A couple of notes about money, as well, from an entertainment law student / semi-professional composer:
At 8/21/12 12:51 AM, DavidOrr wrote:
-Royalty-Free Stock Audio license: Pre-written stock audio a developer wants to use in a production. Cheap, one-time fee license cost.
For unsponsored Flash-games and smaller independent game developers, upfront payments are usually out of the question: they generally don't have any overhead for their projects, and any associated costs tend to be recouped by actually selling the game. In these cases, you will probably work out a royalty agreement, like NewGrounds has ad revenue sharing.
Depending on how much music is being used, how good your music is (this can be hard to think about objectively: your friends will tell you it's great, and you will probably either over- or under-appreciate the value of your own work), and how good you want to get in with the dev team, you could probably go for about 10-15%. After all, you're not really doing any work: chances are, you're not even filling out any paperwork to negotiate the license. Being good at negotiating is very useful in getting a better rate: again, though, we have the problem of setting your cost too high or too low. 5% of the royalties isn't going to be very profitable for you: if the game makes $80 in ad revenue, you're going to get $4. But, the artists and programmers you're working with are probably also trying to break into the industry: if you go in demanding 50% of the profit, you're probably going to burn that potential future connection, because they'll see you as wanting too big a slice of the pie.
But it's even more complicated than that: the size of the dev team figures into it, too. If there are four people on the team - e.g. two artists, a programmer, and a musician - then everyone's going to walk away happy with a four-way 25% split of profits. That doesn't mean that you should ask for 50% of the profits if it's a two-man team, though: the other guy probably feels he should be compensated more if he's doing art and coding, and you're just providing music. Likewise, if your music is in a rhythm game with 50 other tracks, you're not going to have much negotiating power over what revenue you get: your track is and will be easily replaceable, because the music doesn't need to have a certain feel or personality to it.
-Non-exclusive Custom Audio License:Custom audio written for the client. I retain all rights and may resell the work as stock audio. Since I retain the rights, I may put it in compilation albums, and collect royalties if we work out a royalty cut agreement. Cheapest of the custom audio options.
This is another area where you have to take a look at royalties v. upfront payments. I won't disclose the name of the client, but one job I had in the past required custom music: we were a three person team, and we negotiated that each contributor would get 30%, and the remaining 10% would go toward other administrative fees (such as filing for copyright with the Copyright Office).
If the game has a sponsor or a distributor, you should ask politely if there's any money for development costs. Yes, music is a development cost, even though it's typically one of the last things to be added to a game. If it's a few hundred dollars, you need to weigh the cost-benefit of upfront v. royalty shares: do you negotiate for a $150, or do you ask for 20% of the profits? And if you go for the $150, will you feel like you've been ripped off if the game goes onto be the next big thing and rakes in $50,000+?
-Exclusive Custom Audio License:Custom audio written for the client. I retain all rights but will not sell it to any other developer. Since I retain the rights, I may put it in compilation albums, and collect royalties if we work out a royalty cut agreement. More expensive option, since I am locked to one commercial use license.
You need to be careful here, though: it's best to stipulate with your client that you retain the right to distribute your track on a CD for-profit since, technically, reproduction and distribution are two of the rights they'll be getting under the license (otherwise, they'd have to get your permission every time they sold a copy of the game with your music in it).
-Custom Audio Buyout:Custom audio written for the client. They buy the rights, and can do whatever they want with the audio (resell, re-license, etc.) The most expensive option, since I have to cut all ties to my music :(
This is called a Work-for-Hire and it should be very, very, very expensive. Professional film composers, working with Hollywood studios, can charge upwards of $1200 per minute of finished audio.
On top of what David said, there are a couple more things you should keep in mind:
- termination clause: if you're going to get a lump sum of money after the game is released, you'll want a termination clause. This would basically stipulate that you HAVE to get paid for the work you've done even if the developer fires you before you finish. This can either be an arbitrary sum, such as 50% upfront (i.e. before you even start working), or it could be derived from the amount of work you've already done (e.g. if you've written three tracks, you want 20% of the original amount).
- rewrite clause: basically, this states that you'll do a couple of complete rewrites for free. If they want more rewrites after that (as in, you're basically writing completely new tracks), they'll have to pay an additional fee on top of the agreed-upon amount. This basically saves you from being asked to make a gazillion changes to one track.
I think that's covered most of it. If you get involved with someone or get an offer you're not sure about, I'm sure some of the semi-pro and professional composers here would be willing to help you out if you have further questions.