Are you an overseas musician wanting to come to Australia to perform? Chances are you’ll need a 420 Entertainment Visa.
As a Registered Migration Agent that helps touring musicians and bands secure entertainment visas, we see first-hand that to the
un-initiated, the immigration process can be a slow and confusing maze to navigate. Here is a simple guide on the specific immigration requirements for a 420 Entertainment Visa for musicians.
What scenarios could a 420 Entertainment Visa cover?
The 420 Visa is for entertainers or associated staff coming into Australia for performances, media or film productions. This Visa covers the following types of entertainment:
The key steps to getting an Entertainment visa
Step 1 – Sponsorship form
You will need someone to sponsor you (or your band) during your stay in Australia. Your Sponsor is required to complete and lodge a 1420S form and the fee (currently $420.00). Your Sponsor will need to provide the Immigration Department with details of their financial status or other supporting documentation. The Department will send an approval letter to the Sponsor. If your Sponsor is approved, you may move to Step 2.
Step 2 – Nomination form + sponsor cover letter
Your Sponsor will need to nominate the particular entertainment activity you will be undertaking. Your Sponsor will need to complete and lodge a 1420N Nomination Form and pay the application fee (currently $170.00)
If there are several members in your band wishing to enter Australia, this fee covers every member in the band or crew. Only one nomination fee for the entire band in required.
A letter outlining what the nominated activity will bring as a ”net employment benefit” to the Australian entertainment industry is needed. You will have to to provide evidence of any performing contracts, an itinerary specifying dates and venues of performances and any licences required. As part of the nomination application, you will also be required to consult with the Musician’s Union of Australia (MUS) who will charge you a fee. MUS will need to be provided with:
If you're a DJ the union is the Media and Entertainment Arts Alliance.
Step 3 – Entertainment Visa application
The final step is where the musician will need to complete the 14 page 420 Entertainment Visa application. The lodgement cost is currently $360 per band member.
You will need to include the following in your application:
Are there any additional requirements or documentation I need to provide?
You will need to provide your own health insurance. This can be organised in your home country. After the Department has viewed your application, you may be required to undergo a Health Assessment. This could involve a chest X-ray or other medical examinations. You may also need to provide a police report. However, you will be notified by the Department if you are required to submit more information.
How long can I stay in Australia if I am granted a 420 Visa?
The Department will assess applications on a case-by-case basis. The maximum amount of time you may stay and work in Australia is two years and a Visa will be granted for the specific amount of time you will be performing or working in Australia. For example, if your performance schedule is for three months, you will only be granted a three month entertainment visa.
Can I travel in and out of Australia on my Visa?
Multiple entries in and out of Australia are permitted if the case officer agrees to grant this. Multiple entries can be difficult but not impossible to obtain. It will need to be outlined in your application. The cover letter attached to the nomination form must state why you will need multiple entry rights. It could be as simple as requiring to fly across to New Zealand or for a performance in-between your Australian tour dates.
Can I do any other work whilst I am in Australia?
No, you can only undertake the work or activity that you included in your application.
May I bring family members with me?
Yes, you may. However, if they want to work they will need their own 420 (or other relevant) Visa.
Can a 420 Entertainment Visa application be rejected?
A visa may be rejected for a number of reasons including character and health. Although the Australian government recognises the value of entertainment, overseas acts and film investment, if your application is not done properly it may be rejected or you may have to start the process again.
On a promotional Tour and not "performing"?
What we would apply for is a particular story term business visa.
Feel free to email us if you have a question - email@example.com
The fees listed above are the fees charged by the Department of Immigration. If you are using us or any other qualified agent these fees are in addition. Our fees are fixed from $880 and are guaranteed to beat any other legitimate price of an agent. Why? Because entertainment visas are the only visas we do and we are the number 1 experts in the field in Australia with a 100% success rate and have never missed an agreed deadline.
More about our work for our customers seeking visas is here.
A record deal may seem like the ultimate goal to an artist however all contracts (including record deals) contain a number of details which flow on to affect to what and how an artist actually gets paid. Sometimes a small detail in a recording contract can result in big affects down-the-line for an artist.
Because of this, it's vital to understand all aspects of a deal including royalties (and how they're calculated) and any costs (recoupments or deductions) that will reduce payments to the artist.
In addition, there is a difference between royalties of the recording artist and the royalties of the song writer. Sales of a recorded album or single relate to royalties for the recording artist. Whereas, the songwriter’s royalties ALSO come from public performances (when the song is played on the radio or in restaurants etc). This is often the key driver of why the singer/songwriter is usually able to buy a beach house well before the non-writing drummer in a band.
In the past, record deals have been very complex. Up until recently, my 3 year old had more chance of constructing his own IKEA bed than I had of accurately calculating royalty formulas in some contracts. Thankfully most deals now are more ‘straightforward’. Old formulas still survive and we will look at them in a later article. Let’s look at the more straight forward ones.
Royalty Calculations on record sales
There are many different types of royalties that an artist may receive for their work. Here we deal specifically with record sales.
The royalty payment depends on the math and how the calculation is made. Most record contracts are not straight forward “60/40” or “50/50” split deals. A customary royalty calculation takes into account fixed deductions, taxes, recoupment of expenses, the price of the product, giveaways and in some cases quite a few extras. This is why it’s so important to make sure you understand the royalty terms within a proposed record deal.
Whilst we are using the word “percentage” each royalty percentage is known in the industry as a point. So if the royalty percentage is 15%, it’s a 15 point deal.
Artists are paid royalties based upon a percentage of total record sales and those percentages will differ in each country. In the United States and the United Kingdom, artists will likely have a lesser percentage rate than in Australia. This is solely because of the different size of the market. Your royalty rate will also depend on a number of other things, including the company you’re dealing with and how their deal is structured, how much clout you have, the fine points of the deal and the deductions. You have to look much further than the rate offered.
Let’s say an artist has a 15% royalty rate. This does not mean that for a $20 CD the artist receives $3.00. Even under a basic royalty calculation, the reality is far from it.
There is a variety of different formulas applied. Here is one of the ‘simpler’ calculations we see.
Wholesale Price Calculation
The royalty rate is a percentage of the published price top dealer (PPD) otherwise called the wholesale price. It’s the price that the retailer pays to the record company for the product. Some companies may use the retail price but not many anymore. From the PPD, deduct the GST, that’s because you are never going to receive a royalty on the GST.
Sub total $13.64
Royalty per unit @ 15% $2.05
There you go, you can sign now. You will receive $2.05 for every CD sold. Wrong, if only it was that easy.
Now there are a few deductions that need to be taken into the account before the royalty rate is applied. Packaging is common, and in some cases some other items. Delivery charge deductions are less common nowadays, but can still remain and could be between $0.25 and $0.40 per unit. They could also be applied elsewhere. Look at the deductions carefully as they can make a massive difference to what looks like a generous royalty rate.
An archaic deduction to look out for is in the style of “90% of net sales.” This is the wisdom tooth of the old shellac records sales accounting for an arbitrary 10% breakage rate. They are still found in some contracts. Put a red pen though anything of the sort. The same can be said for any percentage deductions that allow for ‘free’ or ‘promotional goods’ in a contract where the royalties are paid on records “sold.”
An old trick in the industry was to provide retailers with 10%+ of free goods with an order. Because the goods were free they were not “sold” and as such no royalty was paid. Although they may have still been sold by the retailer, they were not sold to the retailer.
There will be a deduction for packaging in most major deals. The theory goes that the artist should only obtain a royalty for the album not the artwork etc. In the past, a common deduction was generally 25%. “Packaging” a digital album and a 10 sleeve physical CD doesn’t cost the same does it? If your contract has a standard percentage deduction for all packaging look at it closely.
Depending on the type or sale/product for deals with packaging deductions you will now may see different rates for difficult products. Whilst deduction rates do vary company to company and deal to deal, below is an example (and just an example):
Physical CD’s, cassettes, Vinyl 20% deduction
DVD’s and Videos 25% deduction
CD’s with more than 4 panel inserts 25% deduction
Records with more than 6 panel inserts 30% deduction
Digital Albums 0% deduction
Anything not covered above 35% deduction
Ultimately, the rate must relate to the royalty percentage. For example there is no use negotiating comparatively low packaging percentage deductions if your royalty rate percentage is also low. Our view is that the packaging deductions should be removed altogether in favour of a lower royalty rate. Some of our clients have done this and some have personally funded any non-standard packaging.
Having now discussed packaging deductions, let’s return to our example (15% royalty on a CD with a PPD price of $15) and apply the above standard CD packaging rate of 20%. Our calculation now looks like this:
Less 20% (CD packaging) ($2.73)
Sub total $10.91
Royalty per unit @ 15% $1.63
So the packaging deduction has reduced the royalty payment from to $2.05 to $1.63. And this is assuming there were no other deductions for delivery.
We said previously there is no such thing as a standard “60/40” or “50/50” split in a deal. They do exist particularly with smaller labels and digital only deals. They may seem simpler and clearer but they are not. A record company and an artist may have a deal that splits the net profits on a 60/40 or 50/50 basis after all expenses are taken care of. In this type of deal, all of the revenue is collected, the direct costs deducted and the “profits split.” These deals need to be looked at a bit more closely. They are easy to manipulate over time and require a constant cross check through the life of a contract.
They work like this: income from sales - the expenses = profit ÷ 50% = your royalty
Simple, No! These deals can be a mine field. The expenses taken into account could be some, all or more of the following;
• Producer’s costs
• Packaging and pressing
• Accounting costs
• Legal costs
• Staff costs (or a percentage of)
• Songwriter’s royalties
• Marketing, advertising, promotion
• Office and administration costs
You need to pay close attention to what is included in these deals such as staff, administration or office costs. There could be a service charge or an hourly rate applied for staff for the company. Likewise what is the marketing allowance and should it be included. Some artists have argued that marketing should come with the costs of doing business. After all, the artist is marketing the album by playing gigs and undertaking press commitments. If it’s a 50/50 deal, should the burden be shared 50/50? However if the company is putting up 100% funds for the album’s recording; production; art work; mastering; marketing and release it may say it is sharing the risk and burden and should equally share in the spoils.
Here, the entire royalty amount is also not likely to be paid in each accounting period. A certain amount may be held back for a period to allow for fluctuations over periods. For example, unsold physical CD’s that could be returned might result in a royalty hold back of say 20%. These split deals are more common in contracts that relate to digital releases only (and independents), because there is less investment required. The reality is that retail physical CD’s are still a major and important source of sales revenue.
And now for recoupments.
So we’ve looked at deductions, royalty calculation methods and split deals. So you can sign now. You will receive $1.63 for every CD sold. Wrong, if only it was that easy. We haven’t even gotten to recoupments. No matter what royalty rate is included in a contract it means nothing if the costs of the album have not been recouped (recoupments) and it is very rare that an artist will receive a cent in royalties until that happens.
You can read more about recoupments in our article: Record deals: how recoupments in recording contracts effect royalty payments from record sales. And make sure you do because they’re easily as important as royalties.
Got a question on an agreement? drop us an email firstname.lastname@example.org
Record deals: how recoupments in recording contracts affect royalty payments made from record sales
A record deal may seem like the Holy Grail to an artist but most record deals contain a number of details which have flow on effects to what and how the artist will actually get paid.
Because the devil can sometimes be found in the detail, a clear understanding of all aspects of a deal is crucial. And this is especially true when it comes to the types of royalties, the way in which royalties on record sales are calculated and any costs which are deducted before any payments are made (i.e. recoupments).
In this article we deal with recoupments.
Before a recording artist receives any royalty payments, they will have to effectively repay various expenses and costs to the record company. These are generally called recoupments.
There are many costs involved in recording and getting an album to market. It is crucial for a recording artist to understand what is recoupable and what effect this will have on any royalty payments. In essence just about everything maybe recoupable. Whilst the growth of digital sales and the decline of physical/retail sales does mean that some of the costs of producing, marketing and distributing an album have reduced, it doesn't change the fact that there are many other costs which still remain and can be recouped (i.e. deducted) from royalty payments. Some examples of other costs include expenses incurred by the record company across publicity, mastering, advertising, marketing, and Artwork. Although every cost is potentially recoupable, in practice not all expenses are recouped under every agreement and by every company, but most expenses and all advances are. The right questions need to be asked and clear exceptions need to be identified during negotiations.
Sample recoupment clauses from “real-life” record contracts
“The advances specified in this agreement, all recording costs, all sums paid to or on behalf of the artist including but not limited to, tour support payments, travel, producers costs (if any), company staff costs directly attributable to the artist or any payments whatsoever (other than royalties, mechanical royalties, Film Costs* and Website Development* and Maintenance Costs*) are an advance against and are to be first deducted from any royalties (other than mechanical royalties) and fees payable under this agreement and no royalties accruing to the Artist’s royalty account from the exploitation of any of the Recordings are payable to the Artist until all advances have been fully recouped in full by the Company.”
This translates to: you don’t get any royalty payments until all the money spent on your album and its promotion has been recovered by the company. The “*” items in this agreement are dealt with in a separate clause limiting the recoupment to 50% which is becoming customary for film and website costs.
“The artist is solely responsible for all the cost and fees involved in the recording, production, manufacture, marketing of any albums, or releases under this agreement and any payments made by the company are fully recoupable by the company before any royalties are paid to the artist.”
This also translates to: until everything has been paid for, there will be no royalty payments or in plain English – there is no such thing as a free lunch.
A simple example of how recoupments affect a royalty payment calculation, based on the following scenario:
• CD sales are at the Australian Gold level (i.e. 35,000 sold)
• The wholesale price of a CD in this example is $15.00 including GST
• Packaging costs are 20%
• Royalties are calculated at 15% of the wholesale price – GST – packaging costs
• Recoupments are $100,000 and this is not a high figure for an album.
The effective calculation to determine what payment would be made to the artist now looks this this:
35,000 sales x $15.00 $525,000
Deduct GST ($47,727.27)
Less 20% CD packaging ($95,454.54)
Sub total $381,818.19
15 point Royalty $57,272.72
Less Recoupments ($ 100,000)
Artist Royalty Payment $ - 42,727.15
In summary, the above is a very basic calculation and in real-world practice these calculations are often more complex but you get the idea…… $525,000 in album sales can diminish very easily, being a gold selling artist doesn't always translate into earning big dollars and when we say it’s crucial you understand the details of your record deal – we mean it.
The example we've used doesn't take into account whether the artist received a cash advance; or whether they need to pay the producer a royalty; their manager a percentage of the earnings (usually around 15%-20%); the session musicians or, in the case of a band, pay the band members. Our example also does not include any of the particularities under 360 or multiple rights deals (we will touch on those in a later article).
As you can see, record deals are not always the holy grail of earning a decent income as a professional musician. Whilst album or record sales do contribute to earnings, in reality many artists find a significant part of their income is earned through performances. And in the cycle of the music business, an active approach to touring and performing can deliver immediate income as well as helping to drive album sales more than any other marketing activity.