Why would a contract say I owe royalties, If I purchased exclusive rights?

Question by a.rossnyc: Why would a contract say I owe royalties, If I purchased exclusive rights?
I purchased the exclusive rights to a song produced by someone I know. I was under the impression that buying exclusive rights guraunteed that I was the sole owner of the song now. I thought I owed no royalty to the producer off any profit that I make using the song. Now I’ve received the contract and it seems to contradict what I was informed of before I purchased the rights.

“The artist is entitled to create one master recording for profit or commericial broadcast using the exclusive track for distribution of unlimited copies. Commercial use includes, but is not limited to: sales to fans (i.e through an EP or LP), digital sales (iTunes, Rhapsody), disk jockeys, record reviewers, radio, artist and television stations and networks, motion picture companies, and music publishers.”

Then it goes on to say:

“In the event that a publishing agreement is executed using the exclusive track the artist agrees to grant the producer half share (50%) of all mechanical and performance royalties collected”

Like wtf? What if someone purchased the rights under this contract to a song and got a record deal because of that song they bought. The record label would never sell it because HALF of the royalties is ridiculous especially if the track sells millions.

I don’t like the terms of this contract because I was informed that I’d have sole ownership of the track (doesn’t even state this in the contract!) and owed absolutely NO ROYALTY to the producer.Ideas anyone? What should I do?
**I received the contract in the mail, I’m supposed to sign it and send a copy to the other party. The only thing is my money’s gone. VERY NAIIVE OF ME I KNOW. but still what would you at this point?**

Best answer:

Answer by George S
You purchased the right to a monopoly. That’s all. The contract only insures the artist cannot give his song to others for distribution. The artist still owns it. He is entitled to receive royalties.

I understand usually the artist gets 10%, or more as negotiated, and you get 10% period. The recording and distribution companies get the rest. Early Beatles stuff, and many other artist’s stuff, was ripped by people in your position. Don’t be a sleazoid like them.

You need to stop signing agreements you don’t understand. Never do that again. Take them to a lawyer before you sign. For a couple hundred bucks he will explain it to you.

Now don’t be a jerk-weed, egocentric turkey and screw up everything in a pissed-off temper tantrum. Take your 50%, or whatever you end with, and be happy. If you are on the ball as you seem this might be only the first in a series of business deals. As noted, make friends with an attorney, keep your temper under control and you should do well in business,

BE SMART. I’ve seen competent people blow their opportunities just for spiteful crap-head nonsense.

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