What is a Controlled Composition?

Music contract law is an essential aspect of the music industry, particularly when it comes to controlled composition and mechanical royalties.

Controlled composition clauses are included in music contracts to regulate the compensation of mechanical royalties for the songwriter or publisher.

Mechanical royalties are payments made to songwriters and publishers for the reproduction and distribution of their musical works. These royalties are paid by record labels and digital music platforms for each unit of music sold or streamed.

Controlled composition clauses limit the mechanical royalty rates paid to the songwriter or publisher for each song on a recorded album. The clause stipulates that the mechanical royalty rate for controlled compositions is reduced by a percentage of the statutory rate. The statutory rate is set by the Copyright Royalty Board and applies to all non-controlled compositions.

The percentage reduction can range from 25% to 75% of the statutory rate, depending on the terms of the contract. It can also limit the number of songs that you receive a mechanical royalty for being used.

Record labels want to reduce the number of songs that receive a mechanical royalty or reduce the percentage of the mechanical royalty because mechanical royalties are not subject to recoupment meaning that record labels have to pay these royalties before the advances have been recouped.

It’s important for songwriters and publishers to negotiate their mechanical royalty rates and controlled composition clauses when signing music contracts. Consulting with a lawyer experienced in music contract law can help ensure that songwriters and publishers receive fair compensation for their work.

In the competitive and complex music industry, it’s essential to understand the terms and conditions of music contracts to protect and maximize the value of one’s creative output.