1. Why?
The primary purpose of any royalty examination is to determine that royalties are being calculated and paid per the original contract.
2. Why should I choose Music Audits?
Our expertise and personal service. Our team has years of experience in performing royalty compliance examinations on behalf of recording artists, producers and songwriters. We also have years of experience as music publishers which gives us a tremendous edge in researching and dealing with the accounting departments. Our team has an excellent relationship with every major label and publisher. We know who to talk to, where to look and how to get results.
Remember, in some cases, older income may be lost to you forever. The sooner you get your accounts in order – the greater your overall income will be.
3. How do we get started?
The first step in an examination is a preliminary study of the relevant contract(s), statements and other pertinent information so we may determine if an audit is warranted.
4. When should I perform a royalty examination?
Anytime after it is determined an artist has achieved a level of success that would make an examination economically viable. Some artists do this every two years for their own peace of mind. The sooner you start, the better!
5. What errors do we commonly find?
We follow up on the findings from the preliminary study and then go through a twenty point check list such as: incorrect royalty rates, under reported sales, excessive fees and foreign income to name just a few. We also review and substantiate any third party income that may be due. Even with all of technology available today, simple errors can substantially affect an artist’s royalty income. It can be as simple as a royalty rate is entered into a computer incorrectly or a recoupable expense has been charged in error. Some small errors could mean a lot to an artist and can easily go undetected. It is very important to track the money from every source and to be assured that it is being credited properly. There may be a number of clauses in your contract where the label may interpret them in a way that may differ from your interpretation. They will always interpret them in their favor. It may be that their systems can’t or don’t actually calculate royalties as per the wording in your contract. Now is the time to reach a resolution of these matters.
6. Will conducting a royalty examination affect my relationship with the label or publisher?
The answer is no. An audit is expected and in a way welcomed because crucial questions as to the accuracy in payment calculations will now be closed forever. Closure is a good thing for both the artist and label. Generally, any examination is likely to uncover some errors or erroneous contractional interpretations and when found it serves both and improves respect and relationships.
7. What types of royalty accounting errors do we commonly find?
8. What are the benefits?
Contracts governing royalty provisions can often be very complex. Unintentional mistakes are made that can result in substantial under payments. Unclear or misinterpretations of your contractional terms can mean lost income. Sometimes a contract does not specifically address the many new digital areas of distribution and a new clear interpretation music be made. It is not unusual that this new interpretation will favor the label or publisher. This is the ideal opportunity to set and correct these rates for the future as well.
9. Do royalty examinations generally result in litigation?
Rarely. Most royalty examinations are settled in an equitable manner without litigation.
We are not attorneys and cannot provide legal advise, but we can interpret the financial terms of your contract and advise you if we feel an examination is warranted. If necessary, after our inspection of the records we can identify the pertinent issues that need to be resolved with litigation, we will share our the findings with your attorney.
10. Do you have to personally get involved with the label?
No. We act as your representative with the label and we report directly to you as often as you like during the process.
