The gross income of the model agreement includes the record company`s share of VPL income. Unlike PPL revenues, none of these VPL revenues are paid directly to the artist and, although the record companies oppose it, it is worth pushing for this purpose. DISCLAIMER: All recommendations and information provided on this website are used by you at your own risk. Presentation agreements (whether a “model,” a “standard” or otherwise) are only for information purposes and are not intended for use. As noted above, this clause gives the artist the right to terminate the contract if the record company does not publish minimum statements of commitments in the United Kingdom. It is unlikely that a record company will accept a right of termination resulting from non-release in other regions, with the possible exception of the United States, and it is therefore expected that recordings that are not published in “large markets” will be licensed at the artist`s request. i) Standard of Recordings This agreement stipulates that the recordings to be provided must be “technically satisfactory”, which is self-explanatory and quite undisputed. Record companies will often try to emphasize formulations that recordings must be “artistic” and/or “commercial” satisfactory or consistent with a style consistent with previous recordings or demos. Formulations like this – and anything subjective like “in the company`s view” – should be avoided as much as possible, as they provide record labels with an excuse not to accept or publish recordings, regardless of all the labels that insist on such a formulation. In essence, the way this agreement works is that all revenues (gross income) are put in the same basket and that, after all expenses have been withdrawn, what remains (the “net profit” or “net income” or “net income”) is shared between the artist and the company.
The split in this agreement is 60:40 in favor of the artist, which can be for a new artist, a little ambitious, with a more common 50:50. However, it is worth trying for 60:40 especially in later option periods and under no circumstances to accept less than 50:50. The essence of this arrangement is that artists and the record company benefit from both the risk/reward available through the successful sale of records with the artist who makes the money available to talent and the record company to realize this talent. The recording fee is usually funded by the record company. In the case of traditional “points” agreements (for which a royalty is paid to the artist as a percentage of the retail or distributor price of each disc sold), the recording costs incurred by the record company are recovered from the artist`s licence fee. In the case of agreements such as this (usually referred to as “net profit agreements”), registration and all other costs are recovered by the record company on gross income before the rest of the pot (net income) is shared between the record company and the artist. However, if the sales are not sufficient to recover the cost of the recording, it is important that the artist is not required to reimburse the record company some of these expenses not repaid out of his own pocket (as a contractual debt).