March 7, 2012

Film Scoring Contracts

Understanding Your Rights
2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College) 1

The Plan
Introduction
What is a contract? What is its purpose? Who can help?

The Contract in Practical Terms Rights allocations Important Contract Miscellany Case Study Negotiation Points

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

What is a contract?
Acceptance Offer

Consideration

Contract
2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College) 3/11/12

What is the purpose of a contract?

Set expectations that will govern the relationship

Delineate the mutually agreed obligations of each party.

In the event of a default, having an enforceable document.

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

When do you need a lawyer?

As early in the process as possible Why do you need one?
To help negotiate the deal To review terms To advise on the quality of the agreement To advise on the specific terms

If you dont have the money, you can still get help!

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

Pro Bono Resources

University Services Harvard Recording Artists Project Harvard Transactional Law Clinic Pro Bono Services Volunteer Lawyers for the Arts

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

Harvard Law School Recording Artists Project

What? Who? Where?

Pro bono legal services for local musicians, venues, producers, labels, and anyone with a music industry tie

Teams of eager Harvard Law students under the supervision of Harvard Law professors

www.recordingartistsproject.com

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

Who are the parties?

You (the composer)

Who are you contracting with?

A producer? Multiple producers? A company? Multiple companies?

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

What are your services?

What are you providing?
How many minutes? Write the music AND record it AND spot it AND mix it? Are costs (musicians/studio time) included in your fee? Budget? Subject to approval? Revisions?

Nature of the music?

All underscore? Theme music? Original songs? Separate promotional music? Versions?

Purposes?
Film only? Promotional uses?
Theatrical Trailers? TV/Radio spots?

Soundtrack albums?

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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What are you expected to deliver?

Score in notation? Recorded mix?
Stereo or surround sound reduction? Sample rate and bit depth? Stem mixes? Versions? Multi-track session files? (i.e., Pro Tools files) On a CD or hard drive?

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Where is each party?

Where should they send the raw elements?

Where should you turn in the deliverables?

Upon completion, where should they send the check?

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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What are the relevant time commitments?

By when must you have completed your obligations?
Watch out for time is of the essence clauses! EXCLUSIVITY!

By when must they have completed theirs? Are there any other landmark obligations?
Completion of the score by a certain date? Recording by a certain date? Delivery by a certain date? Attendance required on a certain date? Spotting? Film Mix? Premiere? Press?
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2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

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When do you get paid?

Package deal?
All up front or upon satisfactory delivery? In installments? Execution/delivery/approval Spot/commence/complete

Back end compensation?

When/how is your compensation calculated and distributed? When/how/how often can you verify?
2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College) 3/11/12

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2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Copyright Basics
Sound Recording
Works that result from the fixation of a series of musical, spoken or other sounds

Composition
Musical works, including any accompanying words that are fixed in some tangible medium of expression.
2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College) 3/11/12

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Rights in the Composition

Synchronization Right
Right to record the music in synchronized or timed relation to the pictures in a film or video.

Performance Right
Right to perform publicly the music that is recorded under the Sync right.
2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College) 3/11/12

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Rights in the Sound Recording

Master Use License

Right to the Master Recording for a motion picture

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2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

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Rights Allocations

Grant specific uses to the film company for limited time

Assignment
You give the rights to the film company

Rights belong to the film company

License

Work-for-hire

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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F I L M

S C O R I N G

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Authorship
The Copyright Act Copyright of a sound recording rests initially with the author or authors of that recording. Scenario A composer enters into an agreement with a film company to provide the underscore for a motion picture. Who is the author?
2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College) 3/11/12

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The Work-for-hire Classification

Work-for-Hire

Hiring party = author and copyright holder of work

Hiring party (the employer or qualifying commissioning party)

No written agreement to the contrary

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Answer

Composers contribution is characterized as a work-for-hire

Film company = author

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Belt and Suspenders

What if, by law, it is not a work-for-hire?

What will the contract stipulate?

Assignment in perpetuity

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Ghost Writing
Work-for-hire relationship No Work-forhire relationship
In exchange for $, you sign over your right to receive credit for your work.

Additional Confidentiality agreement

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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S O U N D T R A C K S

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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What the Composer Typically Receives

Mechanical license
The right to reproduce and distribute to the public copyrighted musical compositions On any fixed, tangible mediums other than what accompanies motion pictures and other audiovisual works

Usually paid 50% of the mechanical license receipts of the original publisher
No fixed statutory rate Little leverage to negotiate

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Industry Standards

Motion picture producers are reluctant to grant film composers the right to collect royalties on sales of soundtrack recordings.

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Miscellaneous Deal Points

Screen Credit Performing Rights Organization Notices and Payments Representations and Warranties

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Screen Credits

Single-card credit in the main or end title

Same length and duration as other relevant parties

Credit in paid, print ads where the full billing block appears

Remedy: Companys best efforts to fix the error

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Soundtrack Albums
You must ASK. At a minimum, insist on back cover credit. The record company controls.
2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College) 3/11/12

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Performing Rights Organizations

Which performing rights organization represents you will be specified. Matter of convenience.
The information remains easily accessible and contained within one document. It makes it easier to communicate and bargain with other parties if they know everyone involved.

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Notices and Payments

Sent to the address and in the manner specified in the contract. Information contained is important. Pay attention!

Notify the company of any changes in your address or contact information.

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College) 3/11/12

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Representations and Warranties

What you promise is true.
The originality of the composition No violation of third party rights No liens or encumbrances rest on the score at the time of contract The producer is free to use the score

What if it is not?
Company can terminate the contract You may be able held liable for the resulting damages

What the company promises.

Recognizes originality Will not contest copyrightability
2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College) 3/11/12

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Case Study Sample Film Contract

Who are you licensing to? On what are they basing your fee calculation?

For what can they use your score?

Is the contract complete?

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Who are you licensing to?

The licensee will be specified in the opening paragraph of the contract.

Make sure you are licensing your music to just one entity.

The artists contract licensed his score to each of the three producers meaning that any one of them could use his music as specified in the contract.

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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On what are they basing your fee calculation?

Different bases allow for manipulation and favor certain parties. It is likely you will not be compensated properly. Audits are time-consuming and expensive. Relevant statutes of limitations and incontestability clauses could lock out your claim.

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Compensation Bases
Clear and easily verifiable Most favorable to studios All costs are recouped before you are paid so this allows for the most manipulation. This includes box office receipts plus any ancillary revenue from TV, soundtracks, video games, etc. This is the same as gross receipts with the only reduction being the offthe-tops, which are standard industry expenses and easy to calculate and verify.

Variety Box Office

Net Profits

Gross Receipts

Gross After First Dollar

This is the same as gross receipts but you do not start collecting until the company breaks even. The breakeven level is set initially at the time of contract based on current projections.

The studio will set the level of cash it must recoup before sharing profits with artists.

The studio sets a level it thinks it ought to recoup before the artists accrue fees. This can be set anywhere within the studios discretion.

Gross After Actual Breakeven

Gross After Cash Breakeven

Gross After Artificial Breakeven

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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For what they can use your score?

Only in connection with the picture.

The picture itself Trailers Advertisements

Producers do not have to pay if the Masters were not used in the final edited version of the Picture as generally released.

What if the score is used at film festivals and but rescored before its general release? What happens if only some of the score is used?

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Is the contract complete?

Incomplete All terms are complete
All expectations, rights, and obligations defined and clear Terms are left to be negotiated in good faith Contract may be held invalid by a court Missing terms may be interpreted according to set statutory frameworks

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Negotiating Your Contract

Identify

Parties Issues BATNA Interests

It is not really a negotiation

Approach the discussion as if you are asking for a favor. Figure out what your counterpart is willing to give. Know what is most and least important to each party.

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Negotiating Your Contract Be Prepared

Think through various options. List negotiable terms and set acceptable ranges. Are there any objective standards or criteria?

How are you going to present yourself?

Consider your current relationship.

What reputation does his company have in the industry?

Even if you are desperate, hide it!

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Negotiating Your Contract Increasing Your Leverage

Alternatives Assumptions Ego

Passion

Leverage
Allies Process

Momentum

YOU

2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College)

3/11/12

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Resources Available
National
Local Volunteer Lawyers for the Arts: http://www.vlany.org/legalservices/vladirectory.php

Harvard Law School

Recording Artists Project: http://www.recordingartistsproject.com/ Transactional Law Clinic: http://www.law.harvard.edu/academics/clinical/tlc/ clients/entertainment.html

Further Reading
All You Need to Know About the Music Business by Don Passman
2012 Recording Artists Project of Harvard Law School (President and Fellows of Harvard College) 3/11/12