What should I negotiate for the use of my song?

June 19, 2008 9:56 PM

What should I negotiate for the use of my song on a compilation?

I have another licensing question. A (presumably small) Japanese record label wants to put one of my tracks on a compilation. They'll print 1000 copies at first which will be mostly distributed in Japan but some in the US. They will also sell the compilation on iTunes. They said the license is non-exclusive, the territory is world-wide, and they offered me 5 free samples and $150.

I thought that sounded pretty good, but I was thinking I should stipulate that this license is only for the 1000-copy run and we'd have to re-negotiate if they did another run, and that I should get a percentage of the iTunes sales. But then I was thinking maybe I should say no to the iTunes part together, since I already sell the song on iTunes myself, and why would I want them selling the same track there?

Does that make sense? Is there anything else I'm not thinking of?

posted by ludwig_van to Media & Arts (8 answers total)

First of all, it's doubtful that the compilation will get meaningful distribution in America at all. Occasionally "big" artists will see their Japanese CDs (one with bonus tracks or ones that aren't available in any form in the US) will see some distribution . . . but typically, you're talking (at most) a couple of thousand copies entering the market. And again, those tend to be big artists with fanatic cults. So I'd disregard this aspect of your situation almost entirely.

Second, aside from obvious huge sellers, the Japanese method of releasing CDs is to only a distribute certain amount, and when they're gone, they're gone. (This is especially true of reissues and of new compilations.) So they'll figure, well, we can sell 1500 copies of this Harpers Bizarre CD . . . so they print up that many copies and that's it. They're very good at estimating how much they can sell in "X" amount of time, too. Years later, they may do a second run until similar circumstances. But the idea is to not keep a zillion titles in print all the time, and to cut down on returns (the "limited edition" nature of many CDs helps this) and warehousing and all that. It also makes bookkeeping much simpler. So in short, YES, there will be a renegotiation if they decide to press more . . . but so what? Ask for 50% more, since origination costs have been taken care of, and be happy.

As for iTunes, it's different in Japan from the US . . . as far as I know, if you're on iTunes US, you're probably NOT on iTunes Japan. So there's not really a conflict.

In any case, if they're only doing 1000 copies, iTunes sales will not likely be huge. And it's worth the exposure anyway. I know loads of UK and US artists who were "generous" in offering up tracks for *free* to Japanese compilations and whatnot, and some of them were amply rewarded by the acquisition of a decent (and typically very loyal) Japanese fanbase.

$150 is kind of a token thing - the cost of your time and sending a CD-R or DAT or whatever. And it'll be nice to have your tune on a nicely packaged Japanese CD - something cool to show your friends and family. I wouldn't blow it by being picky - this is smalltime rock & roll. They've limited the contract to 1000 copies - unlike the theoretically unlimited potential of your other licensing question, as unlikely as that may have been. If you're happy with $150 for that, just sit back and imagine your forthcoming Japanese fame!

I would'nt think twice about doing this. Good luck!
posted by Dee Xtrovert at 10:31 PM on June 19, 2008

Response by poster: The song is already on iTunes US, Japan, Australia, Canada, and UK.
posted by ludwig_van at 10:45 PM on June 19, 2008

I'm curious as to what happens on iTunes when a song appears on a compilation and also an artist's own album, and the compilation copy is purchased. The 'copies,' even if they are identical, compete with each other.
posted by troybob at 10:46 PM on June 19, 2008

Even if the song's on iTunes Japan twice (via you and via the compilation) I doubt that they would compete much with each other. Sure, if someone does a search for your band name, they might buy the copy on the compilation instead of one you offer, but it's much more likely that they'll arrive via your promotion (i.e. your website or a concert or a friend of yours) or via their promotion (i.e. their website).

I'd do it and I wouldn't quibble... It's great promotion for you, even if it's only something you can point to and say "we appeared on compilation X in Japan." It makes you look much more legitimate for future compilations, record contracts, licensing opportunities, etc.
posted by mmoncur at 12:02 AM on June 20, 2008

If a song is on a compilation album on iTunes released on Label A and also available on the artist's album, Label B, and someone buys the compilation, the royalties are paid to Label A. Label A typically will have licensed the track from Label B (or the artist directly) so they'll have to pay a percentage of that fee back.

As for iTunes international, if a label supplies an album to iTunes they have to specify the international rights they hold for that release. If they list those rights as worldwide, iTunes will make it available on all of its sites.
posted by gfrobe at 12:51 AM on June 20, 2008

i know this wont help you, but id love to know what song we're talking about here :p
posted by freddymetz at 4:55 AM on June 20, 2008

*obligatory disclaimer* I Am Not Your Lawyer *obligatory disclaimer*

"I should stipulate that this license is only for the 1000-copy"

Yes, you should. They, very likely, are expecting just that.

"I should get a percentage of the iTunes sales."

Meh. Unless you've already got a good income stream from iTunes I wouldn't let this kill the deal. Sure, if they're making money off your music then they should compensate you. But, which is going to be higher: physical CD sales or iTunes? Apple's going to take a big bite. Will that leave them - and by extension, you - much left? Since you're already selling on iTunes then you probably have a sense of the potential numbers. I'd let that drive your decision.

Another approach would be to cap the amount they could make before a percentage kicks in. That provision would avoid the situation where you grant them a free license to exploit on iTunes and the compilation sells millions. If you can negotiate it, they might be agreeable to some type of percentage after the track or album sells "X" number of downloads. Again, I'd let your sense of potential income to drive your decision about whether this provision should kill the deal.

I don't know where you are, but I presume not in Japan. I'd ask to be put on their mailing list or otherwise get updates from the company. There's always an outside chance that they'll exploit your song beyond the license: by putting it on another compilation; extending the run; or somesuch. Intentionally or otherwise, clearing licenses doesn't always click with labels and distributors. Specifically, you could ask for a periodic formal report (an accounting) about the status of the compilation and your license. If the deal were bigger I would absolutely require that. Though, for a small limited run with a flat licensing fee (as opposed to percentage), it might be simpler for them (and you) to watch their advertising.

As alluded to by Dee Xtrovert, Japanese fans are awesome.
posted by GPF at 6:56 AM on June 20, 2008

Best answer: I discussed my concerns with the label guy, and he explained that there won't be an issue of competition on iTunes, as the song is tracked by its unique ISRC number. So it seems that someone downloading the song on iTunes as part of the compilation would be the same as them downloading it as part of my album. So I agreed to the original terms.
posted by ludwig_van at 8:28 AM on July 2, 2008