Songwriters: What Are Work-For-Hire Contracts? Pros + Cons
If you are a songwriter, at some point in your career, you will most likely come across something called a "Work-For-Hire" contract. In a more traditional singer/songwriter collaboration, a singer might approach a songwriter and make an offer such as this: "If you [the songwriter] write a song for me, then I will record it, and we will split the royalties and profit." If you are the sole songwriter in a traditional collaboration model such as this and register the song with BMI or ASCAP, you will receive 100% of the Writer's Share. If the song becomes licensed with television, film, video games, etc., you will receive 100% of the Writer's Share of royalties. If there are no publishers involved, you [as the sole songwriter], will also receive 100% of the Publisher's Share. If you choose to enter into a traditional Work-For-Hire agreement, however, you give up your entire portion of the Writer's Share [and the Publisher Share, if applicable]. It is essential to understand this before moving forward.
So what exactly is a Work-For-Hire Agreement? It is precisely what it sounds like it is - someone hires you to create a work [song] for them.
Let's utilize a scenario of a Visual Artist [like a painter] to illustrate this type of contract more directly:
Someone might approach a painter and pay them $300 to take their idea or concept and "bring it to life." Once the client pays the Painter, that piece of artwork belongs to the client.
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There are both Pros and Cons to this type of contract that one needs to consider.
Cons include:
You give up all future creative control over the song. Once you receive payment and give the song to the client, it is in their hands. Going back to the metaphor of a visual artist: imagine that you paint a masterpiece and give it over to the client after receiving payment. A month or two later, the client then decides to take some paint and add to the painting, change the original piece, etc. Future modification could happen with the song that you composed because it is now the property of the client. The client could choose to remove a bridge, add some lyrics, change the genre . . . that is all up to them.
The song that you write may never reach the public. It may never get recorded. Because the client owns the work, they may decide to "put it in a closet," so to speak, and never actually do anything with it.
*This may be the most crucial con that requires serious consideration: Once you enter into a Work-For-Hire Contract [as a songwriter], you lock yourself out of any future amounts of money that the song may make [this includes Radio Play, Licensing, Royalties, etc.]. If you get paid $300 to write a song, but the song ends up making thousands of dollars in Royalties, you will never see any of that money. $300 will be all that you ever receive for the work.
Pros include:
You know that you are going to get paid. If you are involved in a more standard collaboration with a singer whom you are writing for, you may never actually make any money. You may spend 15-20 hours writing a song and give it over to the singer, but find that the singer never actually does anything with it. They make not even make it to the studio! Even if the singer does record the song, you might only make a total of $15 on royalties [Spotify pays ~$0.0.00069 per stream]. Because the singer whom you were writing for does not have any money or time invested in the project upfront, there is nothing that will truly push them to make up for what you have personally invested. You may spend hours writing a song, but find that the singer never works to promote it.
You know exactly how much money you are going to make and when you are going to receive payment. Even if you were to make $500 in Royalties in a more traditional collaboration model, those Royalties are usually collected slowly and over a long period. With Work-For-Hire Contracts, however, you know exactly how much you are going to make and when you will receive payment. If you are a Professional Songwriter, this will assist you in daily budgeting.
You can still receive credit for writing the song. Even though you give up your portion of the Writer's Share royalties with a Work-For-Hire Agreement, you can add a piece into your contract that requires that you receive credit [in a credit line] whenever the song is shared. Ex: "Whenever this song is posted or shared in any format [CD's, vinyl, online, etc.], I shall receive a credit line below as such - Songwriter: Alisha Peru." You can even require that your website or email address be included, as well [ex - Songwriter: Alisha Peru (alishaperu.com)]. This credit line will drive more traffic and clientele back towards you.
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Tip #1: To avoid any confusion with possible future modifications that might be made to the song, include a line in your contract that states:
"If this song is altered or modified in any way, the credit line shall be as such:
Original Songwriter: [your name here]
Modified by: ___________”
This "modification credit line" helps protect your name as a songwriter, as you may not approve of the changes that could be made to the song. You might not want future modifications attributed to you.
Tip #2: When it comes to Work-For-Hire Contracts, always make sure that you receive payment before sending the song to the client. You do not want them to "take your work and run!" You can opt to require a 50% down payment [and the other 50% before delivering the final product]. These down payments help filter between singers who are serious about working with you and those who are just "shopping around." It also guarantees that you will not put work into the writing process without receiving any monetary compensation.
Tip #3: An Editable Work-For-Hire Template can be found here: https://alishaperu.com/product/560344
A Professionally Licensed Entertainment Attorney has reviewed the contract that this template is based upon. [Disclaimer: Alisha Peru [and the Attorney who reviewed the original contract that this template is based upon] is in no way liable for any legal issues, losses, or damages of any kind that may arise in conjunction with the use of this template.]
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There are many pros and cons to Work-For-Hire contracts. The usage of such an agreement type depends on your particular situation, the kind of relationship that you have with the singer whom you will be working with, how well-known an artist is within the industry, what an artist's royalty stream is like, etc. Weigh these carefully and, when in doubt, speak with an entertainment attorney or trusted music manager. Best of writing to you!
Alisha Peru
[Disclaimer: Alisha Peru, Live and Amplified, and all persons mentioned in this article, are in no way liable for any legal issues, losses, or damages of any kind that may arise in conjunction with an individual's work-for-hire contracts, music collaborations, etc.]