In the music business, ‘spec’ has 2 faces.
As a composer, I have seen many situations similar to the graphic design examples as you describe. Most independent film-makers do not think to budget any money for music. At the very low end, they simply use their favorite CD’s, thinking they won’t get caught. Many enlist musician friends or local bands to provide music. There are those who have professional knowledge and, like bar owners, don’t want to pay for music. They know many musicians are willing to do it free and unaware of the legalities.
They offer exposure (as if they can provide it) and often run contests like the ones you describe. Usually, the terms dictate full ownership of the work with no compensation for the artist and perpetual license for the producer. One such film offer, recently posted on CL (craigslist), promised exposure in a movie distributed world-wide. Upon scrutinizing their contract, there was no provision addressing copyright, publishing, performance rights, licensing or performance reporting. I declined to send any music.
As all my musical works are copyrighted, owned by me and licensed through BMI, a ‘spec’ film can be profitable if all the proper contracts are signed. If a producer has already secured distribution or air-time, then there will be a performance royalty. If the producer agrees to file broadcast and theatrical performance logs, then it can be worth it for me to waive license fees. Even a full custom score can be worth doing for ‘free’ if the paper work is done right and there is a retail or broadcast revenue stream. Ownership of publishing rights and especially copyright would have to be a separate part of such an agreement.
In the recording studio, ‘spec’ means something entirely different.
It means the band wants you to record them for free because they are so good.
“You are undoubtedly rich because you own gear, and being so lucky, you owe the world something back for it, so why not start with our band? We are so amazingly great that you will make millions from recording our album.”
The band usually does not get signed, More often than not, they break up within months of the recording, which languishes on the shelf.
If the band gets signed-
Any recording that has not been released AND sold 10,000+ copies is considered a demo and will be re-recorded by the record company with funds LENT TO THE ARTIST FROM FUTURE SALES which are collected first ahead of any payments to the band itself.
There is no royalty structure for engineers. If you mixed it for free, you’re screwed.
The record company will not recognize or honor any ‘spec’ commitment made by the band before their involvement. The producer of the original recording will not qualify for any percentage from the label unless his recording is released by them. He will get 3% of the net if it is. Most often, a new producer is assigned by the label and the old recordings are forgotten. Inevitably, both the band and label’s attorneys will insist that the original studio and producer need not be paid and will not have the strength to fight the issue.
Occasionally, a band makes it just like the fairy-tale and the original ‘raw’ rccord is a hit, elevating both band and producer. To say it happens once in every 100,000 such bands would be quite generous. The problem is that these instances are portrayed in promotional materials and media as commonplace, enforcing the belief by millions of young musicians that any ‘producer’ can make them famous.
As a studio owner, ‘spec’ means ‘free’, so the band better be really important to you to record them for nothing. Since studio reputations are best spread by word of mouth, it can be advantageous to record a group for free simply to get them hawking your services around town. Know that this is a give away and any speculative deal with the artist would have to be honored by them out of their own pocket. The label will not recognize your involvement unless they are buying a successfully distributed product.
With advent of online distribution, this may change. Nonetheless, a solid understanding of copyright, performance rights and mechanical royalties is crucial for a studio dealing with original artists.
I hope this viewpoint is useful to you. Keep up the good work.
Brian ‘Cousin B’ Ascenzo
Location; Las Vegas