How to Create Contracts

How to Create Contracts

Contracts are the hub of all royalty processes – they are used to store down contract terms, match the catalogue to, & track your artist’s balance. Please watch our introduction to Contracts in the video below. We provide notes and further reading further down this page.

CONTRACT SUMMARY

In the Contract you will specify which rate you will pay as a royalty to your artists. You will also specify how often you want to create a statement for this Contract, if there currently is an outstanding balance for the Contract, which Payee you want to account the royalties to, & if you want to create self-invoices on behalf of the artist. You can create Contracts either via the interface on Curve, or in bulk via the Contract template (or Publishing Contract template for publishers).

Add Contracts via the Interface

To get started, go to the Contracts directory and select the Contracts page. You can create a new Contract by selecting the +Create button on the top right of your screen. A Contract has many features to cover all possible contract scenarios, many of which are optional to use. First, we will go through all the steps one generally would go through when creating a Contract. Further down we’ll briefly discuss the available options you may wish to use.

Overview tab

1. Select the Payee – Specify in which portal you would like the statements of this Contract to be published.

2. Name your Contract – For your and your artist’s reference, pick a name that is clear and consistent.

3. Specify the Currency of this Contract – Do you wish to account to your artist in your Home Currency? Or perhaps you wish to account to them in a currency that suits your artist better? Additional currencies can be set up in your Settings.

4. Select the Accounting Period – How often do you wish to account to this artist? Your accounting period type options can be customised in your Settings.

5. Select the Contract type – Is this a Royalty or Profit Share deal? In a Royalty deal, a royalty percentage will be applied to each sale & cost on a line by line basis. In a Profit Share deal, Curve will take the sum of all sales & all costs, & when there is a profit, add a set percentage to your artist’s balance. When selecting a Profit Share deal, an additional Profit Share % field will appear where you can specify the share of the profit you wish to share with your artist.

6. Set the Opening Balance – Is there any ongoing business going on with this artist? Perhaps your artist is due an unpaid royalty, or there is a loss or advance still to be recouped? Your Opening Balance field allows you to set the starting point for your first royalty statement to build on. In a Royalty deal, the Opening Balance equals the artist share. In a Profit Share deal, a positive Opening Balance should equal the artist share, but a negative Opening Balance should equal the total loss of the project.

7. Set the Minimum Payout – Only balances that hit this minimum payment threshold will be paid to your artist. Generally implemented to avoid having to make payments that hold very little value.

8. Enable/Disable Auto-Payment – When enabled, & once the balance of the contract has reached the Minimum Payout, Curve will automatically notify you a payment is due to your artist and mark the balance as paid. When disabled, you will wait for your artists to personally invoice you their balance, & manually deduct payments made from your artist’s balance on Curve.

Terms tab

9. Set your Sales Terms – The royalty rates are set within the Terms tab, & here you have the ability to pinpoint specific terms for specific use cases.  The first line of a term can be read as an “if”.  The second line can be read as a “then”. ie If revenue matches the given criteria, then apply the given royalty rate.

In a Royalty type deal; here you specify the royalty share that should be shared with your artist. How many terms you need depends on the complexity of your artist deal. The simplest of all royalty deals will have just one general term and all sales will be applied the same royalty rate. In the example below, 50% of all revenue will be shared with your artist.

You may need to add more sales terms to your contract if you pay different royalty rates for different sales types. In the example below, 60% of all Digital revenue will be shared with the artist, all other revenue types will be shared at 50%. To any given sales line, the contract will always apply the Sales term that is most specific. The term that is deemed most specific is the term with a set condition highest up in the hierarchy. The hierarchy goes from left to right, so from Cat Type > Cat Group > Territory > Channel > Configuration > Price Category > Source.

In a Profit Share deal; your sales term represents which revenue should be included in your profit share pool. In a standard profit share deal, you will generally include 100% of all Net Receipts and set one general sales term as per below. But you have the ability to reduce or exclude certain sale types from your profit share by adding an additional term.

10. Set your Cost terms – As per your Sales Terms; in a Royalty contract, here you specify which share of the costs is to be recouped from your artists. In a Profit Share contract, here you specify which costs are to be included in your profit share pool.

For more information on how to set your sales & cost terms, please visit our Terms in a Master Deal or Terms in a Publishing Deal chapter in our documentation.

Additional features

Additionally, there are a bunch of Contract features that may be helpful but are optional to use. We briefly break them down below. For more information on these features, please visit the Contracts chapter in our documentation.

Apply a custom Statement Design – As a default, your Contract will use the statement design as specified in your Settings. But you can further customise the statement design of this contract or a group of contracts using Companies.
Store the original Contract file
– Attach a pdf version of your artist deal to the Contract for your own reference.
Set a Start & End Date – Specify for your own reference the start & expiration date of your Contract. This is just for your own reference & will not affect your royalty accounting process, even when the expiration date has passed.
Categorise your Contracts – You can categorise your Contracts for your own reference. This does not impact your royalty accounting process.
Generate Self-Bill Invoice – Automatically creates an invoice on behalf of your artist when the Minimum Payout is met.
Generate Fees Invoice – You will automatically create an invoice that specifies your distribution fee or commission.
Deduct Withholding Tax – Deduct tax from the artist royalties.
Transfer or deduct royalties from one Contract to another using Cross-Contracts – If you wish to deduct one artist’s royalties from another, or wish to summarise multiple contract balances onto one summary contract, you can use Cross-Contracts.
Automatically attach the Contract to a label’s catalogue – For distributors only, all Tracks/Releases from a specific Label can automatically be funnelled to that label’s Contract. More on this in our next step, creating Catalogue.
Group your Term conditions – Simplify your Terms by using Contract Term Groups. This allows you to condition a group of Territories, Channels, Configurations, Sources and Price Categories within the same term.
Catalogue specific royalty rates using Catalogue Groups – This allows you to differentiate the royalty rate from one Track/Release/Work to another, all within the same Contract. More info
Delay royalties using Reserves – Reserves are a temporary deduction of artist royalties, again to be released in an upcoming statement. Most commonly used with physical sales to protect the label from unsold copies being returned by the record stores. More info
Escalations – Enables you to pay an increased royalty rate to your artist once a certain number of units or revenue has been met, or once a date has been passed. More info

Add Contracts via the Excel template

Record labels & distributors can import Contracts using the Contract Excel template. Publishers can import Contracts using the Publisher Contract template. You can add the same metadata as you would via the interface. Once your Contract template is complete, you can import your contracts via the Import button on the Contracts page.
To follow along with our demo, import the 2. Curve Demo Contracts.xlsx file using the Import button on the top right of your screen. Once you receive a notification confirming the Contract import is complete, refresh your page and the Contracts will appear. You may also want to use this file as a reference to build your own Contract metadata.

Your next step will be to add catalogue to your Curve client. Please visit the Catalogue for labels & distributors or Catalogue for publishers chapter next.