Re: Licensing of sound recordings

On Thu, Apr 01, 1999, Jennifer Van Kirk <jvankirk[_at_]lrlaw.com> wrote:
>
> I have a client who is in the process of licensing a sound recording,
> but is not sure what the typical licensing fee/royalty rate is. If
> anyone has suggestions or would like to share their experiences on the
> typical royalty rate charged for sound recordings, or the best way to
> negotiate a rate, they would be greatly appreciated.

Gosh, this is like asking the list "how much should I expect to pay for a car?" There are too many variables to give more that a guesstimate. The type of music, whether the license is exclusive or non-exclusive, the popularity of the recording artist, etc. have a significant effect on both the advance and the royalty rate.

Generally a license fee is treated as an advance against future royalties. License fees are generally an estimate of what the anticipated royalty for the sound recordings will earn over the first year or two of the license, but sometimes can be quite minimal - it is all just a matter of negotiation. Royalty rates for licenses are generally a bit higher than they are under recording agreements since the risk to the licensee is less as they are not paying recording costs and know the product they are receiving, as opposed to the Licensor who paid for the recording to be made. Royalty rates generally start at 12 - 14 points (a percentage of the suggested retail price) but many overseas licensors prefer to work on a wholesale royalty basis, which is generally twice a retail based royalty.

I hope this has been at least slightly helpful.

Dave Stein
<dave[_at_]davestein.com> Received on Fri Apr 02 1999 - 16:44:50 GMT