Ancillary shares
With
Judge JulesJudge Jules explains ancillary shares - why major labels now take a cut of your live, branding and other income on bigger deals, and the gross-versus-profit point to negotiate.
What's in the course
46 lessons (1h 6m) · 1 free
01. Accounting
Free lesson1:16
02. Termination
1:29
03. Collection societies and letter of direction
0:26
04. Commission structure
2:32
05. Cross platform-multimedia aspects
0:39
06. Expenses
1:10
07. Key man provisions
1:01
08. A manager's obligations
2:33
09. Post term commission
1:30
10. Should a manager be involved in all aspects of an artist's income?
1:40
11. Term
1:46
12. Should a manager manage more than one artist?
1:24
01. Accounting payments and auditing
2:18
02. Ancillary shares
You are here1:58
03. Artist approvals
1:51
04. Artist promotional obligations
1:50
05. Assignment or licence - what's the difference?
3:17
06. Interplay with publishing
0:51
07. Options
1:39
08. Release commitment
1:26
09. Rights in the artist's name and brand
1:26
10. Royalty types
1:20
11. Territory of agreement
1:54
12. Warranties and indemnities
1:37
01. What are the most important areas of a contract for a new artist?
2:11
02. Is it normal that a music lawyer would meet me and listen to my case before charging me?
1:15
03. If a label, publisher or manager approaches me to sign a contract but I dont have the funds to pay for a lawyer, who should pay the legal fees?
1:20
04. Are 360 degree deals good value for an artist?
1:14
05. Am I still protected when it comes to copyright in the NFT or the crypto world?
0:26
06. Should I be wary of a publishing deal?
1:02
07. What protection exists for artists releasing their own music that don't have access to a lawyer?
1:03
Lesson transcript
Understanding Major Record Deals and Ancillary Income
In the longer term, more lucrative record deals are typically done with major labels.
Big Money Deals
- The big money deals, those six-figure contracts, have undergone significant changes in recent years.
- During the period between the demise of the CD and the growth of streaming, major record companies started to seek a commission on artists' other income.
Sources of Income
- Predominantly, this includes:
- Live income
- Income from branding and other opportunities within the artistic sphere
Negotiating Percentages
These bigger deals often come with substantial advances, but they also want a percentage, particularly of live income.
Here's what to consider:
- Negotiation Aspects:
- It's very difficult to provide a typical percentage because negotiations vary.
- One key question is whether the record label will commission on gross live income (the total income before deducting costs incurred from live performances) or on profit.
Typical Commission Range
- Typically, the percentage can range between 5% and 20%.
- The distinction between gross and profit is a hot topic for negotiation at that level of the deal.
The Need for Legal Advice
The chances of you not having a lawyer involved are slim.
- If you are offered an ancillary deal and choose not to seek legal advice, you are, dare I say, quite foolish.
- Generally, the level of deal at which ancillary shares arise always necessitates having legal counsel.
Controversial Aspects
- Ancillary shares are quite controversial; they didn't exist in the days of old.
- Some labels, particularly Sony, have discussed the reduction of ancillary shares, especially now that streaming income has risen to a point where record labels are making serious money again.
Conclusion
Ancillary shares are still something to be considered if you are signing one of those more intense, long-term record deals.
46 lessons
1h 6m of structured video lessons
Advanced video features
Slow down, loop a passage, follow along
Mobile, tablet & desktop
Practise wherever you are
100% satisfaction guarantee
30-day money-back guarantee
Meet your guru
Meet your guru
Jules O'Riordan has over 30 years of experience across the entire spectrum of the music industry. This includes nearly a decade as an A&R for the Universal umbrella of labels, 15 years as a presenter on BBC Radio 1, over 150 record releases and remixes in his own capacity as a recording artist, plus a 30-year career as one of Britain's best-known, globally-travelled DJs (Judge Jules), with over 5000 gigs under his belt, plus extensive experience as an event promoter and artist manager at the highest level.
Suffice to say, Jules knows the music industry inside-out, and his clients regard him as a trusted advisor for whom no legal or business affairs challenge or problem is too large or small.
Jules has been a lawyer for 10 years. His practice takes in the entire breadth of the music-focused entertainment industry. His legal and deal expertise includes management, recording, publishing, distribution and label services, music-based apps, games and tech projects, production deals, producers, featured artists, endorsements, merchandising, neighbouring rights, TV/film scores, live performance, events and venue agreements, plus copyright and rights infringement and many other disputes.
Jules's clients include artists, management companies, record labels, songwriters, event promoters, producers, music tech businesses, production companies, live agents, music publishers and DJs. He has spoken on many panels and seminars including ADE, Brighton Music Conference and AIM events, and has been a guest speaker on legal issues across a number of on and off-line media outlets, including BBC Radio 5 Live, BBC Introducing, Financial Times, The Sun, The Times and Mixmag.
Jules speaks fluent Spanish.
Who better to demystify the contracts and deals every musician eventually faces? In his course, Jules turns three decades of hard-won industry knowledge into plain-English guidance, so you can understand the business side of music and protect your work long before you sign on the dotted line.
