Negotiating Creative Contracts

The music industry is in an ongoing debate to determine the best way to payout streaming revenue to the music rights holders. The argument has several layers to it. Let’s break them down: 1. How should each user’s revenue be distributed? Currently, Spotify, Apple Music and Amazon pool their respective revenues into one big pot, then split it with all rights holders based on how many streams each song they own gets. This is called the ‘pro rata’ model. It’s easy, predictable, and often benefits superstar artists. But the user-centric model, used by SoundCloud, Tidal, Deezer, and others, distributes revenue on a per-user basis. So if you pay $10 / mo and only listen to Mariah Carey, then Mariah (and her various rights holders) get the full distribution of your payment net fees. The user-centric model is more volatile (e.g. what happens if you don’t listen to any artists for a month?), and may cost more to maintain but studies say it boosts revenue for middle-class artists who have smaller but passionate fanbases. 2. Should longer songs get more revenue than shorter songs? The current payout models count 1 full stream once a song has been played for a minimum of 30 seconds. This is quick and efficient, but too democratized for some critics. It means a 31-second meditation track can generate the same amount of money as hip-hop’s first big single, the 14-minute medley, “Rapper’s Delight.” A solution could be what Will Page proposed on our podcast episode: a multiplier. For each additional minute of a song listened to over 4 or 5 minutes, the song would receive a ~1.2x boost in streaming revenue. 3. Should the artist you start a listening session with be rewarded more? If you start your Apple Music session by searching a Justin Bieber song, then the algorithm plays a Selena Gomez song, should Bieber be paid more than Selena? Today that’s not the case, but people are pushing for this. Think about a supermarket. The grocery store stocks shelves and negotiates with suppliers based on their brands’ influence on consumers. If a particular brand is more likely to lure customers in, then those brands want to be compensated more for that. Music streaming is the digital version of that. These are three of several debates on streaming. Others including price raises, advances, and revenue splits between labels, publishers, and streaming services. But the underlying tension stems from music streaming growth slowdown, which puts more pressure on the competing incentives between streaming services and rightsholders. If the industry can find ways to grow the overall pie, then everyone’s happy. But it’s easier said than done. If you enjoyed this breakdown, we did a whole episode on Trapital about this topic with Bloomberg’s Lucas Shaw, check it out here: https://lnkd.in/gckpbiBd What do you think is the best payout model for streaming?

𝐃𝐨 𝐲𝐨𝐮 𝐤𝐧𝐨𝐰 𝐰𝐡𝐚𝐭’𝐬 𝐢𝐧 𝐲𝐨𝐮𝐫 𝐜𝐨𝐧𝐭𝐫𝐚𝐜𝐭? 𝐋𝐞𝐭’𝐬 𝐭𝐚𝐥𝐤 𝐚𝐛𝐨𝐮𝐭 𝐦𝐨𝐫𝐚𝐥𝐢𝐭𝐲 𝐜𝐥𝐚𝐮𝐬𝐞𝐬. These provisions allow contracts to be terminated if a party engages in conduct deemed unethical or harmful to reputations. Common in media, entertainment, and influencer contracts, morality clauses can include terms for behaviors like criminal activity, harassment, or even public statements that conflict with a company's values. While they aim to protect reputations, morality clauses can raise concerns about fairness and personal autonomy. Negotiating these clauses thoughtfully—defining specific behaviors and ensuring a right to challenge disputes—is critical for fairness and clarity. In my latest article, I discuss: • How morality clauses are shaping modern media contracts • Why it’s essential to review these terms with a legal expert • Tips for navigating these controversial provisions Understanding your contract is key to protecting your career and reputation. What’s your take on morality clauses? Let’s discuss in the comments.👇 Click the link below to learn more: https://lnkd.in/grbgcNYv #MediaLaw #EntertainmentContracts #MoralityClause #LegalInsights #BigSpeak Kwame Christian, Esq., M.A. April Rinne Ian Smith

Let’s bust some myths about contracts in the creator economy. Spoiler: It’s not just about getting paid—it’s about protecting your future. In the fast lane of the creator economy, contracts can seem like just another obstacle before the paycheck. But here’s the truth: a solid contract is your secret weapon. It guards your creative rights, sets the tone with brands, and lays the foundation for long-term success. Here are five things creators often overlook: (1) IP Ownership: Who owns your content after it’s created? If you’re not careful, you might give away your IP—and with it, control over your brand. Always ensure you retain ownership or, at the very least, have a say in its future use. (2) Exclusivity Clauses: Are you tied down to one brand? Exclusivity can limit your chances to work with others. Know the duration and scope (e.g., promoting one lipstick shouldn’t block you from promoting ALL other makeup and skincare) to avoid stunting your growth. (3) Moral Clauses: If your deal has a morals clause, the brand can cut ties if they think you could damage their image. But what about your image? Negotiate mutual moral clauses so you can walk away if the brand’s actions threaten your reputation too. (4) Payment Terms: It’s not just about the amount—it’s about when and how you get paid. Clear terms keep your cash flow steady and save you from chasing unpaid invoices. (5) Term and Termination: How long is the contract, and when/how can it be terminated? Understanding this gives you the flexibility to move on when the time is right—no surprises. Contracts aren’t just about the present; they’re about securing your future. Before you sign, make sure you understand every clause, and don’t hesitate to get expert advice (entertainment lawyers like me can help you with this!). Your future self will thank you.

50-point checklist for drafting an error-free contract [This list is non-exhaustive] 1. Understand the Client's Commercial Objectives, not just legal ones. 2. Identify All Parties with their correct legal entity type (LLP, Pvt Ltd, Individual, etc.). 3. Determine Governing Law & Jurisdiction 4. Define Scope of Work/Services/Obligations 5. Discuss Worst-Case Scenarios upfront before drafting the contract. 6. Use Consistent Defined Terms [Add a proper definitions clause] 7. Avoid Ambiguous Language 8. Follow Standard Clause Sequencing [Use MS Word efficiently here to save time] 9. Use Active Voice Instead of Passive 10. Keep Sentences Short & Simple 11. Payment Terms with Clear Due Dates 12. Confidentiality Clause should have Survival Period post-termination. 13. Intellectual Property Clause must distinguish between Pre-Existing IP and Newly Created IP. 14. Limitation of Liability should always be capped to the contract value or fees paid. 15. Indemnity Clause should cover Third-Party Claims and not just direct losses. 16. Time is of the Essence Clause (if applicable) 17. Milestones with Deadlines 18. Force Majeure Clause 19. Verify Use of Capitalization for defined terms throughout the document. 20. Perform a Reverse Reading (from end to start) to catch overlooked errors. 21. Dispute Resolution Mechanism 22. Termination Clause must specify Consequences of Termination like pending payments and handover of materials. 23. Penalty for Breach 24. Insurance Requirements 25. Include a Liquidated Damages clause with clear calculation methodology. 26. Proper Numbering of Clauses 27. Consistent Font Style & Size 28. Page Numbering 29. Use Bullet Points for Long Obligations rather than one big paragraph. 30. Schedule/Annexure Numbering 31. Grammar & Spelling Check 32. Cross-Reference All Definitions 33. Check Consistency of Dates 34. Remove Repetitive Terms 35. Verify Use of 'Shall', 'May', 'Will' 36. Check Stamp Duty Requirements 37. Check Consistency of Notice Periods across different clauses. 38. Foreign Exchange Rules (if cross-border) 39. Include an Acceptance Testing Process with Deemed Acceptance timelines. (If Applicable) 40. Data Protection Obligations 41. Signatory Details (Name, Title, Date) 42. Witness Details and Signature (if needed) 43. Number of Copies to be Executed 44. Check for Blank Spaces 45. Review Contract Length as per your client's requirements 46. Add Table of Contents for Long Contracts [Very helpful in navigation] 47. Number Definitions Alphabetically for better readability. 48. Use Grammarly or AI tools for initial proofreading. 49. Review Defined Terms separately to check for unused or inconsistent terms. 50. Create a separate Obligation Matrix to clarify what each party is supposed to do. What would you add to the list? Mention in the comments. #contractdrafting #agreement #contract #checklistfordrafting

Rethinking Fairness in the Art Market The art world, like any ecosystem, relies on balance. Yet for decades, we have witnessed a quiet but relentless erosion of that balance, as small and mid-sized galleries—the lifeblood of discovery and risk-taking—see their greatest investments walk out the door, lured by promises of global fame and larger checks from the mega-galleries. The story is old: a dealer spots a young talent, supports them through years of uncertainty, only to be left behind when success finally blooms. What Wendi Norris proposes—a contractual framework inspired by professional sports and venture capital—is not just clever; it is an act of courage that invites us to confront the ethical vacuum at the heart of our system. Let us not be naive: artists, like athletes, evolve, and their aspirations shift. Growth often requires new stages, wider audiences, and fresh dialogues. No one should begrudge an artist’s ambition or their right to choose. But must this natural progression come at the expense of the very galleries that made that growth possible? The poaching of artists without consideration for the ecosystem that nurtured them is not a marker of dynamism; it is a sign of short-term thinking that risks hollowing out the future of contemporary art. Has Wendi Norris Found a Fix? What Norris’s approach offers is a reimagining of the relationship between galleries and artists, one rooted not in sentimentality, but in fairness. By proposing buyout clauses or co-representation agreements that acknowledge the investments small galleries make—financial, intellectual, and emotional—she lays the groundwork for a more sustainable, respectful market. The analogy with early-stage venture capital is telling: in most industries, early backers share in the upside when success arrives. Why should art be different? Critics argue that contracts could chill the intimacy and trust on which gallery-artist relationships thrive. Others worry that legal frameworks cannot capture the subtleties of creative partnership. These concerns are valid, but they should not be used as pretexts for inertia. We can no longer afford a handshake economy where only the biggest players win. The art world prides itself on being a space of innovation—let us prove it in how we structure our collaborations. Co-representation models, like those increasingly seen between large and small galleries, point the way forward. But to be meaningful, they must go beyond optics. They must enshrine genuine shared stewardship of an artist’s journey. It is time for collectors, institutions, and artists themselves to demand these new norms—not out of obligation, but out of a commitment to an art ecosystem where diversity of scale, vision, and voice can endure. https://lnkd.in/ebTeMKTi

If you're a regular viewer of Shark Tank India, you might have noticed that the sharks primarily offer three types of deals... Equity, Equity + Debt, and Equity + Royalty. But what should startup founders consider taking? Well, there are various factors to consider before making a decision. 👉 Equity Deals: If you're seeking more than just money – guidance, connections, and mentorship – then offering equity could be your golden ticket. It's like having a partner who's invested not just financially but emotionally too. Plus, having a well-connected investor on board can open doors you never knew existed. 👉 Equity + Debt Deals: Now, this one's for the brave souls who believe in their vision so much they're willing to take on a bit of risk. Sure, you're giving up a piece of the pie, but pairing equity with debt means you're getting a financial boost upfront while still holding onto hope for the future. 👉 Equity Plus Royalty Deals: If you're a startup wizard who's confident your product is going to be the next big thing, but you're not quite ready to share ownership just yet, then equity plus royalty might be your magic spell. It's like saying, "I have faith in my product to share profits with you once we achieve significant success." For example, a Shark may offer Rs 1 crore for 1% equity plus 1% royalty until Rs 1 crore is recouped. This means that the Shark will get 1% of the company's shares and also 1% of the sales or profit until the initial investment is recovered. Royalty agreements can be beneficial for both parties in certain situations. For investors, royalties can provide a steady and recurring income stream from the business, regardless of its valuation or growth. Royalties can also help investors mitigate the risk of losing their money if the business fails or does not perform well. For entrepreneurs, royalties can help them raise capital without giving up too much equity or control of their business. However, royalties can also reduce their cash flow and profitability, as they have to pay a portion of their revenue or profit to investors on a regular basis. Royalties can also hamper their growth and innovation, as they may have to focus more on generating sales or profit rather than investing in research and development or expanding their market. Therefore, one should not rush before raising funds and should consider key parameters such as: 👉 Stage of Business 👉 Financial Needs 👉 Long-Term Vision 👉 Market Potential 👉 Impact on Ownership and Control 👉 Current Cash Flow and Profitability So, before finalizing any funding option, don't rush and carefully evaluate your business's specific needs, goals, and growth potential. Trust the process-don't rush it!! #investing #startups #growth #finance #india

FY24 has been a blissful year. However, it is important to reflect on the financial/business mistakes. Sharing here so you don't make them👇 1️⃣ Focus on the Long-term When your bank balance allows you to be patient, embrace it. Avoid engaging in activities without terminal value. Do not over-investing your time in activities with a short shelf-life. Take being an influencer, for example. India has over 8 Cr creators, yet I recall only 10-20 individuals who've stayed relevant for more than 5 years. I abandoned brand deals (which earned me up to 2-2.5 L/month) for two reasons: (a) It demands excessive social media time investment to maintain engagement and increase rates, without guaranteed income after 5 years. (b) Being an influencer might require dishonest product endorsements, which goes against my principles. Opinions may vary, but I personally am not comfortable with this approach. 2️⃣ Don't Rely on Word; Document Everything I've had business partners who manipulated me to over-invest and abandon other income streams, only to withhold my capital when things turned sour. Documentation could have prevented this. Regardless of the deal's size, ensure everything is documented. 3️⃣ Avoid Signing Exclusivity Agreements Without Long-term Visibility A client engaged me for research and content but prohibited work for their competitors. The pay was substantial, and the brand was great, so I agreed. However, just three months in, they reduced the workload. By the tenth month, it ceased. At the end, my earnings from this client were barely 40% of the initial commitment. Exclusivity is acceptable, provided there's a guaranteed revenue stream unaffected by the client's business plan shifts. Otherwise, your career is at risk. I have another client who requested limited exclusivity, a collaboration I enjoy because they've assured revenue visibility contractually. 4️⃣ Multiplying Monthly Income by 12 to Estimate Annual Earnings Initially, my brand deals on LinkedIn and X generated ~2-2.5 lakhs monthly (from April to July '23). I wrongly assumed this income would remain stable throughout the year, leading to misguided investments in this business. Recognizing the unsustainability, I ceased these activities, focusing on what holds terminal value—something the world will still pay for in a decade. Despite these hurdles, it was an exceptional year. Embrace risks, embrace failure, but never stop learning! All setbacks are worthwhile, provided you avoid insolvency. =============== Follow me (Kanan Bahl) for more insights on Personal Finance & Investing. To never miss an update, hit the bell icon on my profile.

📝 𝟯 𝗧𝗶𝗽𝘀 𝗼𝗻 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁𝘀: 1️⃣Limitation of Liability 2️⃣Termination 3️⃣ Intellectual Property *** 𝟭. 𝗟𝗢𝗟 🔹Not Laugh Out Loud 😂 but 𝗟𝗶𝗺𝗶𝘁𝗮𝘁𝗶𝗼𝗻 𝗼𝗳 𝗟𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝘆 🔹Sets the boundaries for financial risk in a contract. 🔹 A usual cap is 1x TCV or Total Contract Value.  🚩Never agree to unlimited liability. There is a correlation between liability and probability: 𝘏𝘰𝘸 𝘱𝘳𝘰𝘣𝘢𝘣𝘭𝘦 𝘪𝘴 𝘪𝘵 𝘵𝘩𝘢𝘵 𝘵𝘩𝘦𝘳𝘦 𝘸𝘪𝘭𝘭 𝘣𝘦 𝘢 𝘣𝘳𝘦𝘢𝘤𝘩 𝘰𝘧 𝘵𝘩𝘦 𝘤𝘰𝘯𝘵𝘳𝘢𝘤𝘵, 𝘤𝘰𝘯𝘴𝘪𝘥𝘦𝘳𝘪𝘯𝘨 𝘵𝘩𝘦 𝘱𝘳𝘰𝘫𝘦𝘤𝘵, 𝘵𝘩𝘦 𝘱𝘢𝘳𝘵𝘪𝘦𝘴, 𝘥𝘦𝘱𝘦𝘯𝘥𝘦𝘯𝘤𝘪𝘦𝘴 𝘦𝘵𝘤?  ✅ If the probability is low, or you’re a hungry start up, you can probably take a higher limit.  ❎ If the probability is high, you might want to go for a lower limit or negotiate for a shorter term. 𝟮. 𝗧𝗲𝗿𝗺 𝗮𝗻𝗱 𝗧𝗲𝗿𝗺𝗶𝗻𝗮𝘁𝗶𝗼𝗻 🔹 Contracts shouldn’t last forever. Put in a fixed term so that you have the opportunity to reassess periodically.  🔹 Startups need flexibility to pivot, adjust pricing, or update products after a year. Larger companies may prefer to retender contracts for better cost efficiency. ✅ Having a fixed term with the option to extend allows you to exit a contract gracefully if things don’t work out, while retaining the flexibility to continue on better terms. ✅ Clear conditions on termination is also crucial. If there is an unremedied material breach, then you should have the right to terminate with penalties paid. A termination for convenience clause, will also allow flexibility when circumstances change. 𝟯. 𝗜𝗻𝘁𝗲𝗹𝗹𝗲𝗰𝘁𝘂𝗮𝗹 𝗣𝗿𝗼𝗽𝗲𝗿𝘁𝘆 (𝗜𝗣): 🔹 Who owns what? That’s the crux of IP clauses.  🔹 Protecting your IP ensures your business’s creativity and innovation are safeguarded: ✅ If you’re creating something, ensure you retain ownership of it.   ✅ If you’re using someone else’s IP, confirm you have the necessary licenses. 🤔If you’re developing a new product jointly with the customer or partner, think about who owns the newly developed IP? *** 📌 Remember: 📝 Contracts are more than just paperwork - they’re the foundation of your business relationships. 📝 By focusing on Limitation of Liability, Termination, and IP clauses, you can minimize risk and maximize clarity.  *** ✅ If you’re a #startup, pay close attention to these clauses—they can make or break your growth. ✅ If you’re a #board director, ask your management and lawyers the right questions to ensure that your company’s rights are well protected. ❓ 𝘞𝘩𝘢𝘵 𝘰𝘵𝘩𝘦𝘳 𝘣𝘰𝘢𝘳𝘥𝘳𝘰𝘰𝘮 𝘰𝘳 𝘤𝘰𝘶𝘳𝘵𝘳𝘰𝘰𝘮 𝘲𝘶𝘦𝘴𝘵𝘪𝘰𝘯𝘴 𝘸𝘰𝘶𝘭𝘥 𝘺𝘰𝘶 𝘩𝘢𝘷𝘦? #legal #contract #corporategovernance

As of February 2020, I had probably spent a grand total of 30 seconds thinking about force majeure clauses. I thought It was never worth the effort when there were so many "more important" clauses to worry about. You can probably all guess how much I came to regret that thinking in March 2020. So now I know to read them. But what do I do after that?! There are two parts to every force majeure clause. And each one has a #ContractTrap: 1 / A trigger (what constitutes a force majeure event), and 2 / A consequence (what happens when there is a force majeure event). The most common trap I see with the first is an overly broad trigger. A trigger should be broad enough to capture significant events that make it commercially unfeasible to for similarly situated parties to continue performance of throughout the applicable industry/geography. But it must be narrow enough not to protect a party for poor planning. Think about catastrophic damage to critical facilities due to a once in a century flood that causes damage throughout the area vs. a rainstorm that destroys just the party's facility because of improper maintenance. The most common trap I see with the consequence is non-parallel treatment of payment and performance obligations. Make sure that if service is excused, then so are payments - and vice versa. Seems obvious, but I often see clauses that suggest monthly payments must continue even if the vendor isn't providing services. Or that services must continue even if the client isn't paying. Any others that you would add? #forcemajeure #contracts #inhousecounsel

Nothing hurts Procurement more than spiralling costs. This document shows the surging cost of software in 2025. Here's some red flags when it comes to Software as a service (Saas) contracts and what to do about it: ➡️ Auto-renewals. Negotiate for... ↳ A minimum 60-90 day written renewal notice ↳ The right to opt out or renegotiate at renewal ↳ Removal of the clause outright ☝ Prevents lock-in at inflated rates & gives you leverage at renewal ➡️ Unclear data ownership. Ensure... ↳ Explicit statement my organisation owns its data ↳ The right to export data any time, in a usable format ↳ Data destruction & sanitisation confirmation post termination ☝ Protects your IP & ensures business continuity in vendor exits. It's your data, you SHOULD own it. ➡️ True up & true down restrictions. Enable... ↳ Flexible licence adjustments without penalties ↳ No minimum user thresholds or excessive step-ups ↳ Prorated pricing for partial terms & usage ☝ Keeps your Saas aligned with actual business needs, vital in today's volatile environment. ➡️ Unreasonable yearly increases. Negotiate... ↳ Fixed pricing over the contract term ↳ A cap on any annual uplifts (pegged to CPI to keep it fair) ↳ Discounts for multi-year commitments or upfront payments ☝ Keeps your long-term costs predictable and avoids budget surprises ➡️ Uncompetitive pricing. Ensure... ↳ The right to benchmark pricing against market standards annually ↳ Most Favoured Nation (MFN) clauses, ensuring you get terms no less favourable than any comparable client ☝️Keeps your rates favourable and competitive over time ➡️ Misaligned costs versus actual use. Insist on... ↳ Clear, unambiguous definitions of billable units ↳ Grace thresholds or tolerance limits before additional fees kick in ↳ Favourable true-up terms (e.g. annual reconciliation vs monthly) ☝ Stops vendors penalising you unfairly for growth. ➡️ Unclear exit & transition clauses Build in... ↳ Vendor obligation to assist in data migration (at reasonable rates) ↳ Continued access to data for a set period post-termination (e.g. 90 days) ↳ Clear documentation detailing handover obligations ☝ Ensures a clean, controlled exit & mitigates vendor lock-in ➡️ Permanent tie in Request... ↳ A termination for convenience clause with a 30-90 day notice ↳ Pro-rata refunds for prepaid but unused services ☝ Gives you agility to pivot if business priorities change. Why should Saas treated any differently to anything else you buy? Any others to add? _______ P.S. want to know the true cost of Saas inflation to your business in 2025? Need something to convince your IT stakeholders? I've got a must read FREE 🎁 to download Saas inflation report here 👇 https://lnkd.in/eiJh_zQm Saas vendors will hate me for sharing this. Repost if you found this helpful ♻️