How do I compensate members of my band for contributing to my song?
March 22, 2011
Dear Music Lawyer,
Are you familiar with "arranger's royalties"? I am trying to determine what is owed to my band for helping arrange the songs. They didn't write any of the words or melodies, so it's not to be confused with a co-write. It's a sticky situation because I'm changing up the players in the band soon.
I don't typically see "arranger's royalties" for the situation you are describing where it sounds like you have brought completed words and melodies to your band (words + music being the essence of a song) and your band mates contributed additional instrumentation, harmonies, or rhythms. However, I've certainly encountered non-writer members in a band (i.e., those members who are not getting a writer's share of the song copyright) wanting compensation for their musical contributions.
Unfortunately, there's no standard compensation for these non-writers to my knowledge. That said, I've found that often non-writing band members feel compensated through being members of the band and participating in sales of CDs, merch, live shows, etc. Sometimes they may also be part of a band publishing company that participates only in the publisher's side of publishing royalties (as opposed to the writer's side of publishing royalties). If they are no longer in the band, then generally such compensation ends (depending on your intraband agreement) and you may find yourself faced with people who feel they have been ripped off. This is especially common if any of the songs that they added a riff to or performed on start making money (e.g., song gets licensed to a movie).
Since it sounds like you did not have an agreement in place with your band members and are contemplating compensating them in some manner, here are two options to consider:
1. Offer them a flat fee for their contributions in exchange for them signing a work for hire agreement clarifying that you own 100% of each song. This would mean no ongoing royalty obligation. Obviously, on a go forward basis, it would be good to negotiate this amount on the front end.
2. Offer them a percentage of future record sales/licensing on the songs they contributed to. Keep in mind that this ongoing royalty obligation is pretty rare in the indie world and would mean that you would have to structure a method of accounting. It may also give them the right to audit your "books and records."
You may also wish to consider proposing a hybrid arrangement with payment of a small fee now coupled with an agreement to pay them a "bonus" if your record sells X units or you get a song placement for X dollars.
I wish you luck navigating this tricky road.
Amy E. Mitchell