richardbirkin
commented
1 year ago Breaking all the above down into tasks, I think the first step would be to split the income by shares.
Requirements
Feature: Product Income Share Splits In order to see how much the artist has earned and how much the label has earned from a line of income As a label user I need to be able to save the label share percentage and other third party share percentages
Background
Record Deals
When a record label and artist work together, they will reach an agreement within the Record Deal.
One of the key parts of a Record Deal is the way that expenditure and revenue is handled. A Revenue Share will be established. e.g. 50/50 'after recoupment' - a 50% split of proceeds after any debt has been paid off.
Debt / Balance
Prior to the release of an Album, the Record Label may spend money on manufacturing, marketing, design. They may also pay the Artist an 'advance' or a fee to license the album from the Artist.
It is common for the Record Label to track the level of expenditure in the Artist Account. We'll refer to this as the Balance.
Prior to the release of an Album, the Balance will be in the red. e.g. -£5000
This debt must be recouped by the Record Label before a revenue share is given to the Artist.
To be clarified: If the record label earns £10 from an Album sale, they split it 50/50, taking £5 for the Record Label, and putting £5 into the Artist Balance. The Artist Balance is now -£4995 The Artist will not receive any revenue until the Artist Balance is in the black.
The Record Label then received a payment from the Digital Distributor of the Album for £10,000
The Record Label split this 50/50 and pocket £5000.
The Artist's £5000 share is applied to the Artist Balance. Previously -£4995. the balance is now £5. The Record Label can then pay the Artist that £5.
I have seen this as a method of accounting, although I can't say for certain if this is how all labels work. For example, when I release an Album by a friend, we split the profits 50/50 and all the revenue goes into the Artist Balance. In this example neither the Artist or Record Label earn anything until the Artist Balance is in the black.
Revenue Splits
How income is split between interested parties. e.g. Record Label + Artist.
There could be other interested parties. e.g. Record Label + Artist + Licensor
The important thing here is that the Record Label should be able to enter the Revenue Splits at Product (and eventually Tune) level.
What Value Are We Adding?
Labels are spending days per month working out all this. We can do it in a moment, saving the label an estimated one month per year.
Currently, we are looking at the income of a product. The next step is to apply a Revenue split to each product.
Then we'll add the ability to create Outgoings - manually to begin with. e.g. £1500 Cd manufacturing
Following some more label consultations, we should then create a relationship between the Incoming and Outgoing via Revenue Splits.
How are we doing it?
For each Artist, a Record Label should be able to see:
Summary (all earnings (reporting period -v- all-time, artist share, label share, total recoupable costs) Income (all income from digital, physical) Costs (all recoupable costs e.g. Facebook Ads) Meta data (all parties should always be able to see the meta data for a release (track by track and product level) as well as the artist/label share as per the Agreement between both parties)