rights. As digital becomes the primary means of sales, this issue is front and center.

How the aggregator is compensated is also an issue of concern. In the traditional model, the aggregator took a percentage of sales as their compensation. This meant that the aggregator only made money if the artist made money. (This is similar to a traditional distributor model.) Some aggregators charge a flat fee on some basis (such as a per-retailer basis) instead of a percentage.

Each model has its strong and weak points. The percentage model pays the aggregator regardless of whether they are making an effort to stimulate sales (which few of them do in any event). However, under the percentage model the aggregator only makes money if you make money, so the incentives are aligned. The percentage should be low (10% or so) to take into account that the aggregator has lower incremental costs over time of maintaining content in their catalog.

The flat fee model has the artist pay the aggregator a fee for distribution instead of paying the distributor a percentage. While this is attractive from the point of view that the artist knows what their distribution costs will be up front, it also transfers all of the risk of distribution to the artist.

In order to determine which is the better model, the artist should compare their most favorable percentage based offer to the flat fee model and see what the breakeven point will be. Try using a formula like this:

[Flat Fee]/[percentage] = Gross Income

Gross Income/wholesale price = breakeven units

or, for example:

$100/.10 = $1,000 (Gross Income)

$1,000/$0.70 = 1428 units (rounded down)

In the example, a $100 flat distribution fee is equivalent to a 10% distribution fee model if you sell 1,428 units at a wholesale price of $0.70 (a typical wholesale price for permanent downloads). That means that at 1,428 units you will be indifferent between the two models. It also means if you sell fewer than 1,428 units, you will be better off under the percentage model. If you sell more than 1,428 units you will be better off under the flat fee model.

To take another example of the flat fee model, what would the flat fee equate to under the percentage model at 500 units at a wholesale price of $0.70 (a typical wholesale price for permanent downloads)?

[Flat Fee]/[Gross Income] = Distribution Fee as a percentage

$100/[(500) x ($0.70)] = 28.6%

In any of these examples, you will need to use your own projections on sales, wholesale price and configurations in order to get a projection that is relevant for your own use.

Also, the aggregator need not collect SoundExchange monies and should not be able to enter into any agreements on behalf of the artist/copyright owner that allows the aggregator to waive any rights (such as litigation rights) or to settle any claims.

See Also: Band Administrator/Split Sheets

See Also: Social Networks and Domain Names/Trademarking the Band Name

See Also: Performing Rights Society Affiliations

See Also: Bank Accounts/Tax Returns/Accountants

See Also: Have you Registered with SoundExchange?

Copyright 2009 Chris Castle and Amy Mitchell. All Rights Reserved.

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20 Questions for New Artists: Insurance/Legal Names/DOB and Nationality

We have posted sections from the article “20 Questions for New Artists” by Chris Castle and Amy Mitchell some of which has been posted various places. If you are interested in getting a free copy of the article, it’s available at the Semaphore Music podcast page on iTunes under “Article: Twenty Questions for New Artists”. Be sure to check back from time to time for any updates or changes in the law or business practices.

Insurance

Many bands overlook the importance of insurance, often until it is too late. Even if you don’t overlook it, many artists don’t fully understand why their coverage may be lacking. It is a very good idea for the band to meet with an insurance agent experienced in music industry insurance and get a report from that agent about the coverage the band has (if any) compared to what the agent recommends. In the early days, the band may not have sufficient monies to both get insurance and set up limited liability entities. We always recommend insurance in this case. At a minimum, the band should have commercial insurance on your van and sufficient coverage to protect against loss or damage to the band’s musical instruments. If feasible, the band should also seek general entertainer liability insurance, which is an umbrella policy that covers artists above and beyond the typical automobile insurance and other common coverages. (Tip: Watch out for exclusions for thrown objects.)

Legal Names of Members

Each member should provide the managing member with the member’s full legal name. This will be necessary for contracts, registration of copyrights, etc. It is a good idea to have a list of each member’s cell phone and email so you can give that to anyone who needs to reach the band, particularly on the road or in case of emergencies. If there are any sidemembers (i.e., “hired hands”), list them as well. This type of information can also help the band’s accountant spot red flags like the employee versus independent contractor issues.

Date of Birth and Nationality

It is important to know early on if any members are not of the age of majority so that if someone is under age, you will be prepared for any issues in your state relating to age of consent (usually for contracts) and employment law (performing in clubs that serve alcohol, for example). If the band tours out of state, you will need to consider these issues. Often this involves having a parent or guardian available to sign off on any written agreements. Many states have court procedures (particularly California) that can allow minors to have special rights to do business or make contracts, such as “emancipated minor” laws or “judicial ratification” of contracts. Do not assume that these laws apply to minors in your band without talking to an experienced labor lawyer familiar with your state (and any other states or countries you may be touring in). It’s also handy to have each member’s date of birth available for any copyright registration applications you file (such as Form PA for musical compositions) because the U.S. Copyright Office often requires applicants to include the year of birth.

See also: ISRCs/Unions/Side Projects

See Also: Pre-Existing Contracts and Aggregators

See Also: Band Administrator/Split Sheets

See Also: Social Networks and Domain Names/Trademarking the Band Name

See Also: Performing Rights Society Affiliations

See Also: Bank Accounts/Tax Returns/Accountants

See Also: Have you Registered with SoundExchange?

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20 Questions for New Artists: Have you registered with SoundExchange?

We have posted sections from the article “20 Questions for New Artists” by Chris Castle and Amy Mitchell some of which has been posted various places. If you are interested in getting a free copy of the article, it’s available at the Semaphore Music podcast page on iTunes under “Article: Twenty Questions for New Artists”. Be sure to check back from time to time for any updates or changes in the law or business practices.

Have You Registered With SoundExchange? Featured recording artists and bands that own their own sound recordings can register with SoundExchange, the U.S. performing rights organization for sound recordings. Registration forms are available on the SoundExchange website (http://www.soundexchange.com/), and membership is free. It is a good idea to check the PLAYS database (which can be done online with a simple registration) for any titles of your band’s recordings to see if the recordings are already included in the database or are mis-registered.

SoundExchange can also collect for performances from certain rights organizations overseas. This requires separate authorization, which is explained on the company’s website.

See also: Bank Accounts/Tax Returns/Accountants

Copyright 2009 Chris Castle and Amy Mitchell. All Rights Reserved.

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