Be sure to clarify if your contract has one.
Some recording contracts contain what is called a controlled composition clause. It applies to compositions written by the contracted performing artist (“controlled” compositions - meaning the artist also controls the songwriter rights), and it affects the amount of mechanical royalties paid back to the songwriter.
Controlled composition clauses commonly attempt to establish a contractual mechanical rate limited to 75% of the full statutory rate in the U.S. (currently that would be 6.82 cents/song rather than the full rate, 9.1 cents/song) for all controlled compositions. In some cases, in addition to a lower rate per track, the contract may contain a maximum mechanical royalty limit for an album regardless of the number of tracks on it.
For example, if the agreed-upon rate is 10 songs at 75% of statutory rate (that’s 6.82 cents per song, or 68.2 cents per album) and the artist puts 12 songs on the album, the rate for each individual song would be reduced to 5.68¢ per song, or the contractual limit of 68.2 cents per album divided amongst 12 tracks.
The controlled composition clause as a contractual norm is unique to the United States. Because these clauses are to the detriment of the artist-songwriters they apply to, the industry is trending away from requiring them. It’s possible that your label may have even removed the controlled composition clause from existing and future contracts, as BMG did in the fall of 2020.
Always consult legal counsel when reviewing a contract, so that you have a full understanding of what you are agreeing to and qualified advice
Disclaimer: This article is for educational and informational purposes only and not for the purpose of providing legal advice. The content contained in this article is not legal advice or a legal opinion on any specific matter or matters.
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