Royalties without a Hit??

Perhaps a misnomer, but the outcome is the same...musicians who record under the AFM Phonograph Record Label Agreement (AFM-PRLA), in addition to any money paid as a result of their having performed on the original session, will receive additional compensation as a result of record sales.  For the royalty artist, this is in addition to the royalties as provided for under the agreement with the record company.  This is true whether or not the recording that the musician performed on is a "hit," or even released. 

Too good to be true?  Not at all! Here's how it works:

Every six months all of the AFM signed record companies contribute (after certain specified allowances) a small portion of their profits into this special fund.  During the year, every time a musician records under the AFM-PRLA, the amount of earnings for that work is logged with the Fund.  At the end of the year, the contributions made by the record industry into the Fund are divided amongst all of the musicians who recorded that year.  The musicians' pro-rata share of that amount is determined by the amount of money that was earned for that year.  If the musicians never record again, they will continue to participate in that program for four more years.  The amount can be quite substantial and has ranged from three to five figures.  In 1997 over $12.4 million was distributed to eligible musicians.  Not bad for simply recording under the AFM system!

By the way, because recording industry contributions are calculated after generous allowances are figured in, while the musicians working for small record labels receive the same benefits, the record label's contributions are minuscule.

Theatrical & Television Motion Picture Special Payments Fund

Musicians performing recording and/or on-camera services in the production of music for theatrical motion pictures as well as television documentaries, sitcoms, episodic dramas, and non-dramatic series are entitled to receive additional special payments when the product is released into certain ancillary markets.

In the case of theatrical motion pictures, the release of the movie as a DVD or video cassette, or the exhibition on free or pay TV, generates additional compensation to musicians who performed the original services. These payments are based on a percentage of the producer's gross, and each musician who performed an original service shares in a special payment distribution based on a percentage of their original earnings.

Sound Recording Special Payments Fund

Under the provisions of the Sound Recording Labor Agreement (SRLA), formerly the PRLA, signatory employers are required to make contributions to this fund based on a percentage of the manufacturer's suggested retail price of the product sold in different formats, including records, CDs, and audio tapes.

In addition to their respective wage scale and fringe-benefit payments, musicians engaged by signatory employers under the SRLA receive additional payments spread out over a five-year period.

Unlike the Theatrical & Television Motion Picture Fund, where the musicians who work on a specific project share in monies directly related to a specific project, the musicians under this fund share in a distribution of the total payment collected by the fund. In order to qualify, a musician must have participated in at least one recording session, which has been properly filed with the AFM-EP Fund.