Help - Controlled Composition License
The controlled composition license allows the user to create mechanical licenses that are based on controlled composition terms configured in the assigned artist contract.
The controlled composition licenses use the terms associated with the contract that was assigned in the main license tab "Contract for Controlled Composition." Only one controlled composition clause can be used for licenses on an album. Licenses configured for a penny rate can be used if more than one contract exists with a controlled composition clause for an album.
Controlled licenses are broken into two sections:
"Track" Section:
Lists the track title, album title, and artist name associated with the track where the controlled composition license is being applied. This is informational only.
"Controlled Composition Clause" Section:
This section allows the user to configure share and publisher-level details associated with a controlled composition license.
- Region
- - Notes which region’s sales will be processed against the mechanical license. The user can assign any configured region to a license, with sales from the countries configured for that region being processed and paid out for the license.
- Regions are configured through the "Admin" tab, "Regions" section.
- A region can be configured with one or more countries.
- The system will not let a second license be created for the same track, product type, and publisher if there is a common country configured in the regions assigned to the two licenses.
- Share
- - Notes the publisher’s percentage of ownership of the track’s publishing rights. When calculating mechanical royalties the share is taken off of the base royalty rate.
- Payor
- - Notes the payor that is associated with the license. Mechanical royalty runs are controlled and run at a payor level. Assigning licenses to a specific payors will control your reporting schedule by setting up a monthly, quarterly, and/or semi-annual payor. You may also set up a payor for each of your sublabels, and assign licenses to each.
- Publisher
- - Notes the name of the publisher associated with the license. Publishers are added and configured through the "Payees" tab. When a publisher is applied to a license the publisher’s associated administrator and agent are automatically noted on the license. Publisher administrator and agent settings are controlled through the "Payee" tab publisher interface.
- Admin
- - Notes the administrator for the assigned publisher as configured in the publisher setup.
- Licenses will appear on the administrator’s statement in the detail section for the associated publisher.
- Agent
- - Notes the agency for the assigned publisher as configured in the publisher setup.
- Licenses will appear on the agency’s statement in the detail section for the associated publisher.
- Publisher Direct
- - By selecting the check box, the license will be paid out directly to the publisher and not to any associated admin or agent configured for that publisher.
- Issuer License ID
- - Notes the ID provided by the publisher when the license was issued. The license ID is reported in the publisher’s electronic version of the statement.
- Status
- - Determines if the license is active or inactive.
- Inactive licenses are not included in mechanical royalty runs.
- Inactive licenses are not included in mechanical royalty runs.
- "Inactive Licenses" report lists all licenses that are set to inactive.
- Date Sent
- - Notes the date that a request for a mechanical license was sent to the publisher. "Date Sent" is informational only and does not impact mechanical royalty runs.
- Date Received
- - Notes the date that a mechanical license was received from the publisher. "Date Received" is informational only and does not impact mechanical royalty runs.
- Term Start
- - Notes the start date for the mechanical license. Only sales that occur after the term start date will be included in mechanical royalty runs for the license.
- If term start date is left blank, all sales up to the "Term End" date will be included in mechanical royalty runs for the license.
- Term End
- - Notes the end date for the mechanical license. Only sales that occur before the term end date will be included in mechanical royalty runs for the license.
- If term end date is left blank, all sales past the "Term Start" date will be included in mechanical royalty runs for the license.
Controlled Composition Calculation:
The amount paid out for a controlled composition license is determined using the following process:
- Determine the total mechanical amount that the label is obligated to pay out as configured in the controlled composition clause within the assigned artist contract.
- (Track Cap * Controlled Comp Rate = Total Payable)
- Note that if the Track Cap is greater than the number of tracks on the album, the actual album track count will be used in place of the Track Cap on the contract.
- Account for all NON controlled licenses. Standard mechanical licenses get paid out as the license is configured and are not affected by the controlled comp clause. Only controlled licenses are affected.
- (Sum of all configured mechanical licenses = Total Mechanicals)
- Note that % share is accounted for when determining a specific mechanical license amount payable.
- Tracks that do not have a license assigned but have track timing defined will be assigned a full stat mechanical rate as a placeholder for the expected license.
- Tracks that do not have a license assigned and also do not have track timing defined will be assigned a min stat mechanical rate as a placeholder for the expected license.
- Determine remaining payout available for controlled tracks
- (Total Payable – Total Mechanicals = Remainder)
- Note that % share is accounted for when determining a specific controlled license amount payable.
- Calculate the amount payable for all configured controlled tracks by prorating the Remainder over all controlled licenses. This prorated amount becomes the Effective Rate for controlled tracks on the album.
- (Sum of amount payable for all controlled tracks = Total Controlled)
- Note: It is possible for controlled licenses to become negative if the non-controlled payout exceeds the Total Payable. Label Advantage does process and report on these negative licenses but does not allow them to be crossed with other licenses. Label Advantage does NOT reduce artist royalties with these negative licenses.
