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Tuesday, October 11, 2011

Making Your Own Music-Joint Ventures

Making Your Own Music-Joint Ventures

When making your own music, a joint venture is the same as a multi-artist or label deal except the production entity doesn't get a royalty. Instead, the production entity and the distribution record company are in effect "partners." This means they take all the income which comes in gross wholesale price of records and all licensing income and put into one big pot. Then they take all the expenses of operations out of the pot, and whatever is left over is split between the two entities. Historically, the split was 50/50, but over recent years this has become increasingly difficult to get. Record labels are shying away from joint ventures altogether, and when they do them, they're trying to pay less- %40 times lower. A true partnership or joint venture means one partner can commit to both of them to legal obligations. For example, if one partner signs a bank loan for $200,000, both partners can be sue if it isn't paid back. Neither you nor the record label wants this, so the agreements sometimes specifically state they aren't legally partnerships or joint ventures. Thus, the name :joint venture" is not technically correct. It just describes a multi-artist deal where the profits are shared as if a joint venture existed.

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