HitRecord Terms for Including Contributions for Monetized Final Products

Last Modified: August 6, 2021

View our previous Terms for Including Contributions for Monetized Productions (posted: June 7, 2018, January 13, 2016 and February 28, 2017)

All capitalized terms used but not otherwise defined in these Terms for Including Contributions for Monetized Final Products (“Monetized Final Product Terms”) have the meanings ascribed to them in the HitRecord.org , Inc. (“Company”) End User License Agreement and Terms of Service (“Terms”).

Notice of Selecting a Final Product and Grant in Contributing Artist’s Compensation Pool.
1. Process
  1. Contributing Artists Defined. If you have Posted or made a Contribution to HitRecord and the Operating Committee (defined below) selects it to be included in a Final Product to be commercialized in accordance with the rights granted in the Terms, then you will be deemed a “Contributing Artist” for that Final Product. The Company will notify you of its selection via electronic mail to the address associated with your account. For avoidance of doubt, (1) the Company will have the right to modify and edit any Contribution, and it is only the final version of a Contribution that the Company designates and distributes as a “Final Product” that will be commercialized; and (2) only Contributing Artists whose Contributions are part of a Final Product will be eligible, pursuant to these Monetized Final Product Terms, for compensation resulting from the commercial exploitation of that Final Product.
  2. Contributing Artist Shares. If any Contribution you have Posted or provided to HitRecord is part of a Final Product that has been distributed, commercialized, and generated Compensation (or, in the Operating Committee’s determination, other tangible benefits) for a Contributing Artists’ Compensation Pool (defined below), then the Company will notify you via electronic mail to the address associated with your account of the Contributing Artist’s Share (defined below) that has been conditionally granted to you following monetization. We say conditionally because you are not entitled to any allocation of a Contributing Artists’ Compensation Pool unless you meet the requirements for a Participating Contributing Artist, as defined in Section 2.a.i below. As set forth in the Terms, you are welcome to comment on the Contributing Artist’s Share that you and others have been conditionally allocated within the Contributing Artists’ Compensation Pool (e.g., make a case for a different percentage, notify the Operating Committee of any omissions in attributions to your Contributions, etc.) for a Final Product, provided that the Company may accept or reject any different allocations suggested in any comments and change the allocation of the Contributing Artists’ Compensation Pool among all Contributing Artists for a Final Product in its sole discretion and at any time during the period in which the Company specifies for the determination of the Contributing Artists’ Compensation Pool, which in no case will be less than two (2) weeks from the date that the Company first notifies the Contributing Artists for a Final Product of their respective Contributing Artist Shares. The date on which the Operating Committee finalizes the Contributing Artists’ Compensation Pool is the “Allocation Date.”
Allocating Contributing Artists’ Compensation Pool.
1. Eligibility.
  1. Each Contributing Artist to a Final Product will be deemed a “Participating Contributing Artist” and will share in an applicable Contributing Artists’ Compensation Pool provided he/she:
    1. has accepted the Terms;
    2. complied with the Submission Guidelines;
    3. Posted or made a Contribution to HitRecord that is included in a Final Product; and
    4. Provided sufficient identifying information to enable the Company to pay him or her before the close of the period specified in Section 1.a.ii, which at a minimum includes full legal name, valid physical address, and any tax information required by applicable law (“Requisite Payment Information”).
  2. Employees, contractors, board members or other personnel of the Company and its affiliates (“HitRecord Personnel”) are not eligible to receive any distribution of funds from a Contributing Artists’ Compensation Pool. If a Contribution of HitRecord Personnel is used in a Final Product, shares of the applicable Contributing Artists’ Compensation Pool may be allocated to such HitRecord Personnel based upon the determined relative contributions of such HitRecord Personnel, but any dollar amounts related to these shares will be reallocated pro rata within that Contributing Artists’ Compensation Pool to the eligible non-HitRecord Personnel Participating Contributing Artists. (See “Reallocating” in (c)(iv) below for more information on the reallocation process.) For the avoidance of doubt, should any HitRecord Personnel cease to be an employee or contractor of the Company or its affiliates, they would again be eligible for the purposes of receiving a distribution of funds related to a Contributing Artists’ Compensation Pool to which they contributed before or after, but not during, their employment or contracting service with the Company or its affiliates.
2. Overall Compensation Pool Available to Contributing Artists.
  1. Contributing Artists’ Compensation Pool.
    1. The “Contributing Artists’ Compensation Pool” from a Final Product will mean:
      1. fifty percent (50%) of the Compensation (defined below) from a Final Product that has been distributed and commercialized, if any, and
      2. any amount the Company allocates to Contributing Artists for:
        
        products sold or licensed, or tangible expressions that serve as an inspiration for the sale or licensing of a derivative work of a product to third parties for distribution (e.g. on any form of linear or on-demand television), or
        
        amounts negotiated by the Company for allocation to Contributing Artists as part of a line item in an approved budget for any usage of the Final Product.
        
        Subparts (i) and (ii) of this Section 2(b)(i)(1)(b) are the “Discretionary Compensation Pool”.
    2. Retained Compensation. The Company will retain the remaining 50% of the Compensation, if any, in the case of Section 2(b)(i)(1)(a), and any proceeds the Company receives from any third party, such as a television distribution partner, whether directly or indirect, minus the Discretionary Compensation Pool, in the case of Section 2(b)(i)(1)(b) (the “Retained Compensation”). Because there are unlikely to be Compensation for many distributed Final Products due to the high cost of production (e.g. for television), the Company will seek to obtain amounts for the Discretionary Compensation Pool through negotiations with distribution partners. This may include specific, budgeted line item amounts that will be dedicated entirely to Contributing Artists or specific fees for the Use (as defined below) of a Final Product, whether alone or as part of a larger work. These amounts are likely to vary over time and be subject to the vagaries of arm’s length, free market negotiations.
    3. Identification of Discretionary Compensation Pool. The Company will identify the Discretionary Compensation Pool for each Final Product on HitRecord.
3. Allocations of Participation within Contributing Artists’ Compensation Pool
  1. Participating Contributing Artists for a Final Product will be entitled to a share of the Contributing Artists’ Compensation Pool as the Operating Committee will award in its sole discretion. The Operating Committee will make its determinations following the acceptance of feedback from the HitRecord community of Users. The comment period will be open for not less than two (2) weeks but may be kept open for longer periods in the Company’s sole discretion. The Company will identify the duration of the comment period for a Final Product when it first notifies the Participating Contributing Artists to that Final Product, subject to any extensions identified in the immediately preceding sentence.
  2. Notwithstanding any other provision of these Monetization Terms, if one or more Contributing Artists for a Final Product have failed to provide the Company the Requisite Payment Information by the Allocation Date (an “Unpayable Contributing Artist”), then any conditional allocation made to those Unpayable Contributing Artist(s) will be set aside until the earlier of (i) the date on which he or she provides the Requisite Payment Information, or (ii) the third anniversary of the Allocation Date. If those Unpayable Contributing Artist(s) do not provide the Requisite Payment Information by the third anniversary of the Allocation Date, then any conditional allocation made to those Unpayable Contributing Artist(s) will be deemed null and void and the Company will retain that conditional amount for use in paying contributors in future community projects.
  3. The share of the Contributing Artists’ Compensation Pool awarded to a Participating Contributing Artist will be the “Participating Contributing Artist’s Share.” For purposes of illustration only, if there are 10 Artists designated as Participating Contributing Artists for a Final Product, then the Operating Committee will allocate 100% of the Contributing Artists’ Compensation Pool among those 10 Participating Contributing Artists, which allocation could be made equally among all 10 Participating Contributing Artists or in any other manner as the Operating Committee may select on a case-by-case and Final Product-by-Final Product basis in its sole discretion. Accordingly, if Artist A is awarded a Participating Contributing Artist’s Share of 10% and Artist B is awarded a Participating Contributing Artist’s Share of 25% and the applicable Contributing Artists’ Compensation Pool is $10,000, then Artist A would receive $1,000 and Artist B would receive $2,500, upon distribution of the Contributing Artists’ Compensation Pool. The dollar amount of the Contributing Artists’ Compensation Pool allocated to a Participating Contributing Artist for a Final Product is the “Distributable Contributing Artist Compensation.” The Distributable Contributing Artist Compensation represent the full amount that is payable to a Participating Contributing Artist.
  4. Subsequent to allocation and prior to distribution, any shares of the Contributing Artists’ Compensation Pool awarded to Participating Contributing Artists who are HitRecord Personnel will be Reallocated back to the remaining eligible non-HitRecord Personnel Participating Contributing Artists within that Contributing Artists’ Compensation Pool. For purposes of illustration only, if (1) a Contributing Artists’ Compensation Pool is $10,000, (2) Artists A, B, C, D, and E are each allocated 20% or $2,000, and (3) Artist A is a Company employee, then Artist A’s $2,000 will be Reallocated back to the Contributing Artists’ Compensation Pool and Artists B-E will each receive 25% or $2,500.
4. When Contributing Artists’ Compensation Pool is Set and Paid
  1. The Contributing Artists’ Compensation Pool will be calculated semi-annually for each Final Product that is distributed and commercially exploited during that semi-annual period, and the Company will use commercially reasonable efforts to make available to each Participating Contributing Artist for that Final Product a statement (the “Contributing Artist Semi-Annual Statement”) setting forth the calculation of the Contributing Artists’ Compensation Pool for that Final Product and his/her applicable Participating Contributing Artist’s Share, if any. The two semi-annual periods will be the calendar months (1) January through June; and (2) July through December (each a “Semi-Annual Period”). Except as provided for below, a Contributing Artist Semi-Annual Statement will be made available to a Contributing Artist for a Final Product within one hundred eighty (180) days following the end of each Semi-Annual Period provided the Final Product was commercially exploited during that Semi-Annual Period.
  2. Public Disclosures of Contributing Artist Payments. PLEASE NOTE THAT ALL CONTRIBUTING ARTIST SEMI-ANNUAL STATEMENTS ARE MADE PUBLICLY AVAILABLE ON HITRECORD. WE MAKE ALL DISCLOSURES PUBLICLY AVAILABLE IN AN EFFORT TO PROVIDE FULL TRANSPARENCY TO ALL ARTISTS, CONTRIBUTING ARTISTS, PARTICIPATING CONTRIBUTING ARTISTS, USERS, AND THE GENERAL PUBLIC. IF YOU DO NOT WISH TO HAVE YOUR USERNAME AND THE AMOUNTS YOU HAVE BEEN PAID BY THE COMPANY MADE PUBLIC, THEN YOU SHOULD NOT CONTRIBUTE A RECORD TO HITRECORD.
  3. Please see our Privacy Policy for more information about how information about you may be shared or disclosed to third parties.
  4. Minimum Balance Requirements. Distributions of a Contributing Artists’ Compensation Pool for a Final Product will not be payable until the minimum balance of the Contributing Artists’ Compensation Pool is equal to or greater than Five Hundred Dollars ($500.00) (the “Minimum Compensation Pool Balance”). Once the Minimum Compensation Pool Balance is achieved, all Participating Contributing Artists for that Final Product will be eligible for a distribution equal to their Participating Contributing Artist’s Share; provided, however, that no Contributing Artist will be entitled to receive payment of his/her Participating Contributing Artist’s Share until he/she is owed at least Five Dollars ($5.00) in Distributable Contributing Artist Compensation (the “Minimum Distribution Balance”). We have to impose this limit so that the cost of distributing the Contributing Artist Compensation Pool does not consume Distributable Contributing Artist Compensation.
  5. Payment Procedure. Payments due Participating Contributing Artists pursuant to this paragraph will, except as provided for below, be due within one hundred eighty (180) days following the end of each Semi-Annual Period in which such balance thresholds have been achieved. All payments will be made in U.S. currency unless the Company elects, in its sole discretion, to make payments in other currencies. If the Company elects to make payments in other currencies, then the Participating Contributing Artist to whom the non-U.S. currency payment is made will bear any and all currency conversion costs.
  6. Minimum Balance Carryforwards. If a Minimum Compensation Pool Balance for a Final Product or a Minimum Distribution Balance for a Participating Contributing Artist is not achieved for a Semi-Annual Period, then that Minimum Compensation Pool Balance or Minimum Distribution Balance, as the case may be, will be carried over to successive Semi-Annual Periods until such Minimum Compensation Pool Balance or Minimum Distribution Balance, as the case may be, is achieved.
  7. Discretion to Distribute Sub-Minimum Balances. The Company reserves the right to distribute any amounts allocated to a Participating Contributing Artist even if the Minimum Distribution Balance for that Participating Contributing Artist has not been achieved. For example, the Company may choose to make a distribution to a Participating Contributing Artist who has had a balance under the Minimum Distribution Balance for a period of more than eight (8) calendar quarters. These payments, if made, are entirely discretionary and no Participating Contributing Artist will have a right to receive a distribution of Distributable Contributing Artist Compensation until a Minimum Distribution Balance is achieved.
  8. Offsets and Reimbursements for Overpayments. If the Company overpays a Participating Contributing Artist for any Final Product, then the Company may offset the amount of its overpayment from any future payments due to that Participating Contributing Artist, whether from the same Final Product or a different Final Product. If the Company overpays you by more than $1,000.00, then the Company has the right to demand a reimbursement from you, and you agree to reimburse the Company within thirty (30) days of receipt of the Company’s reimbursement request. The Company may make a request to you via electronic mail and you agree to accept communications via electronic mail. If an e-mail does not bounce back upon delivery, then you will be deemed to have received such e-mail one (1) business day following the transmission of that e-mail to you.
  9. Preparation of Participating Contributing Artist Semi-Annual Statements; No Contest Rights. The Company will prepare Participating Contributing Artist Semi-Annual Statements in good faith, and the calculation of the Contributing Artists’ Compensation Pool will be final, uncontestable, and apply to all Participating Contributing Artists participating therein. You are not permitted to contest a Participating Contributing Artist Semi-Annual Statement or your Participating Contributing Artist’s Share, but you are always permitted to communicate with the Company during any comment period to suggest new allocations for the Contributing Artists’ Compensation Pool for a Final Product. You acknowledge and agree that the Company is only able to offer Participating Contributing Artists participation in Distributable Contributing Artist Compensation on these terms and conditions and that permitting Participating Contributing Artists to contest allocations and payment amounts would be unduly burdensome and expensive for the Company.
  10. Delays in Distributions. Each Participating Contributing Artist acknowledges and agrees that the Company is a small, start-up company and that distributing Distributable Contributing Artist Compensation to Participating Contributing Artists can be labor intensive, time consuming, and expensive. We also want to make sure we get it right – which, in and of itself, is a difficult and time-consuming process. Each Participating Contributing Artist therefore agrees that the Company may suspend a distribution of Distributable Contributing Artist Compensation for up to two Semi-Annual Periods if the Company is not reasonably capable, in light of its then-current resources, of making a timely distribution. A determination of reasonable capability will be made, if ever, in the sole discretion of the board of directors of the Company. Any temporary suspension of distributions pursuant to this Section 2(d)(x) will result simply in a temporary carryforward of any Distributable Contributing Artist Compensation account balances, which will eventually be distributed to you in accordance with these Monetized Final Product Terms. In the event the Company delays the distribution of Distributable Contributing Artist Compensation pursuant to this Section 2(d)(x), the Company will notify the Participating Contributing Artists allocated a portion of the Distributable Contributing Artist Compensation subject to delay by electronic mail to the e-mail address associated with each such Contributing Artist’s account, and each Contributing Artist hereby consents to receive such notification via electronic mail. HitRecord may also provide notice by posting a message on HitRecord, such notice to be in addition to – and not a substitute for – notice by e-mail.
  11. Right to Donate. The Company reserves the right, but is under no obligation, to enable Participating Contributing Artists to donate payments that would otherwise be distributed to the Participating Contributing Artists in part or in whole to a designated 501(c)(3) charitable organization (a “Designated Charity”). If offered, in each instance the Participating Contributing Artist must affirmatively designate this choice via site pop-up or other selection tool, and in so doing waives any right to accept and receive Distributions related to periods for which such selection is made. After a Participating Contributing Artist elects to make a donation, the Company will pay donated amounts to the Designated Charity in lieu of making a payment to the Participating Contributing Artist, and any obligation to pay such amounts to the Participating Contributing Artist is extinguished. Participating Contributing Artists in the U.S. who make the choice to donate will not receive an IRS form 1099 reflecting donated amounts. Although uncommon, it is the responsibility of any affected US taxpayer on an accrual basis (vs. the cash basis) to ensure any income is properly declared and offset. Non-US taxpayers retain any and all related obligations for tax impacts in their jurisdiction in regard to donations of a Participating Contributing Artist’s Share.
5. Definitions
  1. “Adjusted Gross Revenues” means Gross Receipts minus Permitted Deductions.
  2. “Gross Receipts” means all revenues actually received by the Company directly from the publication, distribution, transmission, performance, merchandising, and any other use (collectively “Use”) of a Final Product in any and all media, whether now known or hereafter created, throughout the world, excluding only amounts received by the Company that are otherwise accounted for as contributions to the Discretionary Compensation Pool (e.g., a $50,000 per television episode budget line item allocable exclusively to Contributing Artists). For the avoidance of doubt, a Discretionary Compensation Pool amount will be allocated directly to Participating Contributing Artists and will not be subject to a 50/50 split with the Company.
  3. “Operating Committee” means the member or members of the committee that the Company designates, in its sole and absolute discretion, to determine the allocation of the Contributing Artists’ Compensation Pool for a Final Product among the Participating Contributing Artists for that Final Product. The Company may create multiple Operating Committees and change the composition of Operating Committees at any time in its sole discretion and without notice to You. You acknowledge and agree that an Operating Committee may be comprised of only one individual.
  4. “Permitted Deductions” will mean and include any and all costs incurred or borne by the Company or its permitted distributors (each, a “Distributor” and, collectively, the “Distributors” ) in connection with the Use of a Final Product, including, by way of example and not limitation, the following costs and expenses, whether incurred by the Company, the Distributor of a Final Product or any third party acting on behalf of the Company or a Distributor:
    1. any and all customary distribution fees;
    2. the direct costs and expenses of distribution and administration throughout the world (including, without limitation, customary costs such as prints, advertising, dubbing and subtitling, and dues and assessments), and all other costs and expenses which Distributor or any third party distributor may be authorized or permitted to deduct and retain under and pursuant to the terms of any distribution agreement with any Distributors of the Final Product;
    3. any production costs incurred by a Distributor to modify, edit, or complete a Final Product, which Distributor in its good faith judgment elects to incur in order to maximize the receipts, distribution, and Use of a Final Product;
    4. with respect to any online advertising, any agency or sales commissions, refunds to advertisers, and fees charged by third party syndication partners;
    5. all sums paid or payable to any actor, writer, producer, manufacturer of sound recording and producing equipment, composer, lyricist, musician, guild, union, labor organization or trustees of any thereof pursuant to the terms of any collective bargaining agreement or otherwise, or any collection society or organization;
    6. any and all other sums expended, or liabilities incurred, directly in connection with the exhibition, distribution, marketing, and Use of the Final Product, including, but not limited to, any use, re-use, sales, VAT or other taxes; and
    7. bad debts.
    Notwithstanding the foregoing examples listed in subsections (1) through (7) above of this Section 2.e.iv, the methodology of calculating and applying deductions is intended to permit the deduction of costs and expenses of distributing and exploiting Final Products only from corresponding gross revenues or, in the case of costs and expenditures allocable to more than one Final Product, in such manner as Company determines in its sole good faith discretion between or among Final Products and, accordingly, no “double deductions” will be taken; provided, however, that in the instance of sub-distribution, both the Distributor and sub-distributor will be entitled to take customary fees. For illustrative purposes only, if a third-party Distributor deducts costs of prints and advertising from the receipts that are tendered to the Company as Gross Receipts, then the Company will not separately deduct such costs and expenses in calculating Adjusted Gross Revenues.
  5. “Compensation” will mean 100% of the Adjusted Gross Revenues.