That means one cent on compilations and coupled works. The more the artist is used to produce income in derivative ways, the more significant the one penny producer share will be. One cent is not an unreasonable royalty even in this situation- Airwindows wishes to take more of a bite in the event that the record company's taking advantage itself. This actually is an incentive for Airwindows to produce 'evergreen' music that will be exploited year after year. Reckoned with normal accounting procedures T his is customarily reckoned twice a year within sixty days after the close of each calendar six-month period.
Some companies use different six-month periods.
The intention is to go along with whatever the company normally does. A gain, the actual amount is negotiable, even in the case of a major label- if the one cent seems outrageous as a royalty, a lesser amount could be agreed on. Labels are a business just as Airwindows is, and have to manage their affairs in their own way. This is simply defining terms under which Airwindows is willing to be part of that process, and again, 'indie' artists own their own masters and pay no royalty even if Airwindows produces their CDs- owning the masters and copyright to the music is the dividing line here.