Sampling Music, Part 3 of 3: How do I negotiate the sample clearance fee(s)?

(cont. from The Hollywood Lawyer blog post, “Sampling Music Part 2 of 3: How do I get permission?“)

So, at this point, assuming that you now have the copyright owner (i.e., publishing company, songwriter) and/or master recording owner (i.e., record label) on the phone, it’s now time to talk money and see how much $ you are willing to put up to pay for using the sampled music.

The costs for using a music sample vary tremendously, based on the how popular the song and/or the master recording was and is, and the clout of the artist involved. Sometimes, it’s easy to go ahead and obtain a buy-out of all rights in the sample for a one-off flat fee – and this is the most ideal for you because you wouldn’t have to worry about paying out royalties later on. Yet, a lot of major artists will probably require an advance, from anywhere in the few hundreds to a couple thousand, along with future royalty payments, factored at anywhere from 1 to 5 percent on each record sold, or even up to 50-100 percent of the publishing income for your song. And so, if you really want to stay clear of getting ripped off while still taking care of business, by all means, please hire a music attorney who can be your point person in negotiating this all out for you.

Besides simply the structure and amount of compensation for the sampled music, other issues like song ownership and royalty splits have to be sorted out as well. As such, the ways in structuring such compensation vary, from either being a flat fee one-off (i.e., one-time $ pay off), to being rolling (i.e., $ upon each milestone achieved – album release, every 100K units sold, etc..) or ongoing (i.e., $ of statutory mechanical rate for every unit sold). And then to top these all off, you would need to make sure that you’re giving due credit to the sample owners wherever necessary, along with obtaining further rights and warranties, and squaring away provisions on accounting and pay-outs with the other parties as well. Thus, at this point, it’s highly recommended that you hire and have your music attorney step in and co-lead the discussions from here on out.

Music sampling isn’t complicated but sometimes it can get very messy especially when you feel that you absolutely need the music sample but the copyright owner and master recording owner are being unreasonable about the fees you are to pay. Yet, no matter how frustrating it may be, never use music samples without obtaining the proper clearance and licenses, as you can be liable for statutory damages otherwise, ranging anywhere from $500 to $20,000 for a single act of copyright infringement, and a lot more if the court determines that your infringement was willful. So, our two cents for you: always have a music attorney that you can call up and be able to retain at any time. Maybe start with us. =)

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At The Hollywood Lawyer in Los Angeles, our entertainment attorneys are committed to assisting all talent (actors, artists, singers, writers, dancers, directors, producers, directors, editors, engineers, executives), entertainment companies (film studios, recording facilities, record labels, management companies, agencies, publishing companies, film studios, distributors), start-ups, small businesses,filmmakers, music makers and social entrepreneurs,with all of their personal, career, business and/or charity law needs be it talent representation or accompaniment through a deal or negotiations.
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