Did you know you can now easily split royalties with featured artists, producers or your team members on Alewahouse.com?
Alewa House Premium Package flexes extra features like automatic royalty splits, team accounts, multi artist profiles, fast lane releases & support and distribution to Social media platforms.
To educate entertainers, we’ve put together a guide to splitting royalties.
Remember this is just advice, and we still recommend enlisting the help of a music lawyer if you can.
Copyright Basics: Sound recordings vs. composition
Before we get started, it’s important to note that every track has two copyrights: the “sound recording” and the “composition”.
“Sound recording” is the legal term for the actual recording, with both the artist and producer having contributed to its making. This can also be referred to as the “Master” in recording contracts. This is the final product that you distribute to streaming services, music stores and radio.
“Composition” refers to the underlying composition of the track, also sometimes referred to as the “Song” in contracts. This is usually not managed through a distribution service like Alewa House, but through a Publishing service. Check out Songtrust!
The most common deal struck between an artist and a producer gives a producer a flat fee for their work in addition to some royalties. For example, a $1000 fee to produce the song, plus 15%-25% (standard for indie producers) of the song’s net royalties. FYI, “net” means the royalties left over after recording costs, producer fee and distribution costs etc are taken out from the profit.
Negotiating The Cut
Producers can negotiate their percentage royalty cut based on the flat fee they are paid by the artist up front. If you want more money up front, you might have to take a lower percentage on the backend.
Sometimes, producers can ask for a larger up front “buy out”, meaning they get a higher flat fee paid out for their work in exchange for no backend royalty cut.
If you’re a new artist and have no money to pay a producer up front, you can expect to land on a 50/50 royalty deal with the producer — and ownership rights. But if you’re giving ownership to your producer, get them to sign something that says you as the Artist can admin the track. Since the artist is going to be the one distributing and marketing the track, you don’t want the producer to hold up your work getting it out into the world.
What if I have multiple producers?
If there are multiple producers working on the same track, typically each producer would take a share of the total “producer” percentage offered by the artist. Eg. a 30% producer percentage split between 3 producers at 10% each.
Publishing and Songwriting
Publishing and songwriting is a different revenue stream to the “recording” and should be handled by a publishing service. This helps each contributing artist or producer get access to two sources of income, rather than just streaming royalties.
While we recommend you sign up for a Publishing service to manage these splits, let us go through the basics. If a producer didn’t contribute to writing the song, but just built the track for the artist, the producer shouldn’t get any songwriting/publishing credit or ownership.
If the producer and artist co-wrote the song together, then the producer should get co-writing credit and ownership aka “publishing”. Heads up, this can also mean inspiration, conversations or guidance in the songwriting process. If a producer contributed with even one word, they’re entitled to songwriting/publishing credit.
If you’re part of a band, this can be a little trickier. We recommend to split royalties and rights evenly between each band member to keep things easy. In hip hop, the producer will usually request 50%, while the other top liners will split the remaining 50%.
There are a few different deals that artists and producers can cut for remixes. Most times, a remixer is paid a flat fee to remix the track and it’s considered a “work for hire” so it doesn’t require a new copyright registration for the composition and the producer doesn’t get publishing rights of the remix.
Other times, a remixer will ask for a fee up front plus a percentage of royalties on the back end. 10% of net royalties is pretty standard for independent artists.
We recommend paying a remixer a flat fee or “buy out”. You pay them, they turn it over, and you never have to lodge any copyright docs or pay them again.
Now that you’ve agreed on your Artist vs. Producer splits, you should draw up a split sheet with the terms of the release clearly listed and signed by all contributors.
At bare minimum, be sure to include the artist name, producer, record label or distributor, if the agreement includes ownership, automatic payment splitting, song name, date, up front producer fee, producer royalty rate, songwriting % (if any) and recoup details.
Ready to set up your automatic royalty splits? Sign up to Alewa House here.