This article explains how Track & Expenses help music labels recover their expenses, without charging artists more than their share of an expense. To learn more about Proton's Easy Expenses feature, check our full guide here.
How do Track & Release expenses work?
At Proton, when you create a Track Expense or Release Expense, our system will help you recoup each artist's share of the expense. Music labels can't use our system to recoup more than the expense from their artists.
As a label owner, you have a royalty percentage on each track too: as the artists earn royalties and have deductions, you're also earning a share as a label manager during that time. This means you recoup the full amount, as long as you apply the expense to all the artists on your release.
Let's look at a simple example, to learn how it works!
Imagine you have a 1 track release, with 1 original song that has 50% for the original artist and 50% for the label manager.
Now, imagine you put an expense on this track for $100, and apply it to the track & original artist.
Our system will tell you that the artist's share of this expense is $50, since they have 50% share on the track. That means our system will deduct $50 in earnings from this artist on this track, before the artist starts to get paid.
Now, imagine sales have started for this 1 track release and it earns a total of $100 in sales & streams.
Because the artist has a $50 deduction, it means their $50 goes to you instead.
This gets added to your $50 in your own statement as label manager, meaning you've now recouped $100 before the artist gets paid.
Why can't I make the artist pay for the FULL amount of the expense?
In almost every case, it’s not fair. Imagine a release with 10 tracks and the manager spent $10 for cover art. If the first track sells $10 but the others sell nothing, it’s not fair for the artists on the first track to cover the expenses for the other artists.
How can I deduct a specific/exact amount from an artist?
To deduct a specific amount from an artist and have the full amount deducted, you need to create the expense as an Artist Advance instead, which is different than the Track Expense or Release Expense explained in this article.