Creative User Account
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The royalties model for "Creative Users"

 

For "Creative Users" taking part on developing audio- and multimedia composings by inputting their specific entries, a profit sharing on the purchases of composings they are participating at is forseen according to the regulations made in the "Special Terms and Conditions of Use" for the "Creative Account" and the royalties formula described here.


As we were looking for a fair balance between the users interests and also on legal grounds the royalities model of cocompose.com is unfortunatelly a bit complicated. Therefor in the subsequent we explain a view circumstances and concepts, explain the royalities formula and give some examples as well. Exclusive the royalities formula itself the subsequent explanations are not relevant in terms of right, but solely the regulations made in the "General Terms and Conditions of Use" and the "Special Terms and Conditions of Use" for users of the "Creative Account". 

In advance a few terms:

To make the description of this complex subject possible, we need a few terms, wich will emerge again and again. Let us try to explain the main important terms:

Piece of work:
A "piece of work" in terms of copyright is the protected result of a inventive agitation. The inventive benefit is to realize an idea in a kind that makes it perceptible to others. Due to its perceptive form the idea becomes a "piece of work".
But a "piece of work" has to have a certain individuality called "level of creation" and has to be beeing created consciously to get the status "piece of work". That´s why we call pieces of music, graphics, videos, captions and and also Lyrics a "piece of work" as far as they have a certain "level of creation".

Originatior (author):
The creator of a piece of work, in other words, that one who created the piece of work is called "originator". So the originator is the one who made an idea consciously and in his very special individual way perceptible to others.

Co-originator (co-author):
If somebody enhances the piece of work of another one by conciously altering the others work on his very special individual and perceptible way then he creates a new piece of work. This also is a creative act but he could solely do this because the real originator in advance made his idea perceptible to him. That´s why the originator of the original piece of work now gets the co-originator of the new piece of work.

But without permission of the originator and bailee one is not allowed to create a new piece of work, wich is an altered version of the originators piece of work and so based on that. For this reason a user, can only add his piece of work to a shared project at cocompose.com, if he affirms to cocompose.com the possibility to alter his work. According to the regulations of cocompose.com such alterings without further permission are only allowed for cocompose users (Creative User) and only  for the further developement and enhancement of projects and composings on cocompose.com´s platform.

Sub-licensing:
cocompose can only publish and offer a piece of work, if the originator granted his permission to do that. We receive this right from you by accepting the General- and the Special Terms and Conditions of Use. What happens, if business partners of cocompose.com are interested in an undefined kind of partnership? For instance there could be concluded a partnership for exploitation at another Internet-Plattform or maybe a record company wants to conclude a contract with cocompose to produce a CD of the best composings.  In such a case cocompose would grant a sub-license to its business partners and of course would share the net profit in the same way it does with the profits resulting from the composing purchases executed by end users on the interent platform of cocompose.com.

What are royalties and how do they emerge?

Royalities are prorated pay offs to the artists (Creative User) based on the net profit resulting from the commercial exploitation of the artists work. At cocompose we also call this profit sharing as the profits are prorated among the particular artists of sold composings following the subsequent royalities formula.

Of course you can receive royalties only if your entry (piece of work) in fact is object of the profit made. If for instance cocompose.com can achieve a net profit of 1.000,00 EUR resulting of the payable purchases of the composing A and wich was created in the project X, then you are not automatically participating on the shared profits just because you added e.g. your audio track Z to the project. So, not just the participation at a project ist essential, as this says nothing about, if your track made a successful contribution on the profit mentioned.

But if in fact your audio track Z is a direct element of the composings A (this means composing A contains your audio track Z as one of its tracks) the situation changes. Obviously it was also your entry, which made a contribution to success. Thatfor the system considers your track at the allocation of the profit made.

It´s getting more complex, if another user takes your work, reinterpretes  or alters it an then submit it to the system. 

An example: 
Let´s say, your audio track Z has a specific, very catchy melody, which was definitely composed by yourself playing on a piano. Ok, you are the originator of this piece of work. Another cocompose user U loves your melody but feels that your melody sounds better and fits much better to the other tracks of the project if it is played on a flute and is diversified a bit. So he is going to play your melody on his flute while diversifying your melody, but your melody is still clearly perceptible.  As next he´s adding his record (your altered melody played by him on a flute) as the new audio track Y to the project X.

As next we suppose, that audio track Z (melody played on a piano) is not directly included in the composing A as a sound track, but his track Y with the flute is.
What to do now? Is it fair, that the user U takes part on the profit sharing, but you don´t, though you are the originator of the melody? We think it is not. This can be solved better! 
That´s the reason why in such a case the other user U is obliged to make a "based on"-entry when submitting his entry. With this "based on"-entry, he gives the system notice, that it was also your preliminary work, which made the success of composings A possible, since you are the original author of this melody. Don´t forget your melody is clearly perceptible. Because of the "based on"-entry the system can now recognize, that you as the original author has become the co-originator of the new submitted track Y and can now consider also you at the allocation of the profits made, though your track with the melody played on the piano is not at all a sound track directly contained in composing A . That´s fair, isn´t it?! 

This works only under the precondition, that the other user does not forget to correctly indicate your track Z by making a "based on"-entry when uploading his track Y. In case he forgets to do this the system has no chance to correctly define the users entitled for profit sharing. That´s why the "based on"-entry is obliged for everybody who is inputting his piece of work into the system, if this is based on the work of another cocompose.com-user!

In the subsequent examples we assume that, that all users made their entries correctly.

For which of my entries can I get royalties? 1)

At cocompose.com there are entries of different kinds possible. If solvable at all, it would be technicallyy extremly expensive, if the system of cocompose.com had to consider every entry possible concerning the entitlement for profit sharing. That´s why we defined, which kind of entries coming in question for profit sharing. We will indicate them in the following.

Generally you can only participate on profit sharing, if your piece of work in fact is object of the profits made by beeing a directly contained part of a composing or beeing the original source of one or more of the composings tracks, referenced by a "based on"-entry.

One precondition is, that your piece of work is clearly identifiable by the system as a entry possibly entitled for profit sharing. Thatfor the entry must have been entered/submitted successful and technically correct (in)to the system. If your entry then is listed as a seperate audio- / video- / captions- / cover- or lyrics track within a project and got its particular cc-ID assigned the first step is done.

All other entries (e.g. comments,  combining tracks, voting, naming a composing, etc.) in principle do not get a cc-ID and are not entitled for profit sharing. If you make this kind of entries you make them on a voluntary basis and free of charge. This applies especially, if you enter a lyrics text or something similar as a whole or a part of it in the comments area, instead of entering it as a real lyrics track by using the function made for this.

Table A: Overview entries / possible partcipation at profit sharing: 1)




Type of entry (ggf. media type)
Input into system
Submitted by
Participation on profit sharing possible?
    from chargable
downloads
from
sub-licensing 
to third party

from downloads or 
exploitations
free of charge or other downloads
audio tracks

'project' →
'audio tracks' 
or 'favorite tracks' → 
'add audio' 
or 'edit audio' → 
upload'

uploadYes (audio- and
multimedia-
composing, 
if contained)

 Yes,
if part or 
object
of a 
sub-license
and not 
already
compensated
by another
kind of
entry
(e.g. no 
multiple-
entitlement
for  
lyrics text and captions
of the same 
user)

 No
Vvideo tracks'projekt' → 
'video' → 
'add video' 
or 'edit video' → 
'upload'
upload

Yes (only
multimedia-
composing, 
if contained)

 

C
captions tracks

'projekt' →
'captions' → 
'add captions' 
or 'edit captions' →
'Save and return'

text input of
programmable
timed text
in 
input fields

Cpcover picture 
(track)
'project' → 
'cover image' → 
'add cover' 
or 'edit cover' → 
'upload'
upload

No
(exept if
"based on"-
e.g. source 
for a Video)

Lylyrics text 
(track)
'project' → 
'lyrics' → 
'add lyrics' 
or 'edit lyrics' → 
'save'
text input 
in 
input fields
No
(exept if
"based on"-
source e.g. for captions 
or video) 
 

"based on"-tracks
(A / V/ C / Cp / Ly)
referenced by tracks contained
in a composing

 'project' →
'A' / 'V'/ 'C' / 'Cp' / 'Ly'  →
'add A / V/ C / 
Cp / Ly' 
or '- edit' →
"based on"

Input of 
project ID
and cc-ID of 
source-work
Yes
according definition
'A' / 'V' / 'C'
 

"based on"-tracks
(A / V/ C / Cp / Ly)
referenced
by tracks contained
in a composing
but mutiply
referenced in a chain


Chained
"based on"-
references 
by multiple users

respective 
input of 
project ID
and cc-ID of 
source-work
 Other
inputs /
entries

All other
Input-
possibilities,
especially 
Comments and 
initial voting of
composings

 No No

 

Royalties formula A and B - Allocation of the net profits made by chargeble downloads or sublicensing: 1)


If there are achieved profits by chargable downloads of a composing or a sublicensing of it or of single pieces of works to third parties they are allocated using the following royalties formulas. Here is to consider that the multimedia contents of a multimedia composing and their related "based on" sources are treatened seperataly for each multimedia type (Audio / Video / Captions).

The royalties formula B in priciple is relatet to the result "U" (artists percentage in total) of the royalties formula A.  The royalties formula A is always used as first.

All values and definitions mentioned in the subsequent royalties formulas are related to the respective profit making composing or its contents or the profit making pieces of work itself (if it is directly object of profit itself), wich are directly a part/element of it (track/content is directly part/element of profit making composing or is itself profit making object) or indirectly a part/element of it (track is referenced as "based on"-source track/content of a profit making composing/piece of work) and its respective authors ("Creative User" in the subsequent also named "artist").

 

Royalties formula A : Evaluation of the participating artists percentage in total

(respectively valid for audio / video / captions / cover and lyrics)


Net profit: G

Percentage cocompose (19%): C = G  x 0,19

Other exceptional costs emerging directly from exploitation (do not emerge at normal circumstances): S

Subtotal:  ZW = (G - C - S)

Contributions to ‘Künstlersozialkasse’ (German social insurance for artists forced by law, currently 4,8 % of the pay-out amount): K = (G - C - S) / 104,8 x 4,8

Artists percentage in total (percentage of all artists participating with their piece of work):

U = G  - (C - K - S )   

or alternatively:

U = ZW / 104,8 x 100

or alternatively:

U = G - ((G x 0,3) - (((G - C - S) / 104,8 x 4,8) - S)


Explanation:
From the net profits made "G" cocompose gets a commission "C" of 19% as compensation for the development and the supply of the internet platform inclusive the costs for the ongoing services (costs of server, service, hire, employees, licenses, taxes, etc.).

In case of eventuating special circumstandes emerging unexpected extra costs that are directly related to the exploitation of the respective composing or its pieces of work cocompose can subtract these exceptional costs from the net profit "G". But dont´t worry this will not happen under normal circumstances as these are no costs for the ongoing services of cocompose.

As a German company cocompose is forced by law to make a contribute to the ‘Künstlersozialkasse’ (German social insurance for artists) of 4,8% (status 2008) of the sum payed-out to the artists . This valids for all artists ("creative users") which receive royalties from cocompose, no matter if they are insured at the ‘Künstlersozialkasse’ or not and no matter if the artists are settled in Germany or not (thanks to the German politicians!). That´s why the contribution "K" for the 'Künslersozialkasse' of 4,8 % is subtracted from the subtotal "ZW".

The remaining amount "U" (normally aprox. 77% of the net profit "G") is the pay-off amount in total allocated among the artists entitled for profit sharing using the following "royalties formula B".

 

Royalties formula B : Allocation of the artists total profit percentage "U" among the artists entitled for profit sharing, wich results from the net profit "G"

(respectively valid for audio / video / captions / cover and lyrics)


Definitions: 

Percentage in total for the artists entitled for profit sharing = U
Number = n
"Creative User" (entitled for profit sharing) = CU
Track without "based on"-entry (directly part or itself object of the profit making composing/content) = TR
Track with "based on"-entry (directly part or itself object of the profit making composing/content) = TRB
"based on"-source track (indirectly part of the profit making composing/content/object) = BO
Number of "Creative User" entitled for profit sharing of the profit making composing/content/object = CU x n
Number of tracks of the profit making composing/content/object = TR x n
Number of "based on"-source tracks (referenced by "based on"-entry) = BO x n
Number of "based on"-source tracks referenced by "based on"-entry plus the the referencing track itself = bn
Percentage per respective "Creative User" of profit sharing (directly or indirectly entitled for profit sharing) = GA(CU) 


Calculation:

All "Creative Users" entitled for profit sharing of a composing/piece of work/object are as a whole entitled for the artists total profit percentage "U".

To find a balance between "Creative Users", wich are entitled by many contained tracks, "Creative Users", which are entitled by referenced "based on"-source tracks and the entitled "Creative Users" as a whole and to avoid missuse, the artists total profit percentage "U" in the first instance is devided into the four sub-formulas "B1" to "B4" at different weighting.

The sub-formula "B1" are assigned 20% of the artists total profit percentage "U". This value is then divided by the number of the tracks/pieces of works "TR" and "TRB" entitled for profit sharing. Each respective"Creative User" then is entitled for such a percentage of the resulting output "B1", as he is participating with tracks/pieces of work "TR" and "TRB", which means, that the number of the users participating tracks of the mentioned types is multipied with the output value "B1". At this sub-formula "B1" "based On"-tracks are not considered.

The sub-formula "B2" are assigned 20% of the artists total profit percentage "U". This value is then divided by the number of the tracks/pieces of works "TR", "TRB" and "BO" entitled for profit sharing. Each respective"Creative User" then is entitled for such a percentage of the resulting output "B2", as he is participating with tracks/pieces of work "TR", "TRB" and "BO", which means, that the number of the users participating tracks of the mentioned types is multipied with the output value "B2". At this sub-formula "B2" "based On"-tracks are considered.

The sub-formula "B3" are assigned 20% of the artists total profit percentage "U". This value is then divided by the number of "Creative Users" "CU" entitled for profit sharing, independent if they are directly entitled by their tracks/pieces of work "TR" and "TRB" or indirectly entitled by their referenced "based on"-source tracks/pieces of work "BO". Each respective"Creative User" then is entitled for one fraction of resulting output "B3".

The sub-formula "B4" are assigned 40% of the artists total profit percentage "U". In the first instance this value is then divided by the number of the tracks/pieces of works "TR" and "TRB" entitled for profit sharing. In the second instance tracks "TRB", which have one ore more "based on"-entries (so they are based on the tracks of other users) at first is assigned one fraction of the resulting output but at second this fraction is to share in equal parts with the "based on"-source tracks they are referencing to, while  tracks "TR" which do not have a "based on"-entry one fraction of the result is assigned each and this value has no to be shared with other tracks.

For those tracks "TR", which the "Creative User" totally created by himself  (no "based on"-entry) he is entitled for such a percentage of the resulting output "B4", as he is participating with tracks/pieces of work "TR", which means, that the number of the users participating tracks of the mentioned type "TR" is multipied with the output value "B4".
For those tracks "TRB", which the "Creative User" created on the preliminary tracks "BO" of other users (with "based on"-entry), all of the respective users have to share one fraction of the resulting output "B4", wich means that this value is devided by as many parts as the respective track has "based on"-entries and each of the affected "Creative Users"(Owners of the referenced "based on"tracks and the owner of the directly contained track) is entitled for one fraction of this devided result for this respective track "TRB". In case a "Creative User" is participating with more than one track having "based on"-entries this calculation is made first for each track before the single results of each of his tracks are counted together to find the value he is entitled for. The same calculating is used for "Creative Users" indirectly participating with their referenced "based on"source tracks, if their respective tracks are referenced more than one time. Example: is one track"TRB" based on two other "based on"-source tracks "BO" each of this three tracks is entitled for 1/3rd of the result a track "TR" without "based on"-entries would be entiteld for resulting from the calculation made in sub-formula "B4".

The final percentage of a participating "Creative User" he is entitled for at the artists total profit percentage "U" as a whole is calculated out of the sum of the each respective single result calculated by the sub-formulas "B1" to "B4".

Example (on base of a virtual song (composing) "Z" and a virtual artists total profit percentage "U" of 1.000 EUR): 

 

Let´s say the song "Z" was created by eight tracks of a music project. These eight tracks has been uploaded to the project by the four "creative users" Tom (drums, bass1, piano, and synth), Peter (bass 2, guitar), Michal (flute) and Sandra (vocal). But two of these tracks (Sandras vocal and Toms piano) are based on three other tracks that were formerly added to the system of cocompose.com by the two "creative users" Christine (lyrics) und Samuel (lyrics refrain und keyboard). As mentioned the formerly uploaded tracks of Christine and Samuel are not directly contained in the Song "Z", but Sandra and Tom, which had catched up the ideas of Christine and Samuel, did correctly enter the formerly created tracks as the "based on"-source tracks, by naming their project- and cc-ID´s, when uploading their new tracks. Christine and Samuel are also entitled for royalties and can now be considered by the system.

To make the calculation regarding to the "royalties formula B" better understandable, we simply use a fictitious amount "U" of 1.000 EUR, which has to be shared among the "creative users" (CU x n) entitled for royalties regarding the song "Z". We us the number of 1.000 EUR becouse it is easy to calculate with it. In reality this calculation is made with Cent-amounts, as the system does this calculation automatically and directly on the fly at each chargable download and does directly credit the resulting amount to the users cocompose-account as soon as cocompose has received the money from the downloading customer.

So, the fictitious amount "U" of 1.000 EUR used in our example, is the remaining amount of the net profit made by the song "Z" after the calculation regarding "royalties formula B" is done. As next this amount "U" is divided and assigned to the four sub-formulas "B1" to "B4" in different percentages for further calculation. The subformulas "B1" to "B3" is assigned a value of 20 percent each and the subformula "B4" a value of 40 percent. On basis of these sub-formulas the system is now determining for which value of profit sharing each "creative user" is entitled for. The  four different sub-formulas do have the fuction to find a fair balancing between the respective interests of each participating "creative user". That´s why each sub-formula is using another key to share the assigned amount among the entitled "creative users". Now the four single results for each entitled "creative user" coming out of this calculations are added together for each user to get the final percentage of profit sharing GA(CU) for each entitled "Creative User". This resulting amout is then firstly credited to the cocompose-account of each user and will be payed out to the users PayPal-account on specific key dates.


Number "Creative User" of composing "Z" entitled for profit sharing
   CU x n = 6    
 
 U =1.000,00€=100%  
Trackcc-IDCUInstrumentBased onTRTRBBObnB1B2B3B4GA (CU) 
20%20%20%40%
200€200€200€400€
cc-IDn1/11/11/11/11/bn
TR
+
TRB
11 Tom Drums  1   25,00€18,18€ 50,00€   
10 Tom Bass 1  1   25,00€18,18€ 50,00€   
9 Tom Piano11 1 225,00€18,18€  25,00€  
8 Tom Synth  1   25,00€18,18€33,33€50,00€ 381,06€ 38,11%
7 Peter Bass 2  1   25,00€18,18€ 50,00€   
6 Peter 
 Guitar  1   25,00€18,18€33,33€50,00€ 219,70€ 21,97%
5
 Michal Flute  1   25,00€18,18€33,33€50,00€ 126,52€ 12,65%
4 Sandra Vocal2 + 32 1 325,00€18,18€33,33€ 16,67€93,18€

 9,32%

O3 Christine Lyrics    1  18,18€33,33€ 16,67€68,18€ 6,82%
2 Samuel Lyrics (Refr.)    1  18,18€  16,67€  
1 Samuel Keyboard    1  18,18€33,33€ 25,00€111,36€ 11,14%
  623  Checksum:U = 
 1.000,00€

 100,00%

 


 1) errors excepted and subject to change