6. ADDITIONAL DEDUCTIONS It is often stipulated in the contract that additional costs, such as video production costs and independent promotion fees, must be paid out of the artist`s royalty. (e.56) You should negotiate to withdraw this from the treaty or at least reduce it to 50%. (e.57) a. Three-quarter-speed record companies rarely pay the maximum, but instead choose to set their own mechanical license set. They usually commit to paying three-quarters of the legal rate and paying that rate for a maximum of ten songs per album, no matter how many of the artist`s songs are actually on the album. (e.72) This rate is generally referred to as the « three-quarters rate ». When recordings go out of print, it is usually because the label has decided that the continued sale (or distribution) of the record is not profitable, i.e. the license agreement with the artist has expired. (Labels can also stop distribution as a sanction if an artist fails to comply with their contract or as a strategic measure if negotiations for a new contract prove difficult.) Record companies can also go bankrupt like any other company, and their masters and copyrights are sold or traded as part of their assets.
(From time to time, they are bought by the artists themselves.) In most record contracts, the label reserves the power to « transfer » its rights to your contract to another label or entity. (e.83) This normally occurs when the label is sold or merged with another label. (e.84) For you as an artist, this means that your recording contract is under the direction of the company that purchased or merged your original label. Sometimes this can lead to a situation that is not desirable for you, especially if the new entity does not offer you as much support as the original record company. While it is difficult for new artists to change the resilience of their contract, more established artists can restrict softenability. Once you have more experience and bargaining power, you can eventually include a « key man » clause in your contract. This clause gives you the right to terminate the contract if the key man (or key woman) who played an important role in safeguarding your contract leaves the company. (e.85) Your contract (often referred to as the « Exclusive Artist Recording Agreement ») most likely begins with a brief paragraph that states that an agreement is entered into today between the label (« The Company ») and you (« The Artist ») and that, by signing this agreement, you are promising to provide your « exclusive » services to the record company throughout the « territory » for the specified period of time.
(e.1) As a form of intellectual property, songs are subject to the protection and regulation of the national law of the federal urur as defined by the Copyright Act 1976. . . .