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Wednesday, December 11, 2013

Music - Split Sheet Percentages


Music Producer Collaborations and Songwriting: Split Sheet Percentages

As the music world continues to evolve, the distinctions between music genres are beginning to blur. Producers are collaborating with artists in different music genres to appeal to a more diverse audience so that the potential for success increases. Unless you are a super producer like Pharrell or Timberland producing for Justin Timberlake, this means that producer deals for these collaborations will follow the customary terms of the artist’s genre, particularly when it comes to determining a producer’s copyright ownership share of the musical composition, or the song. This determination could be an unpleasant surprise if you are an Urban producer who is crossing over to Rock, Country, or any other music genre so it is important to know beforehand what to expect.
The following are the important issues for producers to consider regarding copyright ownership in a song and my observations over the years of genre specific industry standards so that you can make an informed decision when presented with a collaboration opportunity in another music genre.
What Exactly Is Publishing?
First of all, let’s start with a brief description of how copyright ownership relates to the frequently-used term, “publishing.” This topic alone could be an entire article by itself because it is routinely misunderstood. Publishing is a non-legal term that is used to refer to a collaborator’s copyright ownership in a song. The copyright in a song actually consists of two halves, a writer’s share and a publisher’s share, but some people casually use the word to represent both shares. A copyright owner is free to do whatever he or she wants with their portion of the song, such as assign it to a publisher independently of the other copyright owners. The purpose is to earn royalties and other income from album sales, radio play, and licensing, which is why determining the division of a song is so important. The bottom line is that if you do not understand the details of publishing make sure you hire someone who does or you could be generating only half the income that you otherwise are entitled.
What Are Split Sheets And Why Are They Important? (Song Split Sheet Percentages)
A “split sheet” is an agreement that identifies each contributor to a song and sets forth each person’s copyright ownership percentage. The split sheet should include other pertinent information as well, such as the contributors’ performing rights organization (ASCAP, BMI, SESAC), the specific contribution of each person (i.e., beats, melody, core lyrics, hook), and the start and completion dates of the specific contribution. Also, it should indicate whether different versions of the song were created. These details may not seem important in the early stages of creating a song, but a split sheet serves as each contributor’s evidence of copyright ownership and will assure a third party, such as a potential publisher, of your undisputed interest. For clarity purposes, do not mistake a split sheet with registering your copyright interest with the U.S. Copyright Office. A split sheet and a federal copyright registration together will give you solid proof of your copyright interest in a song.
The biggest mistake that collaborating songwriters and producers make is failing to complete a split sheet. This is a problem because if the song becomes successful, which is the intent of all collaborations, then there is a risk that one of the songwriters, or more likely his or her publisher, will claim that he or she should own a larger percentage of the song than originally assumed. Also, under U.S. Copyright Law, if no agreement exists between the contributors, the default assumption is that all of the contributors jointly own an undivided equal share of a song. This division may be acceptable in situations where the actual work was equal among the contributors, but the default would also apply where one person makes only a minimum contribution, such as a sound engineer that never signed a work-for-hire agreement. The easy way to alleviate this potential problem is to have the song contributors fill out a split sheet prior to getting too far into the creative process. The excuse I frequently hear is that nobody wanted to “rock the boat” during the creative session, which is a valid concern, but my recommendation is to have the collaborators meet at a time and place outside a creative session to discuss business and sign a split sheet.
A split sheet is also important because your administrator or accountant can use it to collect your royalties from record companies and your performing rights organization. This is important because a distributing record company will withhold all mechanical royalties generated by singles and albums that embody a song where the ownership percentages are not correct. Likewise, the performing rights societies will withhold all performance royalties until any split disputes are resolved.
How Are Splits Typically Determined?
In concept, splits should be allocated according to a collaborator’s contribution to a song. Unfortunately, this is not a bright line concept because a contributor may believe that his or her contribution is more valuable to the final result than the other contributors may view it to be. For example, if a song is divided up based on quantifiable measures, such as the lines of lyrics or music written, then a contributor who only wrote the hook to a song would only be entitled to about ten percent of the overall song. The contributor who wrote the hook might not believe this method to be fair if the hook is frequently looped in the song and clearly raises the quality of the entire song, which is typical in rap. There are countless examples like this so the bottom line is that all of the contributors need to come to an agreement and sign a split sheet.
What Split Should I Receive As The Producer Of A Song?
The true answer to this question is the same answer that applies to all terms in music contracts, “it depends on the situation,” but since that typical attorney answer is probably going to result in a blank stare on your face and make you question why you are even reading this article, let me offer some insight according to my experience. Each genre of music has its own “standards” when it comes to dividing up copyright ownership to the contributors of a song. In Urban music (Hip-Hop/Rhythm & Blues), a producer is typically going to receive a minimum of fifty percent (50%) of the song, less any portion allocated to existing samples, because the music significantly contributes to the success of a song. To warrant such a large share an Urban producer is expected to not only deliver a finished master, as opposed to just beats, but to also manage the project and sometimes mentor the artist. In the Rock and Pop genres a producer typically receives an equal share of all of the contributors based on the notion that the music and lyrics are equally important to the end result. Rock and Pop producers are also expected to help make the song successful by using their connections with industry professionals. In Country, a producer typically does not share in copyright ownership unless the producer also contributes lyrics. I have done deals where a producer receives a fee that is intended to compensate the producer for his or her efforts and buy out any rights, but I have noticed that Nashville publishers are not interested in dealing with producer contributors. Lastly, in the jazz and classical genres, producers rarely receive any copyright ownership in a song. As you can see, if you are an urban producer you may not be interested in collaborating with certain other genres unless there is an ancillary benefit.
Are Industry “Standard” Splits Set In Stone?
There are no absolute deal terms in the music industry but unless you have some kind of leverage and a good attorney, you will probably not be able to receive deal terms more favorable than the industry standards set forth above.
The term “leverage” is basically a strategic or tactical advantage over a contracting party, or you have something that the other person wants so they want to be down with you. This could be a connection that you have with a company or person, an attractive upcoming project that could be used to cross-market, or something else that is desirable. If you have leverage then the most effective way to use it is to have an experienced professional, such as a manager or attorney, maximize your deal terms. If strategically done, you will not offend the other party and end up with a great deal.
What if a Producer is part of a group or band?
With respect to groups that include a producer member, it is important to enter into a group agreement so that there are no misunderstandings. I have worked with groups that decide to divide all copyright ownerships equally regardless of the group member’s contribution and I have worked with groups that assign the copyright ownership to a jointly owned publishing company and determine on a song-by-song basis how each contributor will share in the income. The agreement is whatever works for the group but what you do not want is to create songs with no agreement in place and allow the opportunity for a dispute to arise after the fact. Despite the fact that, legally, a co-owner of a copyright can grant certain non-exclusive rights, a company or person in the music industry is not likely to offer an opportunity for a song that is in dispute.
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