It is also important to ensure that the agreement contains provisions, that the songwriter conducts a review of the publisher`s books, and that the publisher bears the costs of such a review when an essential underpayment is discovered. The world of music begins with a creative effort – the song. What happens next with this song is the music business. Often, the first contact a songwriter has with this business side of music is by dealing with a music publishing house. This relationship may be one of the most important that a songwriter will ever have, since the role of the music publisher is to exploit the song (bring the artists to record it; bring the song into movies, TV series, video games, commercials, ringtones and rings, dolls and toys, musical greeting cards, etc.); negotiate contracts with all those who want to use the song (film and television producers, advertising agencies, video game companies, etc.); to protect the song (copyright of the song, prosecute violators, record the song at ASCAP, the Harry Fox agency, collection companies from foreign countries, etc.); and collect all the proceeds from the song from all sources (except the author`s share of the performance money) and pay the songwriter his share according to the song/music publishing contract. Many argue that songwriters must be careful to sign contracts with publishers that will not do more than negotiate as banks – collect money from collection companies, keep them for up to six months, and then pay it to the songwriter minus their percentage. A good editor will do much more and actively “work” the compositions they publish to save the recording of covers, synchronization in film, television, advertising and video games (to name a few). They will also hunt money that collection companies may have missed or mis-attributed, and generally try to speed up the “money trick,” which is the business of modern music. The other advantage the songwriter gains is that, in many cases, publishers make an advance that can help him pay the rent and feed himself by writing. Good publishers will also provide advice to the songwriter and help him organize co-writing contracts where appropriate and, if they are performers, they will often help, as well as songwriters, find and advise on record montages. With respect to income collected in non-U.S. countries, the agreements are either on the basis of net revenues, or on the basis of sources, or by a combination of net revenues for some regions and at source for others.
Under a net revenue agreement, the 50% of the songwriter`s royalties are calculated on the basis of foreign salary, less the fees collected by the publishing sub-house abroad. As part of an agreement to indicate the source, the 50% of the songwriter`s royalties are calculated on foreign income before the royalty collected by the publishing sub-house. An alternative to a traditional group agreement would be the creation of a limited liability company (LLC) and the development of a corporate contract that would almost resemble a group agreement, except that any member of the group would be a member. The advantage of this approach is that if the group enters into agreements with third parties, such as investors, the personal wealth of the group members would not be compromised. (ii) Coverage – these are royalties on the cover recordings of the compositions. The meaning of the cover is discussed in paragraph 1.6, and publishers traditionally require a reduced fee to be paid for these recordings to reflect their work in obtaining the songwriter`s coverage.