Help - Edit Artist/Producer Contract

General Information

The Edit Artist/Producer Contract page allows the user to enter general contract information and configure the terms of the contract.



The Edit Contract page contains three sections:

"Contract" section:

The contracts section allows entry of basic information for the contract, including selection of the associated payor and payee.

Contract Title
- The name of the contract as configured in the system. This name is assigned by the user.
Artist
- The name of the artist as it appears on the contract. This field is optional, and is informational only.
Contract ID
- The contract ID that appears on the contract. This field is optional, and is informational only.
Payor
- The payor associated with the contract, selected from a drop-down of available payors. Statements for the contract will only appear in royalty runs for the payor listed here.
Payee
- Statements for the contract will be produced for this payee in royalty runs. Use the Payee Lookup function to select a payee by clicking on the icon in this field.
  • Multiple contracts can be assigned to the same Payee. All associated contracts will appear on one statement.
Date Issued
- The date the contract was issued. This field is optional, and is informational only.
Term Start
- Notes the start date for the contact. Only sales that occur after the term start date will be included in artist royalty runs for the contract.
  • If "Term Start" date is left blank, all sales up to the "Term End" date will be included in artist royalty runs for the contract.
  • If "Term Start" date and "Term End" date are blank, all sales will be included in artist royalty runs for the contract.
Term End
- Notes the end date for the contract. Only sales that occur before the term end date will be included in artist royalty runs for the contract.
  • If "Term End" date is left blank, all sales past the "Term Start" date will be included in artist royalty runs for the contract.
  • If "Term End" date and "Term Start" date are blank, all sales will be included in artist royalty runs for the contract.

"Contract Terms" section:

The contract terms section allows for the configuration of payout rates against the contract for different types of sales being processed in the RoyaltyShare system.

The following information is viewable in this section and available for the configuration of contract terms:

Priority
- The order in which sales process against the contract. Sales processed for attached albums and/or tracks will attempt to match the criteria provided in the first contract term, Priority 1, first. If they do not meet those criteria, they will attempt to match to the second term, Priority 2, and so on, until they reach the default term.
  • Sales that do not match criteria for a contract term on any existing contract will show on the Unallocated Sales audit report, available with each artist royalty run created.
  • To change the priority of terms, click on the appropriate arrow to move a term up or down.
Source
- The original source of the sale, generally appearing in sales information as the format of the sale for a given transaction. The following source configurations are available for artist/producer contracts:
  • All – All available sources
    • All Physical – All physical sources
      • CAS – Cassette
      • CD – Compact Disc
      • CD2 – Two Compact Disc Set
      • CD5 – Compact Disc Single
      • DVD – Digital Versatile Disc
      • DVDCD – DVD Audio/Dual Disc
      • LP – Vinyl (Long-Playing)
      • LP5 – Vinyl (Long-Playing) single
      • VHS – Video Home System
    • All Digital – All digital sources
      • BG - Background
      • DA – Digital Album Permanent Download
      • DA-P – Digital Album Permanent Download, Premium
      • DA-U – Digital Album Permanent Download, Upgrade
      • DD – Dual Permanent Download
      • DS – Digital Stream
      • DT – Digital Track Permanent Download
      • DT-P – Digital Track Permanent Download, Premium
      • DT-U – Digital Track Permanent Download, Upgrade
      • DTETH – Digital Tethered Download
      • JB – Jukebox
      • RING – Ringtone
      • VPD – Variable Priced Download
Region
- User-defined country or group of countries from which a sale must originate to process against the contract term, generally appearing in sales as territory information. Regions and their associated countries can be configured on the Admin tab.
Channel
- The distribution channel associated with a sale to process against the contract term. Applies to physical sources only. The following Channels can be configured for contract terms:
  • All
  • Retail
  • Military
  • Club
  • Mail Order
  • Direct
Price
- The reported price required for sales to process against the contract term. Applies to physical sources only. The following price levels are available:
  • All
  • Full
  • Mid
  • Budget
  • Promo
Rate Type
- Designates the price or value that will be used to calculate royalties. The following rate types are available:
  • % Retail – rate is applied against retail prices that are configured for the source within the system.
    • Retail prices can be managed on the Admin tab and assigned to individual products on the Catalog tab.
  • % Wholesale – rate is applied against wholesale prices that are configured for the source within the system. Wholesale prices can be managed on the Admin tab and assigned to individual products on the Catalog tab.
  • % Net Revenue – rate is applied against the total revenue received.
  • % Retail Document – rate is applied against actual retail price reported in the original sales file.
  • % Wholesale Document – rate is applied against the actual wholesale price reported in the original sales file.
  • Fixed – Uses a fixed value per unit (in the base currency of the site) that is configured in the "Rate" variable.
  • Non-payable – allows configuration of sources where no artist royalties are due. No rate information is entered against non-payable sales, as no payout is made for sales processed against the term.
    • Non-payable sales are only reported in the online version of the artist statement.

Note that the following conditions must be met for a sale to process against the rate types "% Retail Document" and "% Wholesale Document" and show the respective reported price on statements:

  • The sales record must report retail or wholesale price, depending on the selected rate type, in a separate and distinct field.
  • The sales record must have been imported after March 31st, 2010, when document retail and wholesale rate type features went into effect.

Rate
- The rate used for payment, as calculated against the rate type, or the set value for payment.
Rate Reduction
- The percentage of the rate that is payable, which can be greater or less than 100%, though generally an adjustment to rate reduction is made to lower the rate payable.
% of Sales
- The percentage of sales to be paid out, which is a reduction in payout, varying by the type of royalties. Cannot be greater than 100% of sales.
  • For unit based royalties, the % of Sales reduces the number of units to be paid out.
  • For net revenue royalties, % of Sales is applied against the base rate.
Packaging
- A packaging deduction that is applied against the base rate. Cannot be greater than 100% of sales.
Free Goods
- The percentage of free goods allowed on gross units or sales. Cannot be greater than 100%.
  • For unit based royalties, Free Goods further reduces the number of units to be paid out.
  • For net revenue royalties, Free Goods further reduces the total amount of sales to be paid out.
Delete
- Allows the deletion of contracts terms. To delete a term, select this checkbox and click Update to save changes.
  • Note that a term with pending reserves cannot be deleted. For these terms, the checkbox will be grayed out, and a help icon will be available as an explanation.
Default Term
- A default term can be configured for all sources, all regions, all channels, and all prices to process sales at a percentage of net revenue. No reductions in rate can be made to the default term.
  • If you do not want to use a default term on your contract, you can inactivate the default term by selecting the "Inactive" checkbox when editing your contract. A message will then show on the main View Artist/Producer Contract page noting that "The default term is currently inactive."

"Reserves" section:

The reserves terms section allows for the configuration of reserves against the contract. Reserves are only taken for physical product sales.

Reserve Rate
- The percentage used to calculate the amount of reserves to be held for an artist royalty period. Cannot be greater than 100%.
  • For unit based royalties, Reserves are taken as a percentage of units.
  • For net revenue based royalties, Reserves are taken as a percentage of sales.
  • Reserves are only taken for physical product sales.
Liquidation Schedule
Determines the release of reserves held during the mechanical royalty period. If a reserve percentage is entered, you must enter a liquidation schedule that totals 100%.


Artist contract royalty calculation for Retail / Wholesale rate type (Unit Royalties)

Effective Rate = Sales Price * Rate * Rate Reduction * (100% - Packaging)

Net Units = (((Gross Units * % of Sales) – Reserves + Liquidations) * (100% - Free Goods)) – Returns

Reserves = Gross Units * % of Sales * Reserve Rate

Total = Effective Rate * Net Units


Artist contract royalty calculation for Net Revenue rate type (Net Revenue royalties)

Effective Rate = Rate * Rate Reduction * % of Sales * (100% - Packaging)

Net Sales = (Gross Sales – Reserves + Liquidations) * (100% - Free Goods)

Reserves = Gross Sales * Reserve Rate

Total = Effective Rate * Net Sales