What Is Licensing To Japan?

IF (!) we like your music allot and think the kids here in Japan will too and we would be honored to release your music in Japan this is how we usually go about it , we LICENSE.

Typically a licensed Japan release is :-

l       Manufactured in Japan

l       Marketed and Promoted in magazines, store displays, by flyers etc in Japan ( see our Promo Plan)

l       Sold directly to stores and music outlets in Japan only, never outside the territory of Japan.

As far as the actual process goes, basically we are renting your music for the territory of Japan. Under a contractual Agreement we are "renting" your songs for release on a CD or LP Vinyl for release in Japan. We are "renting" the songs via a Master Disc (containing the songs) you supply and we use the Master Disc to press CDs/LPs from for sales and distribution limited to the territory of Japan.

We do not want nor do we get any ownership of the songs, they remain 100% yours.

Each time we sell a CD/LP we owe you a Royalty, a set, agreed amount of money per each CD sold. We calculate how many CDs/LPs we have shipped from our warehouse for each three month period (ending March, June, September and December) and that's what we pay you for.

So I/we Have To Wait Six Months or Whatever After The release to Get Some Money?

Nope. Under the terms of the Agreement and usually upon receipt of the Master Disc, release Artwork, Photos, updated BIO and some other bits and pieces from you we pay you an Advance, an amount of Royalties in Advance. The Advance is later offset against actual sales of the release. The Advance once paid to you is totally non-refundable, you keep it no matter what. The amount of the Advance is set by negotiation and agreed to via the Agreement form that we both sign. It is paid into your designated bank account upon fulfillment of terms and conditions described in the Agreement and of course signature of the Agreement by both sides. 

Is Any Tax or Anything Deducted From the Royalties and Advance?

If you fill in the Income Tax Convention Forms we send you and get a Proof of US Residency Certificate and if you are a USA citizen, then we don't have to deduct any Withholding Tax from payments we make to you. These forms effectively make it your responsibility to declare the income you earn from us to your local Tax Dept.

Other countries have different systems and depending on your country we may have to deduct some Withholding Tax, usually 10% of any money we send you, more for some countries. Most European countries, Australia, Canada etc require us to deduct 10%.

We will pay any tax deducted to the Japanese Tax Department and send you a receipt showing how much was paid. You can use this receipt to claim or offset against Tax commitments in your own country.

Without the forms we have to deduct the applicable amount of Withholding Tax from any payments we make to you…….up to 25% in some countries, so it's in your interests to fill in the forms obviously.

The law in regard to Withholding Tax between Japan and all the different countries is always being changed. However as we send this to you today the above is applicable.

Apart from this the only deductions are whatever your bank may or may not charge you for receiving the funds. We don't cover this.

What's The Difference Between an "All Inclusive Royalty" and a "Separated Royalty" Agreements?

There are two types of Royalty that we pay to bands we license and release in Japan.

1.Master Disc Royalty

This is the Royalty paid to you as owners of the actual Master Disc. Master Disc Royalties are paid direct to the person(s) or company that owns the Master Disc.

2.Mechanical (Copyright) Royalty

This is the Royalty that is ultimately paid to the people or persons who wrote and own the Music and/or Lyrics that are contained on the Master Disc. ie. Your band covers Prince's "Purple Rain". The song is not yours, the Mechanical Royalty has to go to Prince. Mechanical Royalties are paid to official collection agencies such as ASCAP in the USA who then get the money onto the rightful owner(s) of the song. In Japan Mechanical Royalties are paid to JASRAC , an affiliate of ASCAP.

They are two different things.

When we License we can pay them combined to you as an "All-Inclusive Royalty" a one ,lumped together Royalty that has provision for both Masters and Mechanical Royalties that we pay direct to you and don't involve JASRAC.

Or if you require we can separate the Royalties and pay the Master Disc Royalty to you and the Mechanical Royalty to JASRAC. This is called a "Separated Royalty"

Its your call, usually bands that are not Published prefer to get the All Inclusive Royalty.

Bands that are Published usually have to separate the Royalties.

Summary

The Licensing procedure is not rocket science. It sounds a little technical but its not a hard process. We will walk you through each and every step and if you don't understand or are worried about something then ask us ….or ask someone you know well on your side of the world who has experience in Licensing releases overseas to explain it to you or enlist the services of a Lawyer to look after your interests if you are still worried or concerned.