What is the Controlled Composition Clause?
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Are you a songwriter and an artist? If you plan to sign to a label and release your music, watch out for the Controlled Composition Clauses! What are these feared clauses you may ask?
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As a songwriter, when you write a song that is sold and released to the public, you are owed a mechanical royalty. In many countries this royalty is set at a percentage of wholesale. In the United States, that rate is currently at 9.1 cents for a song under 5 minutes in length. When you sign with a label as an artist, the mechanical royalties you are owed as a songwriter are different from your artist royalties as they are not subject to recoupment and they represent immediate out of pocket costs for the label. Because of this, many labels add “Controlled Composition Clauses” to their recording contracts that reduce, limit, and suppress many mechanical royalties you may be earning now or in the future [...]