Recording Contract Royalties
If you are offered a deal by a recording company, you will be given a long contract with many parts to it. It is important that you look over this contract carefully, not only with your band members, but also with an entertainment attorney. This is because the terms and conditions of the contract ultimately decide how much money you could potentially earn from your work. As you want to maximize as much as you can on your talent, reading the fine print, especially about record contract royalties is absolutely essential.
Recording contract royalties specify how much money you will make off the sale of each CD. It is important that you make money from each CD as you will have to be paying your manager, your lawyer, and repaying the album for the studio costs of producing the CD. An artist who doesn’t negotiate a good contract could end up with some major cash flow problems. Take the time to do it right.
Royalties are generally calculated as a percentage of each CD sold at the suggested retail price. That means that you would get a fixed amount from each CD, even if the retail store decides to discount your CD at some point in the future. A suggested retail price is the best way to, as it guarantees you a fixed rate. However, you still need to be careful to read the fine print about single song internet sales, foreign sales, and any other kind of promotional sale that the label may engage in.
Recording contract royalties are usually set at a percentage between six and ten. Sometimes you may get a little bit higher, but then you are probably paying all sorts of other hidden fees. It is also possible to negotiate a sliding scale of royalties that moves up as you sell more albums.