Survey of Music Business Final

Audio Home Recording Act of 1992 (AHRA)

* First gov imposed royalties on devices and media, allowed people to make blank CDs, DVDs, etc

Digital Performance Right in Sound Recording Act of 1995 (DRPA)

* First time record companies were paid royalties for broadcast of sound recordings (EX: digital cable, satellite, Sirius XM, etc)

Digital Millennium Copyright Act of 1998 (DMCA)

* Requires web casters to pay licensing fees to record companies * Limits ISPs from copyright infringement liability for simply transmitting info over the internet * However, ISPs are supposed to remove material from users websites that constitute copyright infringement

When an album has been certified "Platinum" in the U.S., it has reached what sales mark?

1 MILLION

% of revenue for synchronization

1%

% of revenue for MUSIC DOWNLOADING

10%

% of revenue for PHYSICAL

10%

The standard commission for a booking agent specializing in music is what % of the guarantee?

10%

% of revenue for LIVE MUSIC SPONSORSHIP

12%

% of revenue for STREAMING

18%

Publishing: Income sources % Synchronization

20%

Publishing: Income sources % Mechanical

23%

% of revenue for LIVE MUSIC TICKET SALES

43%

% of revenue for PERFORMANCE RIGHTS

5%

Lawyers can bill clients in a variety of ways such as an hourly rate, retainer, or % of value of the deal negotiated. What is the standard % for layers to change?

5%

Publishing: Income sources % Other

5%

When an album has been certified "Gold" in the U.S., it has reached what sales mark?

500,000

Publishing: Income sources % Performances

52%

In a typical artist royalty contract with a controlled-composition clause, what percent of the full mechanical royalty rate is the label willing to pay for the full album.

75%

Record Companies typically pay a lower or reduced royalty for sales outside the U.S. In Canada, the standard reduced royalty rate is ____________ of the U.S. Royalty Rate.

85%

Compulsory Mechanical License

A license that is paid for the duplication of copyrighted material. License has to be granted.

A key man clause in a contract refers to

A person whose absence may terminate the contract

A retainer is

A set monthly fee paid to an attorney

The main job of a record producer is to:

A. Find and select songs for an artist. B. Manage the Recording Process C. Creating The "sound" of the artist.

The role of the personal manger is to help with major business decisions of the artist such as:

A. What label to sign with B. Whether or not to take a publishing deal. C. Corporate Sponsorships.

Which of the following has little impact in attracting studio bookings?

Aggressive publicity from a big in-house staff- Publicity from in-house staff does

Business managers typically can get paid on an hourly rate, a flat monthly fee, or a % of all monies earned. For a new artist what would be the best scenario if there wasn't a lot of monies being generated by the artist, but they still needed financial assistance.

An hourly rate for the work done.

SAG-AFTRA might often represent many employees performing what kind of work?

Announcers

According to your textbook, in addition to the personal manager, who should approve the selection of a business manager, accountant, or auditor?

Artist

"A&R" means:

Artist and Repertoire

Trade Union

Bargain with employers for pay and work rules. Have defined legal rights and constraints

They word "payola" in the music business refers to ___________ for radio airplay.

Bribes

Talent agents or booking agents typically engage musical artists for what kind of work?

Concert or club dates

Copyright Royalty Board (CRB)

Created out of copyright royalty + Dist. act of 2004 -Compulsory Mechanical License Currently at 9.1 Cents

Specialty labels tend to be successful when they_____.

Do not compete in mainstream music where the majors dominate

Once a personal manager manages to nail a deal with a record label for the artist, which of these activities by the manager is likely to be most important?

Encourage label executives to live up to the terms of the contract

The concept that an artist can only have one personal manager is known as:

Exclusivity

Monies are said to be non-recoupable if they are deducted from artist royalties. T/F

FALSE

Most albums recoup the expenses advanced to artists. T/F

FALSE

Most producers never "pad" their budget to create some excess to cover any unexpected expenses when recording a project. T/F

FALSE

Radio is no longer important in the promotion of recordings because it has been replaced by social media and streaming. T/F

FALSE

Tour support is money provided by the label to new artists to help offset the expense of touring. Like Independent Promotion, Tour Support is 50% Recoupable. T/F

FALSE

The current trend in recording contracts is for a label to commit to three (3) firm albums, with options for additional releases. T/F

FALSE- 2

When a record bombs, or doesn't recoup, artist royalty contracts typically require the artist to return the production money advanced by the label. T/F

FALSE- The label usually ads the un-recouped amount to the budget of the artist next release. Meaning they will owe that amount on top of any future debt incurred on a future release.

Rack Jobbers typically buy product in bulk from major labels/distributors and sell them to smaller independent retailers in small quantities? T/F

FALSE- right answers: one stops

A manager should commission tour support that is paid to the artist by the label. T/F

False

A personal manager for an established touring act typically attends nearly every performance. True/False

False

As a practical matter, successful booking agents serve the interests of two different parties, the artist and the talent buyer. True/False

False

It is common practice for your business manager and your personal manager to be the same person. T/F

False

It is standard practice to give your manager power of attorney to sign all contracts, write checks, and to hire an fire people on the artist behalf. True/False

False

It is virtually impossible for a label to make a profit for itself on a recording that does not recoup the advances made to the artist. T/F

False

Like most large business entities, major labels are conservative and are slow to catch up with shifts in tastes in the consumer marketplace. True/False

False

Most recordings at major music labels turn a profit. T/F

False

The business and legal affairs department oversees the day to day operation of a record company. True/False

False

The record label staff that tries to interest radio stations in programming music and get songs on popularity charts also works to arrange promotional appearances, interviews, giveaways, and contests with radio stations. T/F

False

The standard fee for a business manager is 10%? T/F

False

Compared to independents, what are the areas in which major labels have the biggest business advantage?

Financial strength and distribution prowess

What is the function of the A&R Department at a record label?

Find, Nurture, and work creatively with the artist.

The term for income before the expenses is

Gross

A business manger is another key member of an artist team. The primary role of the business manger is to:

Handle all of the artists money from collecting it, paying bills, investing it, and filing tax returns.

In addition to helping with business decisions, the personal manger also assists the artists with the creative process. Which of the following would not be part of the creative process:

Helping hire a business manger.

Elements of a campaign in which one set of materials is interlocked with or directs consumers to another related set is called marketing _________________.

Integration

The chief executives in charge of record labels tend to have risen from which work background?

Lawyer or Producer

What one skill is not usually associated with a record producer?

Mastery of at least two musical instruments (or voice and one instrument).

The term referring to income after expenses are taken out is

Net

When two clients of the same attorney agree to ignore the conflict if interest and keep using that attorney to make a deal with each other, they are

None of the above

A conflict of interest happens often in the music industry, when a lawyer may represent both parties in a negotiation or lawsuit. There are several ways to resolve this. Which is the most common?

One of the clients get a new attorney

Four key players on an artist's team are:

Personal Manager, Attorney, Business Manager, Agent

In recording contracts the term PPD refers to:

Price Published to Dealers

Which job on a network TV show is least likely to be subject to AFM jurisdiction?

Proofreader

Radio stations whose song playlists are closely watched by trade papers, electronic song tracking services, and tip sheets are called ______________ stations.

Reporting

What are the three major entertainment/music companies?

Sony Music Entertainment, Universal Music Group, Warner Music Group

Based on current trends in music, what is the most common means of consuming music?

Streaming music on an electronic device.

S.W.O.T.- an important and effective plan of attack for marketing

Strengths: what does the project have working in its favor? Weaknesses: avoiding tactics that won't pay off- come up with other strategies if the artist can't tour Opportunities: what potential opportunities can be exploited for the artist?Touring, TV appearances, etc Threats: factors that way be working against the success of a marketing plan.

Selecting music to record may be influenced by several people. With a major-label deal, who typically has the final say on what gets released.

THE LABEL

What is the form of advertising aimed at the industry such as venues, record stores, and other entities with in the music business?

TRADE

Cooperative or co-op advertising is when a label and a retailer join forces in the placement of paid advertising.

TRUE

If an artist has an "all-in" producer deal, it is possible the artist will owe the producer royalties, even though the artist has not recouped. T/F

TRUE

If an artist is said to have a 10 point deal, that is the equivalent of 10% royalty of PPD? T/F

TRUE

In an all-in deal between an artist and label, the producer's royalty comes out of the artist's royalty. T/F

TRUE

New artist typically get a royalty rate of 13-17% of PPD. T/F

TRUE

Producers are typically paid for all records sold. T/F

TRUE

Record labels kept many "House Producers" on staff that were assigned to all their recording artists until the 1960's when rock acts broke away by selecting outside independent producers in a bid for greater control over selection of songs. T/F

TRUE

THE recording budget should typically match your marketing budget

TRUE

The standard royalty rate for a producer is 2-6 % of PPD in an "All In" deal? T/F

TRUE

When an artist is recouping advances for a release, the rate at which that debt is paid back is equal to the royalty rate of the artist. T/F

TRUE

Concert promoters contract for artist services through

Talent and booking agencies

The best selling album of all time is?

The Eagles Greatest Hits: 1971 - 1975

A business manager has been recommended by a manager and hired as part of the team. Who does the business manager work for?

The artist and the manager

It is standard practice for a recording contract to be "all in". What does this mean?

The artist is responsible for paying the record producer royalties.

Which one of the following is most likely NOT a strength to utilize in the marketing of a recording release?

The artist spent a long time in the recording studio.

They key players who help devise a marketing plan for release of a music album may include all of the following except which one?

The mixer of the album

In a 360 Recording Deal labels are wanting a piece of artist earnings in the following categories:

Touring, songwriting, acting

A "sunset clause" in an artist management contract provides a roadmap for an orderly de-escalation of the financial obligations between the artist and manager. True/False

True

A letter of direction is given to a label by the artist, and instructs the label to pay the producer directly. T/F

True

An escalating scale agreement between an artist and manger is usually better for the artist on the front end and better for the manger on the back end of the deal? T/F

True

Any conversations about fees with any member of your team should be had as soon as possible, regardless of how uncomfortable they are. True/False

True

As the recorded music industry declined after 2000 due to the digital revolution, many performers no longer looked at major-label deals as a career necessity for the first time. True/False

True

If a song becomes popular in one geographic region, the record label might double marketing efforts there to try and cultivate a regional hit. T/F

True

In the AFM, dues assessed members are related at least partially to a percentage of earnings on jobs subject to union jurisdiction. T/F

True

It is standard practice for managers to commission in areas where an artist is already established. True/False

True

Labels started allowing stores to return product in order to get them to agree to take in more product than they wanted to bring in. T/F

True

Musicians who establish themselves as star performers generally don't have to join a union as their career progresses. True/False

True

One of the main jobs of being a personal manager is "managing expectations". True/False

True

One of the roles of the business manager is to work with the artist manager on tour budgets. T/f

True

Royalties of featured artists are usually 2 to 5 times higher than the producer. T/F

True

Session musicians or side musicians are instrumentalists hired to work at recording studios and are paid union scale. T/F

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/False

True

The artist manager should always be the professional contact for the artist? True/False

True

The going rate for a personal manager's commission is usually in the range of 10% to 25%. T/F

True

Tour support is the money the label has advanced to make up for financial deficits the artist incurs while on tour. T/F

True

Under standard management deals and percentages, it is possible for a manger to make more money than the group or individual group members? True/False

True

Unions negotiate wages and working conditions. True/False

True

When picking a booking agency it is wise to make sure the agency has experience working in your specific field (music, film,tv) or genre of music. True/False

True

While 360 Deals are still new, a record company can average between 15-30% of the artists net income in non-record sources of income. T/F

True

While managers will require exclusivity with an artist, it is acceptable for a manager to represent multiple clients simultaneously. True/False

True

With a recording fund, a royalty artist who incurs recording expenses lower than the budgeted amount may be able to pocket the difference. T/F

True

Guild

Unite artists from a single craft and attempt to maintain or celebrate industry standards. Do Not Negotiate Wages.

Many management contract allow the manager to recoup from the artist certain expenses incurred while acting as their manager.These should be limited to the "costs of doing business." Which of the following is not considered an acceptable, recoupable expense:

Vacations

In a personal management contract the "sunset clause" refers to:

When the manager no longer receives commissions from the deal.

Which of the following are of keen interest to radio program executives when evaluating a song?

Whether the song is getting airplay in other cities.

What is the function of the Promotions Department at a record label?

Work on Promotional Campaigns for the Artist

Email mailing list are most useful in marketing recorded music when they are collected by _________________________.

artist and labels, especially if the label is focused on a specific genre.

Marketing executives responsible for:

developing an executing of multimedia campaigns, providing sales aids to retailers, and igniting fan interest online

What job has become more important because modern digital equipment offers a wide array of options and capabilities, with much to navigate.

engineering

For record labels, big expenses are in the actual recording of the album, while marketing and promotion are not as big of a financial concern. T/F

false

The music business lays out large amounts of money for paid advertising, making the industry roughly comparable in an expenditure levels with movies, cell phones, and beverages. T/F

false

it is custom not to decrease or increase a marketing expenditures for a recording once a plan is set. T/F

false

Superstar artists typically get a royalty rate of 15-17% of PPD? T/F

false- 18-22%

As artist gain superstar status, royalty rates generally go down in percentage terms because the absolute amount paid to the superstar rises substantially as unit sales increase. T/F

false- Superstar royalty rates increase

One Stops lease floor space from department stores or mass merchants.

false- rack jobbers

Producer royalties typically are effective from the first record sold, while the artists usually have to wait until recording costs are recouped, which is considered fair because artists _______________ .

receive a large advance payment for albums

When all albums that are part of a multi-album slate are no longer being actively promoted at retail in their original release, the rights to the sound recording typically will be controlled by which party?

the label

Fanzines have a relatively small circulation, but are sought after publicity placements in music marketing because _____________.

their audiences are proactive or engaged consumers.

Independent Radio Promotion costs are typically recoupable from the artist's royalties. T/F

true

Associations

various memberships and missions

Satellite radio is important in promoting some recordings through airplay primarily because __________________.

vast playlists capacity from numerous genre-specific music channels.