The term “standard contract” can be thrown around with some looseness, so I prefer to say “common provisions” instead of “standard contract.” One publishing company’s “standard contract” may not meet the “standard” of another company, if you get my drift.
So let’s address the hairy, and often-contentious provisions of the “Minimum Commitment” and the “Minimum Delivery Release Commitment.”
The term “Minimum Commitment” may be worded differently from contract to contract (i.e. Minimum Delivery Commitment, Minimum Delivery Release Commitment), but all of it basically means the same thing. This contract provision places a quota on the songwriter.
There are many “flavors” to this provision. Some Minimum Commitments are entirely fair and easier for a songwriter to comply with. Others are impossible to fulfill, even for the most successful and seasoned songwriter.
The nicer version of the Minimum Commitment says the writer must write something like 10 to 12 songs within a year. The caveat is that these must be 100% written songs. That means if the writer co-wrote two songs with an artist at 50% - those two songs equal “1” song for the Minimum Commitment. Collaboration is the name of the game when writing hit songs, so most writers deliver more songs because of frequent co-writing.
So, why place a quota on the songwriter? This isn’t a “sales” job, right? The Minimum Commitment provision is an incentive for the writer and a safety valve for the publisher. If the writer doesn’t deliver, the publisher can extend the current term and/or suspend advances until the commitment is met.
Let’s put on the publishing company’s shoes for a moment:
Imagine we shelled out a $50,000 advance. We are paying for songs to work and license in the marketplace, in advance, of knowing what the songs actually sound like. This is a gamble in and of itself. The songwriter is now obligated to write the new songs under our agreement and the publisher has to hustle to make their money back.
This is why the $50,000 advance would typically be disbursed in monthly installments. We’re paying for the songs, ideally, as the writer delivers new songs each month. Of course, for the more seasoned creator, sometimes previously written and commercially recorded songs will be included in the deal. This is much safer for the publisher because they can start collecting income immediately while reducing their risk and recouping advances faster.
The takeaway here is this – the publisher’s copyright and cash flow assets are entirely dependent on an individual to write and deliver marketable songs. The songwriter’s livelihood and career also depends on the publisher doing their job to work and license the songs in the marketplace. Usually, if the songwriter doesn’t deliver 50% of the Minimum Commitment within something like 6 months, the publisher can suspend advances and the agreement is essentially “frozen” until the writer starts to deliver the songs.
This happens sometimes, unfortunately. For example, I knew of a songwriter that just stopped sending songs to the publisher. When pressed to deliver them, the writer eventually bombarded the publisher with a batch of really terrible songs. The writer was saying, in effect, “Here’s some songs, now leave me alone.”
But most Minimum Commitments also specify the songs have to be “satisfactory” to the publisher. In this story, the publisher had enough of the writer’s antics and ultimately decided to eat the loss and terminate the deal. That was just easier than trying to get the writer to actually care about their craft and try to write a decent song.
Minimum Delivery Release Commitment (“MDRC”)
The big difference between the Minimum Commitment and Minimum Delivery Release Commitment is that the “MDRC” also places a commercial sound recording release quota on the songwriter. This is in addition to the number of songs that must be written and delivered to the publisher.
The MDRC is much more understandable (and easier to comply with) if the songwriter is also a recording artist. Some MDRC’s may say something like a minimum of three 100% songs must be recorded and released by a major record company, or a mutually approved indie label. This version of the MDRC can be easier for a songwriter/artist, because they’re recording an album of their music.
Of course, if the songwriter is not their own “artist,” this is much more difficult to comply with. There’s no way to guarantee any of the songs they write under the deal will be recorded and released by a major/indie label. In fact, that obligation is truly on the publisher to work the songs in the marketplace so that this can be accomplished. Still, even the publisher can’t guarantee this.
The worst and most malicious MDRC I’ve ever seen actually required ALL of the songs to be recorded and released on a major label and licensed at the full stat rate of 9.1 cents. This terrible MDRC also required the writer’s co-writing percentage to be at least 1/3rd or the song wouldn’t count toward the quota of songs, but the less than 1/3rd song would remain the property of the publisher.
Sometimes you don’t know a good agreement, until you see a bad one.
Read the rest of the series here:
- Part I: Full-Service Publishing Agreements
- Part II: Sale of Compositions and Advances
- Part IV: Royalty Splits, Accounting, and Rights Reversal
Benom Plumb is an Assistant Professor of Music Industry Studies at the University of Colorado Denver. He is a veteran music industry professional with over 12 years of experience in music licensing and publishing, including VP of Licensing at Nashville publisher Bluewater Music. He is not an attorney. For more info about Benom, visit his website at www.professorplumbmusic.com.