What are the recoupable front-end fees music creators receive from industry entities that enable them to focus on their work?
From Music Publishers
If a music creator partners with a publisher, they may be offered an advance against future earnings as part of the publishing agreement. This is an amount of money paid up front and/or in instalments to the creator that the music publisher will eventually gain back (or recoup) from the creator’s share of any revenue earned through the use of their musical works (i.e., royalties and sync fees).
In most cases, the purpose of an advance is to provide a music creator with enough financial security to allow them to focus their time on practising their craft instead of finding alternate ways to cover their day-to-day expenses.
It’s important for the music creator to be aware that, most often, they will not receive any back-end revenue until the advance is completely recouped by the publisher. For example, if a publisher pays a creator an advance of $25,000, and the creator’s share of all royalties generated by the use of their musical work amounts to $40,000, the publisher will recoup the $25,000 before the creator receives the remaining $15,000. However, if full recoupment becomes impossible for any reason, the creator does not have to personally repay the publisher. In other words, the money is non-refundable.
Publishers calculate advances based on various factors including the revenue-generating potential of the music creator and their works, how much of the copyright (if any) they’ll be assigned by the creator, and what percentage of the royalties they’ll receive.
If a music creator is also a performer, they may be offered an advance by a record label as part of a record deal. Like a publishing agreement, the advances in record deals are recoupable and non-refundable, but they differ in at least one significant way: a number of additional expenses on top of the advance (e.g., recording, marketing, touring, and overhead costs) often need to be fully recouped before the artist receives any additional revenue, if they ever do.
As a service to their writer members, some PROs—SOCAN among them—provide advances as well. The music creator’s eligibility and the amount of the advance they receive depend on their earning history and “the confirmation of any significant amount of money expected to be earned in the very near future.”
Additional Sources of Funding: Grants & Awards
In Canada, all levels of government—as well as numerous private foundations, trade associations, and other philanthropic organizations and individuals—show their support for Canadian arts and culture by regularly offering grants and financial awards to artists including music creators. While some of these funds are intended to be used by specific creators for specific purposes, some are simply intended to sustain artists in the regular course of their work, and there’s often more funding available to them than they realize.
Explore these additional sources of funding.