The NEW AFTRA Code Broken Down in Plain English

The battle between record companies and its artists is a tired cliche. But with the advent of new income streams for copyright holders and artists such as Web casting royalties, mobile music, and musi

The battle between record companies and its artists is a tired cliche.

But with the advent of new income streams for copyright holders and artists such as Web casting royalties, mobile music, and music contained in games-record companies must be willing to deal with the artist as more of a "partner" in the future as opposed to a mere royalty participant.

As such, the music industry is in the process of redefining itself and below are just some of the changes that have already occurred, some issues that still need to be addressed, and some examples of where the music industry seems to be going.

AFTRA stands for the "American Federation of Television and Radio Artists." It represents the rights of recording vocalists and radio and television performers.

AFTRA is one of two (2) unions that represent the rights of recording artists in America. The other union is the American Federation of Musicians (AFM), which represents the rights of instrumentalists or "session players."

Both unions undergo intense and sophisticated negotiations with record labels to reach agreements that are both fair and beneficial to those they represent.

The agreements between the unions and the record labels are sometimes referred to in recording agreements as "collective bargaining agreements."

Moreover, the AFTRA union not only covers royalty singers and back up vocalists but it also covers television and radio announcers, actors, comedians, narrators, and sound effects artists.

After 18 months of negotiations with the record labels, the new AFTRA National Code of Fair Practice for Sound Recordings (the "Code") was finally completed and includes numerous beneficial provisions for royalty artists and non-royalty artists alike.

One of the biggest benefits of the new Code is the requirement that the label make a contribution to provide every artist signed to any AFTRA signatory record company with at least individual health benefits from the AFTRA Health Fund.

These benefits currently include medical, hospital, prescription drug coverage, dental, and life insurance. The Code covers sound recordings on vinyl albums, cassettes and compact discs and includes all formats as well as books on tape, cast albums, and any other sound recording utilizing vocal performances.

The Code applies to artists who render services for record labels who are signatories to the AFTRA Code and it applies to both royalty and non-royalty artists.

In essence, whether an artist has a record deal or does not have a record deal, if an artist performs on albums for a label that is a signatory to the AFTRA Code, then the artist will receive all the benefits of the AFTRA Code and may be able to participate in the AFTRA insurance and pension benefits.

All the major labels and most of their sub-affiliates are signatories to the AFTRA Code as well as many independent labels.

Currently, there are five (soon to be four) major labels which are as follows: Universal Music Group which includes Interscope, Geffen, A&M, Island/Def Jam, Motown, and DreamWorks; Warner Brothers which includes Atlantic, Lava, Elektra, and Maverick, EMI which includes Capitol and Virgin, Sony, which includes Columbia and Epic, and BMG, which includes RCA, J Records and Windham Hill.

At the time this article was written it was widely anticipated that Sony and BMG were going to merge, creating the Sony-BMG Music Group.

The independent labels that have signed the AFTRA Code include ArtistDirect, Hidden Beach, Curb Records, Artemis, Audium, Anti (owned by Epitaph), Hollywood, Lyric Street, Milan, and Concord, just to name a few. All labels under Koch International are expected to be signatories to the AFTRA Code in 2004.

If an artist signs a record deal with a signatory label, then the artist will automatically be eligible for health benefits. No matter what.

Prior to Jan. 1, 2004, royalty artists were eligible for only one year of health insurance upon signing their recording contract and then had to meet a certain earnings thresholds before they could be eligible for continued health benefits.

Now, if the artist is signed to a record label and the artist does not meet the "earnings threshold," the record label still has to make the AFTRA H&R contribution, which would entitle the artist to "basic coverage" or the "Individual Plan" under the Code.

Under the new provisions of the Code, if an artist is signed to a signatory label-then that artist will be eligible for health insurance.

Will an artist get health insurance if he or she is not currently signed? Yes-if the artist performs on other artists' albums and the artist meets the "earnings thresholds" OR if the artist was previously signed and the artist is still meeting the "earnings threshold."


If within a 12-month period, an artist earns a collective amount of $10,000 then that artist is eligible for health benefits under the Code.

Even if the artist is a vocalist or rapper who performs on other artists' albums-the artist must make sure that he or she gets a fee for his or her performances as every cent made will apply. Fees paid to those performing on television such as Saturday Night Live, Jay Leno, the American Music Awards, etc., are also applied to the earnings threshold under the new Code.

Moreover, since the mid-1990s, earnings credit includes unrecouped royalties, so it includes those earnings that are not actually "paid" to artists.

If an artist does meet the $10,000 12-month earning threshold, then the artist will have a premium of $250 per quarter that has to be paid to participate in the plan-which comes out to be roughly $83 per month.

Under this "Individual Plan" an artist's spouse or children are not covered but a "buy up rate" can be purchased for additional coverage.

Dina LaPolt is an attorney at LaPolt Law in Los Angeles and is on the Attorney-Manager Advisory Board for AFTRA.