Music as a Business LACC
The playlists of radio stations with oldies formats are not tracked closely throughout the music industry.
True
The word payola in the music business refers to _____.
bribes
Entities that place their own shelving in stores and continuously stock those shelves (thus, relieving the host store of dealing with this activity) are known as ______.
rack jobbers
Radio outlets whose song playlists are closely watched by trade papers, electronic song tracking services, and tip sheets are called _____ stations.
reporting
Most artist management contracts require a manager to loan the artist money under what circumstances?
under no circumstances
As a rule of thumb, what percent of revenues do streaming platforms pay for all rights to music?
70%
DIY artists must find a label to be featured on Spotify or Pandora.
False
In New York, most personal managers must be licensed by the state as booking agents.
False
Streams are easy for consumers to share and duplicate.
False
The "S" in SWOT stands for supply.
False
The best way for a client to avoid paying an unreasonable legal bill is to discharge the lawyer.
False
The rise of digital technology has reduced opportunities for small businesses in the music industry.
False
The technique used to secure journalists to post content about a company and its products at a negotiable charge is known as publicity.
False
To prevent being ensnared in antipayola regulations, record labels no longer include swag in electronic press kits.
False
When the label and retailer join forces in the placement of paid advertising, the joint effort is known as push-through advertising.
False
What does the "W" stand for in a SWOT analysis?
Weaknesses
A common method of settling disputes surrounding artist management contracts is to submit the issues to arbitration.
True
A hidden force in the marketplace is minimum advertising pricing where retailers agree not to market music lower than a specified floor price.
True
A sole proprietor owner is usually held personally responsible for losses at the business, which means the owner's own possessions are at legal risk.
True
All resumes should be sent out with an accompanying cover letter asking for an interview or an audition.
True
ArtistShare and PledgeMusic are among the crowd funding portals that focus almost exclusively on music.
True
Authoritarian leaders like to make all the decisions themselves.
True
Because companies face a myriad of problems, the best positioning for an applicant is to present himself or herself as a solution for the company's problems.
True
Because the music industry is fussy about copyrights, using third-party content in promotion materials of a startup music company without the expressed permission of the content's owner is fraught with risk.
True
Billing refers to the size, emphasis, and position of names in print ads, billboards, and screen credits.
True
Building a network of contacts is important because many career possibilities are never advertised.
True
Classical musicians are redefining performance careers by working as independent contractors.
True
Kickstarter - which is the best known crowd funder - takes a 5% cut of funds raised.
True
Labels sometimes have revenue-sharing deals for ads placed around their "editorial" content.
True
Limited partnerships are composed of one or more general partners and one or more limited partners.
True
On-demand music streaming permits listeners to individually select titles.
True
Sales and promotion tools help artists decide how to connect online with fans and potential fans.
True
Social networking sites like LinkedIn and Facebook can become vital tools in a job search.
True
SoundCloud is the streaming service most identified with discovering new music.
True
Spotify reported their ad-supported subscribers generated only a 10% gross profit in 2017.
True
Streaming platforms license master recordings.
True
The easiest way to acquire copyrights is to write your own original music.
True
The music streaming business is still a long way from maturity.
True
The type of financing that solicits fans and other outsiders to make small contributions to fund a DIY album is known as crowdfunding.
True
There is a cap imposed by the artist on the manager on the level of expense that may be incurred without the artist's consent.
True
Venture capitalists are pure financial entities that may focus on specific business sectors to exploit the investor's particular expertise.
True
What accounting method provides a snapshot of finances with what's in the pipeline - both what is owed but not yet paid out and what is due to come in but hasn't yet arrived - versus the cash method that doesn't account for any transaction that isn't completed?
accrual
Which is NOT an important social media website today where fans sound off about music preferences? a.) Facebook b.) Twitter c.) Tumblr d.) Billboard
d.) Billboard
Which situation would be the most ethically dubious? a.) Personal manager is also a licensed attorney b.) Licensed attorney is also a personal manager c.) Personal manager has an interest in an artist-owned publishing company d.) Lawyer represents artist in negotiation with company that they have an ownership interest in.
d.) Lawyer represents artist in negotiation with company that they have an ownership interest in.
What type of stream involves serving music up blindly (users can't select specific tunes), but keeping the flow of music in a user-directed genre?
noninteractive
What percent of the music artist's gross income from work generated by the agency or otherwise eligible for commission do national booking agencies generally take?
10%
______ services are responsible for such projects as cover art and promotional one-sheets.
Creative
Labels typically outsource promotion effort.
False
Streamed music is never actually stored on consumer devices for playback.
False
"Synchronization," refers to the pairing of music and picture, mainly in the form of film and television.
True
Large, full-service booking agencies concentrate concentrate on representing acts at all levels, including unknown artists, that regularly appear in venues and towns of all sizes, thus being able to "fully serve" the industry.
False
Personal managers, as the name implies, are primarily responsible for the personal well-being of their clients, leaving most business decisions to attorneys and booking agents.
False
A "sunset clause" in an artist management contract provides a roadmap for an orderly de-escelation of the financial obligations between the artist and manager.
True
An unestablished artist needs a personal manager about the time the performer can earn more than union scale.
True
With the rise of concert tours as an income source, road managers handle all logistics of the touring.
True
For on-demand interactive, a behemoth in the free-with-advertising category is ______, which can be considered a sprawling video jukebox but without the need to insert a coin to play a specific song.
Youtube
Which company created an online store, which launched in 2003, that gave an early lift to online music with simple pricing for many singles, a closed ecosystem so music could not easily be pirated, and a vast base of portable players?
Apple
According to the representative organizational structure illustrated in your text, if a dispute arises who generally has the ultimate authority for decisions for a major act?
Artist
Audio-visual productions utilizing synch music are declining and aggregate payments are shrinking.
False
Talent agents or booking agents typically engage musical artists for what kind of work?
Concert or club dates
Because of partnership agreements, it's rare for partners to get into disputes about how to run the business.
False
A typical "key man" provision in a personal management contract protects the manager from the lack of performance by the "key man" in the deal, who is the artist.
False
Advertising involves getting local or specialty media interested in the company's "story", without having to pay them to print it.
False
Artists generally find termination of financial obligations to departing managers relatively simple.
False
Which clause gives the artist the right to terminate the agreement if a specific agent is no longer with the agency?
Key man
A lawyer who is said to "participate" in a deal has what role?
Receives a percentage of the deal value as a fee
If the streamer is a noninteractive platform, who typically handles the royalty collections for masters?
SoundExchange
Which streaming service has the highest number of audio tracks?
Soundcloud
Which is NOT one of the Web-based tool categories for independent artists? a.) sales/promotion b.) grant funding c.) finance d.) live touring
b.) grant funding
What is NOT a reasonable and useful investment for a beginning DIY artist? a.) buy a high quality video camera for $2,000 b.) spend $18,000 to start an in-house music publishing company c.) purchase comprehensive computer-recording system for $5,000 d.) download free graphics/word processing/website-creation software
b.) spend $18,000 to start an in-house music publishing company
Raising funds by soliciting fans and complete strangers online to finance an album project is feasible today because of which development in music industry economics? a.) Major labels no longer sign any new artists b.) There are major cost savings from using electronic as opposed to acoustic instruments. c.) The costs for recording music have been drastically reduced. d.) The costs for mass duplicating CDs have been drastically reduced.
c.) The costs for recording music have been drastically reduced.
The starting point for an entrepreneur launching a business is a written document called a business plan that contains these points except which one? a.) resources needed b.) explanation of how profits will be made c.) articles of incorporation d.) identifying what might go wrong
c.) articles of incorporation
While revenue from the DIY model might seem very attractive at first glance, artists should keep in mind their direct income could reasonably be reduced by expenses for all except which expense item? a.) attorney b.) management c.) synch fees d.) producer
c.) synch fees
Which report shows the cash and cash equivalent entering and leaving a company over a specified period of time?
cash flow statement
Funding middlemen that demand upfront cash payments for crowd or other types of funding is usually a safe bet, because once they've been paid, they are required to deliver.
False
In building a network of contacts, only persons of high influence are worth cultivating, not peers or lower.
False
In interviews, it is wise to bring up negatives voluntarily, such as saying you left previous employment because "I didn't like the boss."
False
Streamers are prohibited from offering fractional ownership in themselves in addition to usual cash payments.
False
The acronym DIY stands for do it yourself.
True
Who is in the best position to handle the money if an act generates large sums?
business manager
Key players who help devise the marketing plan for release of a music album may include all of the following except _____. a.) promoters b.) advertising managers c.) publicists d.) album mixers
d.) album mixers
Many consider synchronized placement to be the new radio for _____, who are all but shut out of terrestrial hit radio rotation. a.) political activists b.) infomercials c.) podcasts d.) independent artists
d.) independent artists
Contracts must specify under what conditions audits can be performed and precisely who will be liable for the auditing expense.
True
DIY artists benefit from promoting their live performances via online platforms.
True
During streaming, if packets don't arrive in time or aren't processed quickly, the stream freezes until the data flow catches up, at which time playback resumes.
True
It was estimated that 60% of fans downloading the Radiohead release "In Rainbows" from the band's website paid nothing for the download.
True
Most company failures stem ultimately from poor management and not other issues such as marketplace conditions.
True
Most music-related professionals pursue "combination careers" where they work two jobs, such as the instrumentalist that teaches on the side.
True
Music industry executives particularly dislike advertising-supported streaming - the "free" option - feeling it generates inadequate compensation and devalues music in the eyes of the consumers.
True
Negative tour support is the money the labels has advanced to make up for financial deficits the artist incurs while on tour.
True
Not only does a corporate enterprise pay corporate taxes, but the investors also pay personal income taxes on dividends received from the corporation.
True
The aptitude tests that employment counselors administer to job seekers are useful for self-evaluation and to help job seekers find themselves.
True
The artist generally appoints a manager as his or her exclusive personal manager, while the manager's services to the artist are nonexclusive.
True
The bulk of streaming royalty revenue goes to performers and labels.
True
The business model of giving away recorded music and letting consumers decide how and when to pay for it is called freemium.
True
The general self-appraisal test in your text indicates that factors such as "need for audience approval" and "importance of money" should be considered.
True
The going rate for a personal manager's commission is usually in the range of 10% to 25%
True
The lower capital and overhead costs of the new economic order enables artists to sell their music for less yet retain a higher percentage of the revenues.
True
Typically an artist seeks a term of no more than two years for the initial term of a personal management contract.
True
What social media website was a major hub for consumers talking with peers about music preferences, but suffered a severe decline after peaking around 2008? a.) Myspace b.) Facebook c.) Google 360 d.) Twitter
a.) Myspace
Which is NOT among the basic types of structures to first launch a business? a.) public organization b.) corporations c.) sole proprietorships d.) partnerships
a.) public organization
Fanzines have relatively small circulations but are sought after publicity placements in music marketing because _____. a.) their audiences are proactive consumers b.) they are easy to find in the media landscape c.) of the frequency of their publication d.) music TV producers read them
a.) their audiences are proactive consumers
In addition to the personal manager, who should approve of the selection of a business manager, accountant, or auditor?
artist
Email mailing lists are most useful in marketing recorded music when assembled by the ______.
artist and record label
The marketing metric for subscriber loss is called ______, which is the percentage of cancelled accounts in a period - usually monthly.
churn
Which is NOT a drawback of using the corporation structure for a business? a.) complicated b.) expensive c.) double taxation d.) margin calls
d.) margin calls
A balance sheet that presents a company's financial position does not contain entries for ______. a.) assets b.) liabilities c.) equity d.) net profit
d.) net profit
Which report shows financial transactions over a specified period of time in terms of where the money came from, what was spent, and what was left over after all expenses were paid?
income statement
Overt pay-for-play is called _____ in terrestrial broadcast radio, where it is illegal under U.S. federal regulations, but those broadcasting regulations don't apply to online.
payola
Artists' managers attempt to travel regularly with their clients.
False
Consumers seem to favor noninteractive streaming.
False
Contractually obligated to achieve maximum income for the artist, a personal manager is well-advised to accept every possible gig when the guaranteed fee is attractive.
False
Digital compression upgrades audio fidelity.
False
Entrepreneurship is a good option for everyone.
False
In transactional services, attorneys press the rights of their clients in court cases.
False
It's not that hard for a DIY artist to sell 50,000 units of a recording if he or she simply works at it.
False
Landing a job anywhere in the music industry is automatically building a career.
False
New artists usually pay personal managers lower percentage representation fees at the beginning of their careers because they simply can't afford to pay the percentages charged superstars.
False
On a revenue-per-play basis, streaming is far more lucrative than downloads.
False
Only after all the final language of a contract is agreed and the contract is singed, an attorney typically then drafts a "deal memo" to summaries the essential elements of the agreement.
False
Radio is no longer important in the promotion of recordings because it has been replaced by music TV and social media.
False
Several surveys in recent years reveal immense financial returns to artists from services such as Apple Music, Pandora, and Spotify.
False
Since a job interview is about the applicant, it's not necessary for the applicant to research the prospective employer company in advance.
False
Small startup businesses are exempt from business taxes and the requirement for permits for a certain amount of time.
False
Surveys show over three quarters of the population are happy with their job and career choices.
False
The DIY artist is pretty much alone without online tools to help provide promotional support for music distribution.
False
The distributors of a full line of music that service jukeboxes and small stores - venues that don't get the attention of labels and big wholesalers - are known as rack jobbers.
False
The music business even offers numerous opportunities, even for the poorly prepared.
False
The principal disadvantage of a sole proprietorship is that it is hard to set up.
False
Research suggests that people entering the workforce today will have, on average, twelve different careers.
False - book said 7
Which provision extended legal protections to digital platforms when third parties use their facilities to violate copyrights?
Safe harbor
An advantage to manufacturing on demand for CD duplication is that batches of CDs are duplicated in small amounts to match purchases and thus reduce unsold inventory.
True
As a practical matter, successful booking agents serve the interests of two different parties, the artist and the talent buyer.
True
While publicity is desirable because the cost to the label is relatively low, paid advertising has the potential advantage of yielding a large number of controlled impressions.
True
What is the most common commission cap range that artist unions impose on agents?
10-20%
After a contract is signed with a record label for an artist, which activity by the manager is likely to be most important? a.) induce label executives to attend showcases b.) encourage the label to promote the recordings c.) push label-affiliated publishers to come out with print editions of the artist's songs d.) seek out alternative back-up labels in case of noncompliance
b.) encourage the label to promote the recordings
Even a strong manager cannot expect to earn, over the long term, an income comparable to one of his or her successful clients.
False
An artist's contract with a personal manager should be... a.) transferable b.) nontransferable c.) never shorter than 5 years d.) a handshake deal
b.) nontransferable
The organization that represents commerce of recorded music in all channels is known as the _____
Music Business Association
Spotify is an example of what type of streamer? a.) noninteractive b.) subscription on-demand c.) dicovery d.) tethered
b.) subscription on-demand
If the personal manager in California wants to stay within the law, book gigs, and remain in the management profession, he or she needs to obtain a talent agent's license.
True
In California, only licensed talent agents are allowed to procure employment for an artist.
True
In retailing, the stock keeping unit is the code for each unique product that is in inventory.
True
It is possible for an artist to work with an agency on a nonexclusive basis or even with no written agreement at all - a soc-called handshake agreement.
True
It is the manager's responsibility to limit the frequency of performances to avoid exhausting the artist's energies.
True
Labels generally prefer artists have weak personal managers, so they can better influence the direction of the artist's career.
False
Lawyers are required to charge artist clients only an hourly fee or a flat-fee retainer.
False
Legal ethics requires that when negotiating on behalf of a band, each member of the group must have an attorney representing his or her interests as an individual.
False
The music business always spends more to market recordings to North America than in the rest of the world.
False
To save time and legal fees for beginning artists, most experts advise having one experienced attorney represent both parties in a negotiation.
False
Under state law, an artist may only grant "power-of-attorney" rights to a manager who has passed the bar exam in that state.
False
In lawsuits such as the Rosa Blasi case or the Ke$ha case cited in your textbook, the artists were pursuing which central legal argument?
Management firms illegally served or crossed the line as agents.
What type of equipment comprised 88% of listening by Pandora users in 2017?
Mobile devices
An artist may work on a nonexclusive basis with an agency contracted to work with the artist in a limited or a specific territory or kind of performance.
True
An artist must warrant to the personal manager that the artist (whether an individual or a group) is the sole owner of the professional name.
True
Despite the low payments per unit, the aggregate streaming is a bigger opportunity for rights holders than downloads.
True
For an artist with the goal of securing a record contract, a reasonable period of time for a personal manager to achieve that objective is one or two years.
True
For most music business attorneys, the majority of their time is spent with "transaction" work as opposed to litigation.
True
Generally, managers in New York are not union affiliated.
True
Individuals entering into contract negotiations are, by definition, adversaries.
True
Special material includes songs, patter, and routines created exclusively for the artist, used particularly in live performances to make the act distinctive.
True
With the streaming revolution, catalog music gets more play because of easy access - old music is always in stock on digital platforms.
True
Which on-demand interactive streaming service bundles music with video offerings from corporate siblings in the Google ecosystem?
Youtube Music
The trend is to release a recording at the same time around the world ______. a.) to thwart piracy by making legitimate recordings available at the same time b.) for economies of scale c.) for ease in cross-collateralization d.) because it's then easier to promote a hit in one country to others
a.) to thwart piracy by making legitimate recordings available at the same time
A wholesaling organization is a(n) _______. a.) retailer that sells concert tickets, recordings, and license music merchandise (the "whole" range) b.) intermediary to get merchandise to those who actually sell the product to consumers c.) full-price retailer that doesn't discount d.) retailer that doesn't sell singles, but only "whole" albums
b.) intermediary to get merchandise to those who actually sell the product to consumers
Which element is of keen interest to radio program executives when evaluating a song? a.) If the chord progression is similar to past hits b.) The royalty rate of the recording artist c.) If the song is getting airplay in other geographic areas d.) Confirmation that Sound Exchange represents the title
c.) If the song is getting airplay in other geographic areas
Which was the first launched streaming service? a.) Deezer b.) Apple Music c.) Napster d.) Slacker Radio
c.) Napster
Which provision is not a common feature of union agreements that franchise or license a booking agent? a.) limit on length of artist contracts b.) restriction on nonemployment procurement activities c.) limit on jurisdiction to a 300-mile radius d.) ceiling on commissions
c.) limit on jurisdiction to a 300-mile radius
Albums that aggregate numerous one-time hits from various artists in a new genre-specific recording are know as _______.
compilations
A key element to a good marketing program for a recording release is having a memorable element that will bait potential audiences, which is called a _____.
hook
The marketing of a new release today requires a unified, overarching plan, called _____ marketing.
integrated
Streaming parses and compresses content that is then transmitted independently in digital pieces, called _____, to receiver devices.
packets
What's the word for industry advertising not aimed at the consumer but rather at concert venues, record stores, and other entities within the music business?
trade
