Intro to music industry Passman

What are "all-in" royalties?

The artist is responsible for paying the record producer and mixer out of her or his royalties.

What is the term of a management agreement?

Three to Five Years or album cycles (commencement of recording to the end of touring/promotion) w

Your group logo is protected by a.....

Trade mark

What are radio commercial licenses called?

Transcription licenses.

What is the commission for agents?

Usually 10%

What royalty do producers/mixers get?

Usually 3 to 4% of PPD, but some as high as 5 or 6%. Mixers usually get a flat fee but some get .5 or 1%.

When does the job of the business manager for a tour start?

Way before the tour starts, forecasting income and expenses, and projecting how much you're going to make or lose.

What is a conflict of interest?

When a lawyer's clients get into a situation where their interests are adverse.

When can you terminate an agent?

When they haven't gotten you an offer of work for ninety days.

What is an "override"?

When you strike a record deal, you reimburse the funder the cost of the demos and award them a 2 to 2% royalty on your records, known as an override.

What is a double commission?

Where a manager is commissioned at the corporate level and then again at your salary (BAD).

What is a "joint recording"?

Where more than one royalty artist gets together on the same song, such as a duet.

Which is the biggest method of distributing physical records?

Wholesale distributors

What territory will the agent want?

Worldwide.

Can managers get a share in the NET earnings of an artist?

Yes, but then they will ask for limits on expenses.

Are producer royalties recoupable from their advances?

Yes.

Will agencies want to represent you in all areas (film)?

Yes.

Will record companies want the right to operate your fan club or VIP Ticketing?

Yes.

What is a "matching right"?

You can look for another deal but have to let them match it, so the record company has the option to take you on.

A record contract is 'exclusive', meaning....

You can't make records for anybody else.

What is the "right of first refusal"?

You have to give the company that you signed the demo deal with a period of thirty to sixty days to decide whether or not it wants you.

What is the "right of first negotiation"?

You must try and negotiate with the company you struck a demo deal with first. If you can't, they get a matching right to the next company's offer.

Every delivery of music that isn't physical is an.....

"electronic transmission".

What is a "catch -all"?

A phrase that says the writer gets 50% of "all other monies not referred to in this agreement".

What is a "streaming equivalent album"?

Based on a number of streams or dollars equivalent to an album.

What is a record producer responsible for?

Bringing creative product into tangible form, maximizing creative process, administering the whole project (booking studios, musicians, etc.)

What is a "Key Member"?

Certain individuals in a band's record contract, who upon breaking the contract put the whole band in breach.

What should you do before hiring a lawyer?

Check their references

The amount of unrecouped monies is called your...

Deficit or red position.

Which industries fall under the term "electronic transmissions"?

Digital downloads, ringtones, webcasting, subscription services, and podcasting.

What are "retroactive escalations"?

Escalations based on prior sales

What are "prospective escalations"?

Escalations that only apply to sales occurring after the level is reached.

What is the range of fess for independent motion pictures?

Festivals [$500 to $2500] Theaters [$2500 to $7500] This is with the possibility of step deals and kickers

What is the royalty rate for the "rest of the world"?

Generally 50 to 66.6% of the U.S. rate.

What is the royalty rate for the major territories?

Generally 70 to 75% of the U.S. rate

What are promotional (promo) records?

Given to radio-stations, contest giveaways and also do not bear royalties.

When you get to superstar touring you get a...

Guarantee against a percentage of the net profits or gross of the show.

What does the business manager do?

Handles all the money. Collects it, keeps track of it, pays your bills, invests it, makes sure you file tax returns, etc.

What is the term of a record deal?

How long the record company keeps you under an exclusive agreement, historically one year with options.

What do the fees for synch licenses vary with?

How the song is used, which media you want, how long you want to use it, the importance of the song and the songwriter, and whether the exact master is being used.

What is a record?

INcludes both audio-only and audiovisual devices, any other device now or hereafter known that is capable of transmitting sound., any kind of delivery of your performances for consumer use.

For optional albums, you should get.....

Increased royalties and funds.

What are escalations?

Increases in your royalty rate based on sales (typically at steps of .5%)

Which is easier to get, a lawyer or a manager?

Lawyer

What are "blanket licenses"?

Licenses issued by performing rights societies that allow your song to be performed within venues of a certain size.

What is a "term songwriter agreement"?

Like a record deal except that, instead of making records, you agree to give the publisher all the songs you write during the term. Like a bunch of single song agreements hooked togehter.

What is the range of fees for major studio motion pictures?

Main Title [$50,000 to $300,000] End Title [$35,000 to $200,000] In-context Advertising [Usually an extra 10% of the synch fee] Out of context uses [$20,000 to $100,000]

What do you have to do to get a copyright?

Make a tangible copy of your work

What do publishers do to make money in foreign territories?

Make deals with local publishers who collect in each territory on their behalf, called "subpublishers".

What are big-box retailers?

Massive retailers like Walmart, Target, and Best Buy.

What does the company SoundScan do?

Measures how many records are sold at retail.

What do agents do?

Primarily book live personal appearances (Mostly concerts).

What is the "right of termination"?

Provisions that say that even if you make a bad deal, you get a second shot thirty-five years later.

When a copyright expires, the work goes into the .....

Public Domain (p.d.)

What are controlled composition clauses?

Put a limit on how much the company has to pay for each controlled composition (A song that's written owned, or controlled by the artist).

Why are lawyers particularly important?

Record companies cannot ignore important lawyers, nor can most anyone else.

What constitutes "commercially satisfactory" recordings?

Recordings the record company believes will sell.

The process of keeping money to recover an advance is called......

Recoupment. An advance is 'recoupable' from royalties.

What are the royalties you get from retail merch?

Retail sales [15 to 25%] Internet Sales [25 to 35%]

What is the legal definition of copyright?

"A limited duration monopoly".

What is the term for an agent?

1 to 3 years typically.

What are the major divisions of a typical record company and what do they do?

1. A&R: People who find and nurture new talent. 2. Sales: People who get your records into the stores and onto digital sites 3. Marketing: Advertising, publicity, album-cover artwork, promotional videos, web campaigns, promo merch, etc. 4. Promotion: Get your records played on the radio 5. Product Management: In charge of whipping all the other departments together to work on your records 6. Catalog/synch: Marketing department for older product and who try and get recordings onto tv/movie/commercials 7. Production: Manufacturing, cover printing, assembling, and shipping physical product to the distributors 8. Finance: Computing and paying your royalties and keeping track of the company's income and expenses. 9. Business Affairs/Legal: Responsible for the company's contracts. 10. International: Coordinates the release of your records across the world.

What did the Sonny Bono Copyright Term Extension Act do?

1. Added twenty more years to the term of a copyright (life plus 70 and ninety-five years from publication) 2. Established the "rule of the shorter term" (meaning that wherever the copyright disappears first, at that time, it disappears everywhere) 3. Gave libraries and archives the right to make copies of works during their last twenty years of protection 4. Created a new termination of transfer right 5. Revised how films and television use music

What exclusive rights do you get under copyright?

1. Reproduce the work 2. DIstribute copies of the work 3. Perform the work publicly 4. Make a derivative work 5. Display the work publicly

What are the other delivery criteria?

1. Studio recordings 2. Recorded during the term 3. Songs not previously recorded by you 4. Recordings that feature only your performance 5. Not wholly instrumental sections (unless you are an instrumentalist) 6. Material that doesn't cause the company any legal hassles 7. Songs of a minimum playing time 8. All legal rights for your record

What did the Digital Performance Right in Sound Recordings Act of 1995 do?

1. The act extended the compulsory mechanical copyright license to include the digital distribution of records. 2. It created a right for the artist and record company to be paid when records are performed.

What is the traditional split between writer and publisher?

50/50

What are gold, platinum, and multi-platinum albums'?

500,000+ sales - Gold 1,000,000+ sales - Platinum 2,000,000+ - Multi-Platinum (CD, Vinyl, permanent album download)

What do record companies get for "on-demand streaming deals"?

60% of ad revenue and/or subscription fees, pro-rated for each master based on the number of plays.

What does the record company get for video streaming deals?

70% of ad revenue

What do the record companies get for permanent downloads?

70% of retail price.

What is the royalty rate for Canada?

85% of the U.S. rate

What is the usual split for superstars?

90/10 85/15, both towards artist.

What are pending and unmatched monies (P & U)?

A chunk of monies sitting with digital service providers, who are holding this money because they don't know whom to pay.

What is a "Controlled Composition Clause"?

A clause that limits how much you get paid as a songwriter.

What is a Key Man Clause?

A clause that says the person with whom you have a relationship at a label (key man) must personally act as your manager and if not, you can terminate the deal.

What is a "re-recording restriction"?

A clause that states you can't re-record any song you recorded during the term of a deal for a certain period of time after the term (usually five years).

What does it mean to have your monies be computed "at source".

A common stipulation in subpublishing agreements, this means the percentage remitted to you must be based on the earnings in the country where earned, which is the source.

What is a "collection deal"?

A deal with no advance, meaning the subpublisher merely collects on behalf of the U.S. publisher.

What is an "inducement letter" or "side letter"?

A piece of paper that says if your corporation doesn't deliver your recordings to your record company that you will deliver them directly.

How long does a typical album take to make?

A quick can be made in 6 weeks, but typically 3 to 4 months and as long as a year or more.

What are "funds"?

A set amount of money which includes both recording costs and any amounts that may be payable to the arist as an advance.

What is the gate?

A share of the money charged for admission often split between the venue and the artist.

What is a "floor"?

A stipulation in the formula that states that no matter how lousy the earnings of the previous album, your fund will not be less than an agreed amount.

What is a "ceiling"?

A stipulation in the formula that states that no matter how wildly successful the prior album, the fund won't exceed an agreed dollar figure.

What is a "subfloor"?

A stipulation in the formula that states that you get the formula advance, less any unrecouped amount, but not less than the subfloor.

What is a "work for hire"?

A work for hire is when you hire someone else to create for you. The employer then becomes the author insofar as copyright law is concerned.

What happens if your record is not "commercially satisfactory"?

A. They send you back to the studio B. They find you in breach of your contract and terminate the deal

What unions are agents regulated by?

AFM (American Federation of Musicians) for musicians and SAG-AFTRA (Screen Actors Guild - American Federation of Television and Radio Artists) for vocalists and actors.

What are the major performing rights organizations?

ASCAP (American Society of Composers, Authors, and Publishers) BMI (Broadcast Music, Incorporated) & SESAC

What are "optional" albums?

Albums the company can choose to have you commit to, as opposed to firm albums that you both are committed to.

What do "sunset clauses" refer to?

Monies paid to manager after the term. This means 1. Records made during the term 2. Records made on a contract signed during the term.

What is "tour support"?

Monies that record companies give you to make up tour losses, defined as the actual amount of your loss. (100% recoupable)

Should there be double commission if you have a corporation?

NO

Does a business manager need credentials to be a business manager?

NO! (watch out)

When is the time to make an internal band agreement?

NOW

What are the ranges of royalties for the different levels of artists?

New Artist: 13 to 16% of PPD Midlevel: 15 to 18% of PPD Superstar: 18 to 20% of PPD

Where are almost all of the major players in the music industry located?

New York, Los Angeles, and Nashville

Should agents get a piece of the recording/songwriting income?

No, they don't work in this area.

Does everyone's control/percentages have to equal in a band?

No.

Should your royalty rate be reduced on digital downloads?

No.

Should you invite family members on you team?

No. Just don't.

Are non-paying attendees counted for a per-head merch computation?

No. Only paid attendees. (Merch Sold/Number of paying heads)

Advances are...

Nonreturnable (i.e. totally at the record company's risk)

What is the term of most merch agreements?

One album cycle or until the advance is recouped

How are producer royalties paid?

Paid on all records sold (record one royalties). Only paid after recording is recouped at net rate (Gross - Recording costs - producer royalty) and then is paid on every record sole (retroactive to record one). Alternatively, producers can be paid on records recouped at the "all-in" rate, but only on records sold thereafter (not retroactive to record one)

Where are the majority of publishing incomes today?

Performance monies, followed by mechanicals and then sync licenses.

Who is the first person on your team that you hire?

Personal Manager

Who is the most important person in your professional life?

Personal Manager

Historically, the artist royalty was a percentage of the .......

SRLP (Suggested retail list price), the price received by the retailer. Deducted then by a packing charge (25%). The result would be a "base price" or "royalty base". This is the figure against which you applied your royalty percentage.

What is merchandising?

Selling products with your name or likeness on it

Your group name is protected by a.....

Service mark

What are SKUs?

Shop Keeping Unit, a bar code for each version of a master, to keep track of who gets paid.

What is a "funder"?

Someone outside of a record label willing to finance your demos/first album.

What is a joint work?

Something created by the efforts of two or more people.

What is a "licensee"?

Somone who signs a license agreement with a record company, which allows them to manufacture and distribute records.

What are "outside songs"?

Songs that aren't controlled compositions.

Who are the major distributors?

Sony, Universal, and WEA.

What is the fastest growing area of the business?

Streaming(after vinyl, of course).

What do attorneys do in the music industry?

Structure deals, look at contracts, shape artist's business lives, advise clients about the law.

What is tour merchandising?

Stuff sold at concert venues

What is retail merchandising?

Stuff sold everywhere EXCEPT concerts.

Retail merchandisers are only apparel merchandisers so they...

Sublicense the rights to your merch to smaller merchandisers.

Who pays the producer?

Technically the artist, but anybody worth their salt will make sure the record company is actually the one responsible.

Over-the air radio broadcasts are also called....

Terrestrial broadcasts

How record royalties work?

The artist turns over recordings to the record company who then sells the finished product. For each record sold, the artist gets a piece of the price and the company keeps the rest to cover its costs and make a profit.

Are options good for the label or the artist.

The artist.

Who hires the producer?

The artist.

What is a "360 deal"?

The company gets a piece of an artist's earnings from touring, songwriting, merchandising, fan clubs, sponsorship money, motion picture acting, garage sales, and so forth.

What is an advance?

The company pays a sum of money to the artist and then keeps the artist's royalties until it gets its money back.

What is the "territory" of your recording agreement?

The countries where the company can exclusively sell your records (almost always worldwide).

Who are "promoters"?

The people who hire you, rent the hall, advertise the event, etc.

What is a "right of first negotiation"?

You talk to the company you struck a deal with first before you make a publishing or merchandising deal elsewhere.

What does the term "most favored nations" refer to?

You will be paid the same as every song on a program no matter what.

Who controls your website?

Your label

What is your group's most important asset?

Your name.

What are streaming royalties based on?

Your royalty percentage times the company's receipts attributable to your streams

What does the term "delivery" refer to?

a) You have to deliver a bunch of things along with the album (artwork, licenses, etc.) b) The company has to accept the recordings as complying with your deal

Who is the biggest retailer of music in the U.S.?

iTunes

Non-featured performances on other people's records are known as...

sideman performances

What are the three parts to a publishing team?

1. An administrator to take care of registering copyrights, issuing licenses, collecting money, etc. 2. A "song plugger" who runs around and convinces people to use their songs. 3. A creative staff person who finds writers, works with them to improve their songs, pairs them with co-writers, etc.

What can you exclude from a managers commission?

1. Areas where you are already established or that they do no work in 2. Money-losing tours 3. Recording Costs 4. Monies paid to a producer 5. Co-writers 6. Tour Support 7. Costs of Collection 8. Sound and Lights 9. Opening Acts 10. Any entities the manager has a share in

What is the criteria for royalties to be distributed in the U.S.?

1. CD/Digital download sold in the U.S. 2. Sale is: -At full price -Through normal retail channels -By the company's normal distribution channels These sales are United States normal retail sales (USNRC)

What are the 5 instances of compulsory licenses?

1. Cable television rebroadcast 2. Public Broadcasting System 3. Jukeboxes 4. Digital performance of records 5. Phonorecords and digital downloads of non-dramatic musical compositions (compulsory mechanical license)

What should you put in a production agreement?

1. Clause that states the production company must distribute your records and within a given period of time. 2. Company must enter an agreement with a major distributor

What are the three levels of artwork involvement as an artist?

1. Consultation 2. Approval 3. Creation

What are the three sources record companies will want to take from to recoup your royalties?

1. Current albums budget 2. Your mechanical royalties 3. The next album's budget

What is involved in the attorney checklist?

1. Do they have experience in the music business? 2. What kinds of deals have they done? 3. What do they charge? 4. Do they have a written fee agreement? 5. Do they object to having the fee agreement reviewed by an independent advisor (they shouldn't)? 6. Ask for references. 7. Do they have or foresee any conflicts of interest?

What can you exclude from an agents commission?

1. Earnings from records and songwriting (even soundtrack albums) 2. Commercials, book publishing, merchandising, record producing. 3. Costs of collection.

What are the two major organizations issuing mechanical licenses for publishers?

1. Harry Fox Agency 2. Canadian Musical Reproduction Rights Agency

What does a personal manager do?

1. Helps with major business decisions 2. Helps with creative process 3. Promotes career 4. Assembles and heads your professional team 5. Coordinates your concert tours 6. Haggles your record company 7. Buffer between you and the outside world

What are your choices when your lawyer has a conflict of interest?

1. Hire another lawyer 2. Waive (choose to ignore) the conflict

How are lawyers typically paid?

1. Hourly ($250 to $700) 2. Percentage (usually 5% but sometimes 10%) 3. Value billing (Hour rate with a retainer (set monthly fee, based on deals made during the month).

What did the DART bill of 1992 do?

1. It said that consumers who copy records at home for their private, non-commercial use are not committing copyright infringement. 2. It imposed a tax on digital audio recorders and digital audiotapes.

What are the 4 types of publishers?

1. Major Publishers (Sony/ATV/EMI/Warner/Chappell) 2. Major Affiliates; full staffs of professionals whose administration is handled by a major 3. Stand-Alones; a company that's not affiliated with a major and does its own administration 4. Writer-Publisher; Writers who keep their own publishing, typically writer/artists

What are the other four types of managers?

1. Major manager with young associate genuinely enthusiastic about your career. 2. Enthusiastic mid-size manager 3. A major, powerful manager who is taking you on as a favor 4. A young, inexperienced manager willing to die for you (advisable)

What are the two main types of independent record companies?

1. Major-Distributed Independent: Little or no staff but signs artists and makes a deal with a major label to perform all functions expect recording the records. 2. True Independent: NOt owned by a major label, but is financed by its owners and/or investors. Some major labels have different sales staff for indie product.

What are the three broad levels of artists?

1. New Artist (Never had a record deal, never sold more than 100,000 records) 2. Midlevel Artist or Buzz Artists (Sold 200,000 to 400,000 or a new artist with a lot of "buzz") 3. Superstar (750,000+ sales)

What are the rough ranges of funds?

1. New Artist Signing to Independent [0 to $100,000] 2. New Artist Signing to Major [Rock, $100,000 to $200,00. Urban/Hip-Hop, $500,000 or so] 3. Midlevel [$300,000 to $750,000] 4. Superstar [$1,000,000]

What are the levels of advances for urban/pop producers?

1. New Producers [0 to $10,000 per master] 2. Midlevel [$40,000 to $50,000 per master] 3. Superstar [$75,000 to $100,000+ per master]

What are the levels of advances for rock producers?

1. New Producers [0 to $7500 per master; 0 to $30,000 for a full album] 2. Midlevel [$10,000 to $15,000 per master; $30,000 to $50,000 for the entire album] 3. Superstar [$25,000+ per track; $150,000 to $200,000 for the entire album]

What are the three types of streaming?

1. Non-interactive streaming 2. On-demand streaming of audio/video 3. Broadcast of your concerts on the Internet

What constitutes a work as copyrightable?

1. Original 2. Of sufficient creativity to constitute a work

What are the two types of Digital Downloads (DPDs?)

1. Permanent download 2. Tether download (streaming services.)

Who are the major players on your professional team?

1. Personal Manager 2. Business Manager 3. Agent/Agency 4. Attourney

What are the two ways in which record companies limit mechanical royalties?

1. Rate per song (75 to 50% of statutory rate) 2. Rate per Album/EP/Single (Limit of ten or so times the single song rate for each album, five times for an EP, and two times for a single)

How are artist royalties computed?

1. The artist royalty is a percentage of the wholesale price or PPD (Published Price to Dealers). Each royalty percentage is known as a point. 2. Multiply your royalty percentage ties the wholesale price to get your royalty.

What does the word 'master' mean?

1. The original recording made in the studio, mixed and with added effects 2. The recording of one particular song (also called 'cuts)

What are the conditions on which sideman performances are allowed?

1. The performance must be background 2. Your record company must get a "courtesy credit" 3. You can't violate your re-recording restriction 4. If you're in a group, no more than two of you can perform together on any particular session

What are the five stipulations for a compulsory mechanical license?

1. The song is a non-dramatic musical work 2. It has been previously recorded 3. The previous recording has been distributed publicly in phonorecords 4. The new recording doesn't change the basic melody or fundamental character of the song 5. The new recording is only used in phonorecords.

What are the two kinds of merchandising?

1. Tour Merchandising 2. Retail Merchandising

What does the personal manager oversee on tour?

1. Transportation of people and equipment 2. Overseeing rehearsals, hiring band members 3. Hiring and functioning crews 4. Booking Hotels 5. Collecting money on the road 6. Dealing with promoters 7. Coordinating everything else

What are the attributes of the "ideal" manager?

1. Well-connected 2. Powerful 3. Wildly Enthusiastic 4. Willing to commit time to your career

What should you ask your business manager before hiring them?

1. What kinds of financial reports will you receive and how often (monthly)? 2. What is the business manager's investment philosophy? 3. Are they a CPA (Certified Public Accountant?) 4. How much do they charge? 5. What will they do besides paying your bills and keeping track of your income? 6. Do they have a dedicated tax staff? 7. What security systems do they have in place to safeguard the money? 8. Does the business manager want a written agreement? 9. Does the business manager specifically represent music clients? 10. Have they handled people with your particular problems and challenges? 11. Do they have E&O(Errors and Omissions) Insurance? 12. Do they have international experience? 13. Do they get referral fees? 14. What is their check-signing procedure? 15. Will the business manager object to you auditing them? (They shouldn't) 16. Be sure that they want to educate you along the way.

What are the 4 main methods by which physical records are distributed?

1. Wholesale distribution entities 2. One stops 3. Rack jobbers 4. Licenses

What are some contractual soundtrack exclusions you can negotiate with your record company?

1. You can't perform on more than one selections for the album 2. You can't do recordings for more than one soundtrack release during any one year. 3. You must not be late on your delivery 4. All royalties and advances must be paid to your record company. 5. You must get the right to use the recording on one of your albums

What are some characteristics of signing to a true independent?

1. You get less of an advance and as few firm albums (options as well) as possible 2. For a small advance, you can get 50% of the profits instead 3. Most indie labels don't have operations overseas 4. Most independents want 360 or at least publishing rights.

What happens when you make a deal with a record company?

1. You give up control of your recordings. 2. You give up a chunk of your income from both record and non-record areas.

What percentage do record companies get from a 360 deal?

10 to 35% of non-record income, usually 15 to 30%. Can also vary by category.

What is a manager's standard commission?

15 to 20% of GROSS earnings, but sometimes as low as 10.

If you write every song with someone else and you are in a deal for 12 songs, how many songs must you turn in?

24

Most publishers require you deliver ....% or more rights to each song you turn in

25

What and to whom to the record companies pay per-record union charges.

4.2 cents per physical (excluding the first 25,000 units) for worldwide sales during the first five years after the release of the album

What is cross-collateralization?

A concept built into every deal, a deficit is recouped from all the earnings across all your albums. This can apply to multiple agreements (BUT IS NOT GOOD FOR THE ARTIST)

What is a "loan-out corporation"?

A corporation that enters into deals and "loans" your services to others for recording, concerts, etc. Can shield you from liability if you get sued.

What are "demo deals"?

A deal in which the record company spends some money (~$10,000) for you to go into the studio and make demos, less than a full-fledged master that gives the company an idea of what you will sound like. If the company likes your demo, they will sign you from there.

What is "Intent To Use"?

A federal service mark application used to stop others who may use the name before you do.

If you are a producer and want SoundExchange monies, what must you send an artist?

A letter of direction (L.O.D.)

What is a synchronization (synch) license?

A license to use music in "time synchronization" with visual images.

What is a "formula"?

A mechanism for advances designed to automatically increase (or decrease) your deal if you're successful (or a flop.) Your advance for the second album is equal to a percentage of all royalties EARNED by the first album.

What is a passive v. active interest?

A passive interest means the company has no control over the rights involved. An active interest means the company takes some of the rights involved.

What is a hall fee?

A percentage charged by the venue to sell merchandise there, usually around 30% of gross merch monies

What are the advantages/disadvantages of having two separate recording agreements for North American and the rest of the world?

Advantages: 1. The two territories aren't cross-collateralized 2. You can always get a higher royalty outside North America Disadvantages: 1. The advances may be lower 2. It's a pain to deal with two record companies

What does a "cap" refer to?

All controlled composition clauses impose a limit on the total mechanicals for each album, usually ten times 75% of the statutory rate (the ten times rate).

What is a "per-subscriber minimum"?

Also called a "per-sub minimum", means the record company will get a certain amount for each of the DSP's subscribers.

What are free goods?

Also known as 'special campaign free goods', these are a discount of the price and they don't bear royalties. (Nonexistent for digital)

What is a limited liability company?

Also known as an LLC, this is a partnership with the limited liability of a corporation, the main partnership for many bands and artists.

What are deposits?

Amounts paid in advance by the promoters to guarantee your performance.

What is a "self-contained artist"?

An artist that writes and records their own songs.

What is a distributor?

An entity that sells physical copies of your records to the stores and distributes your music digitally.

What are some major issues in a partnership agreement?

Firing Hiring Quitting Incurring Expenses Contributions Amendment of Partnership Agreement Death or Disability Ex-Partners

What is a "pro-rata" royalty?

If there are ten cuts on the album and you did one of them, you get one-tenth of your normal royalty.

What is a Track Equivalent Album (TEA)?

If you sell a certain number of single tracks, it will count as the sale of one album for the purposes of your royalty escalations. (Usually equal to the number of tracks on your album)

What is a compulsory license?

It means that you MUST issue a license to someone who wants to use your work if it is under certain stipulations.

What are mandatory mechanical rights collection societies?

Mechanical rights collection organizations that most governments own that license all musical compositions used by any record company in that territory.

Merchandising at concerts and retail is handled by licensing the right to use your name and likeness to a.....

Merchandiser

What is an "administration agreement"?

Merely giving someone the rights to administer your song.

What are "mechanical royalties"?

Monies paid to copyright owners for the manufacture and distribution of records.

Who certifies record sales figures?

The RIAA (Recording Industry Association of America).

What are the other "major" territories?

The UK, Australia, Italy, Japan, Holland, Germany, and France

Who is responsible for collecting deposits?

The agent.

What is the "net rate"?

The all-in rate minus the amount paid to the producers and mixers.

What is the "statutory rate"?

The fee paid per record to the copyright office for using a compulsory license. Currently 9.1 cents or 1.75 cents per minute of playing time, whichever is larger.

What is metadata?

The information that tells the user the name of the song, artist, album, who to pay, etc.

What is a "first use"?

The law allowing the owner to control who gets to use a song for the first time.

What is power of attorney?

The legal ability to act for you, like the right to sign your name to contracts, hire and fire your other representatives, approve use of your name and likeness, cash your checks, etc.

What is union scale?

The minimum amount a union requires everyone to pay its members. Paid to you and others to perform at recording sessions.

What are venues?

The physical buildings where concerts are performed.

What does "coupling" refer to?

The practice of putting your performances on records with performances of other artists.

What is the '100% return privilege'?

The principle physical records are sold on, meaning that is a retailer doesn't sell a portion of the records they buy, they can ship them back to the label and get credit or a refund.

What does "breakage" refer to?

The record companies ask for advances against their streaming income, also getting stock in the DSP.

What 'reserves' for a label?

The record companies keep a portion of the royalties that would otherwise be payable to the artist until they know whether the sales to the retailer are final.

What are "development deals"?

The record company spends ~$50,000 or so to record a few masters and then based off those masters will decide to record you or not. The recording contract here is prenegotiated.

What is a "pay-or-play" provision?

The record company, upon signing you, has the option to either allow your music to be released or to pay you off. After this, the deal is over.

Who bears any union payment on the sales of your records?

The record company.

What constitutes "technically satisfactory" recordings?

The record is technically well made, very rarely will a record be in breach of this.

What are "administration rights"?

The rights of the publisher which include finding users, issuing licenses, collecting money, and paying the writer. Typically in exchange for the copyrights.

What are "mechanical rights"?

The rights to reproduce songs in records.

What is 'franchising'?

The union regulation of agencies, only allowing union members to be represented by 'franchised' agents.

What do a rockstar and neurosurgeon have in common?

They both can soar to the top without any business expertise.

What does the term "ratable" refer to?

They have to pay you an equal amount each time.

What is a "guaranteed release" clause?

This clause lets you get out of a deal if the record company won't release your record.

Can you get advances on merchandise?

Yes but it might be returnable (meaning you have to pay them back).