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A photographer recently asked me to help with pricing & negotiating a contract governing the license of his stock photographs to a record company. The record label (one of the largest in the country) was initially interested in using four of the photographer’s images. These included a musician performing live for the cover and interior of a vinyl record edition of the musician’s upcoming album. We were told that they planned to press and release 25,000 copies of the vinyl record. They also said they had a firm budget of $2000.00. The fee didn’t seem to quite match the value of the images, but we asked if they could send over a contract to take a look at. That’s when things got interesting.
Not surprisingly, the contract stated that the photographer would grant the copyright of his images to the record label. We quickly responded and pointed out that the contract didn’t match their requested use of the images. They then sent back another version of the contract removing the line about the copyright while retaining the language about granting them “all rights.” It was clear that we weren’t on the same page. So it was time to bust out my red digital pen and make some changes.
I rewrote the entire first paragraph for several reasons. First, I didn’t like their language stating that the contract would “confirm” that they “purchased the rights” to the images. It was more appropriate to state that a specific license would be conveyed to them for a specific fee and that was all dependent upon payment of that fee to the photographer in full.
Second, none of the language regarding the “rights” to the images was accurate. So I drafted a new paragraph. In it we summarized the fee and licensing that we had discussed up until that point. Specifically, $2,000 for four images on the cover and inside the vinyl record with a print run of up to 25,000 copies. I also stated that a credit in the name of the photographer would be required. This made the photographer more comfortable in justifying the less-than-favorable fee since he would be able to get some nice publicity out of the deal.
In addition to revising the first paragraph, I wanted to make it very clear that the record label would need to pay for any usage above and beyond what was described. So I clarified their language at the end of the second paragraph. Additionally, the label included an indemnification clause protecting them against any breach of the agreement by the photographer. To this, I added language stating that the label would similarly indemnify the photographer if they used the images in any way that got them into any legal trouble not at the fault of the photographer. Lastly, I struck out a portion of the third paragraph. It included amendments to the agreement that I felt were a bit too vague. I wanted to make it clear that this document, once signed by both parties, would be the only document that solidified the agreement between both parties.
We sent the revised contract back and waited for a response. I should note that at this point we were receiving pressure from the art administrator that we were working with as well as numerous other staff members at the record label. They stated that we would need to sign the contract “by the end of the day” and that this negotiation was going to delay the release of the album. They also mentioned canceling the deal if we weren’t willing to sign the original contract.
The next day they came back with some new information and wanted to negotiate a new price. I learned that they couldn’t limit the print run of the vinyl record to 25,000 copies. However, they were willing to pay more to lift any limitations on the quantity. They also insisted on using the images to promote the album in various ways. But they didn’t want to define such use as advertising or collateral.
We countered with $4,000 for the use of the images for the first edition of the vinyl record (regardless of the number of records produced). This was double their original budget. However, we also granted them the right to promote the record by using the images in their original context for the album. I didn’t feel that this fee was enough to include the rights to use the images on merchandise such as t-shirts and posters. So we specifically excluded that from the contract. The record label verbally agreed to this on the phone and then sent over a revised contract. Unfortunately (and again, not surprisingly) they failed to include many of the points we discussed in the new contract. Here is a revised version of what they sent us, which I returned to them:
Again, we received more disgruntled feedback from the record label. They once again threatened to pull the deal off the table if we wouldn’t sign their contract by end-of-day. Standing firm on our revisions, we let them sleep on it.
We heard back from the label the next morning. This time they said that they weren’t willing to limit the use of the images to just the vinyl record. They reasoned that they planned to release the album with the photographer’s images in CD and digital format as well.
Additionally, they were concerned with our language regarding merchandising rights. As a negotiation point, the label asked us to state that if their licensing was to exclude merchandising rights, then they also wanted to limit the photographer from using the images on merchandising in perpetuity. While the photographer had no plan to create merchandise independently, we didn’t feel it was fair to limit the photographer’s ability to license his images for merchandising in the future, perhaps to another record label if the musician happened to jump ship. We decided to include language that limited the merchandising “embargo”. Specifically, it limited it to the length of the contractual relationship between the musician and the record label.
We also took these changes as another opportunity to renegotiate the fee. At this point, we had gone from $2,000 for the use of the images on a limited number of vinyl albums to $4,000 for the use of the images on an unlimited number of vinyl record albums within the first edition plus promotional rights. Now we were jumping up to the use of the images on all vinyl, CD, and digital editions of the album plus promotional rights with the merchandising caveat mentioned previously. Based on a few previous projects I’ve worked on, I knew the threshold for unlimited use for an album cover. In many cases, it sits around $6-10k plus expenses for a commissioned shoot, regardless of the number of images. Also, those projects are frequently presented as a “take it or leave it” work made for hire.
We decided to revise their contract once again with a fee of $6,000 (triple their original budget). Here is that version of the contract:
By now, I was working directly with the Senior Vice President for Business and Legal Affairs at the record label. We had a very nice conversation (as opposed to the demanding correspondence from the other employees of the record label). I think this was because at this point I was talking to the person governing the creation of the contract and development of the language included. Previously, I didn’t think our counterparts at the record label were doing a good job communicating the revisions we were requesting down the line. This is likely why they kept coming back to us with new contracts that didn’t correspond to our negotiations. Fortunately, after our conversation, he provided a new, clean version integrating the changes. This was ultimately the final version signed by both parties, which you can see below:
During the pricing & negotiating process, it’s ok to push back, as long as you do it professionally and cordially. Many times projects are presented to photographers as works made for hire or with a “take it or leave it” mentality (which isn’t necessarily a bad thing if the rate is appropriate). While the clients are often firm, there should always be room for a conversation to negotiate better rates or terms. Record labels are perhaps the most notorious clients for less-than-favorable rates and contractual terms. However, I’ve successfully amended and negotiated multiple contracts to make them more favorable to the photographer.
A few months later, I saw one of the images stuck on a wall near Times Square. The image was used in its original context on the cover of the album as agreed to in the contract. While it’s hard to say whether these postings are advertising in their true meaning or not (paid placement), it made me wish the record label paid even more for the licensing given the exposure.
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