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What are the 5 conditions necessary for a contract?
- 1) Competence: 18 years of age or older, of sound mind
- 2) Subject Matter: Decide on what the contract will be
- 3) Meeting of the minds: agreement on what each side of the party is going to do and a clear understanding
- 4) Obligation: Both groups actually do what they agreed to do or not to do
- 5) Consideration: money or services
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What are the 4 types of business structures?
Sole Proprietorship, Partnership, Limited Liability Company, Corporation
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A ____ ___________ has one owner.
Sole proprietorship
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A __________ is a seperate legal entity, much like a separate person.
corporation
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A _____________ must have at least two people; one general partner and one limited partner.
partnership
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A _____________ is owned by shareholders; only one shareholder is neccessary.
corporation
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A business form created January 1 1993 that combines feautures of two other types of business structures.
Limited Liability Company
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What are some advantages of incorporation?
There are tax advantages and limited liability.
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Under what conditions is a hoome office usually a deductible expense?
If it is listed as the only location for the business, if it is used for nothing else, if it is used to meet with clients
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What type of business structure uses "dba" or "fbn"?
sole proprietorship
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Limited Liability Corporation resembles a __________, taxed as a ___________.
corporation, partnership
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Session Contracts
- For musicians playing on recording sessions
- Usually no royalties for session musicians
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What types of contracts would you want an entertainment attorney to look over?
Recording contract, touring contract, personal manager contract, songwriter/publisher contract
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Why is a personal manager contract potentially dangerous for a SONGWRITER?
It could include lifetime royalties if you arn't careful
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A letter of agreement requires...
date, time, location, fee, name of act, agreed to, accepted by
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Formal Contract or Standard Contract
- U & C (Usual & Customary)
- can change anything on any contract if it is written in the margin and initialled
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Arbitration
Have to take the ruling of the arbitrator, can't appeal
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Court System
Uses a judge so there is a possibility for appeal
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Manager gets commissions on sales of records recorded ______ the term of the management contract, after the contract is over.
during
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Manager gets commissions on records actually made _____ the term of the management contract if they were ________ during the term of the management contract.
after;recorded
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A&R
- Artist and Repertoire
- Finds and signs new talent, development and execution of projects, studio production of signed talent, liason between artist and label
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Who typically owns the master?
The Record Label
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What is it called when a record company takes profits from one area and offsets those profits with losses from another area?
Cross collateralization
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What's te term for the process of a record company paying itself back its investment in an artist?
recoupment
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A unique, widely used name that represents for a specific type of phsyical goods.
Trademark
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A unique name widely used for a particular service.
Service Mark
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The use of a trademarked name that waters down or negatively influences an existing trademark.
Dilution
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This states that no one can claim that they own your trademarked name.
Affadavit of Incontestability
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May be filed with the appropriate government office if you plan to utilize a particular name within 3 years.
Notice of Intent
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Buy-on
The record label pays the headlining act to take on an opening act
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Split
Between an artist and a promoter
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Superstar splits
90/10 or 85/15
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Papering the house
giving away tickets for free to everyone in attendance
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Billing
- the noting of the acts on programs and signs
- specifically the size and placemnt of the artists name within the advertisements
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Concert promoter
- Person or company that works to bring the artist and the audience together
- marketing, ticket sales
- assumes financial risk
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Arts administrator
- Non profit market
- Operating and promotion activities for non profit groups
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Non-profit market
- Arts market (opera, ballet, etc)
- not part of commerical market like the target center or excel center
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Invisible venue
- places where the venue is built into an existing attraction
- casinos, performing arts centers, fairs
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mechanical royalty
- money paid by a record company for the right to use a song in records
- publisher issues a license to the record company that says, for each record manufactured and distributed, and each digital copy downloaded, the record company will pay royalty equal to a specified number of pennies
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who earns performance royalties and mechanical royalties?
songwriter and publisher
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performance royalty
royalty paid for use of a song in live or broadcast performance
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controlled compositions
a song that is written, owned or controlled by the performing artist
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what groups collect performance royalties?
ASCAP, BMI, SESAC
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who collects mechanical royalties?
harry fox agency
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splitting the publishing
when a songwriter receives a portion of the publisher's income
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compulsory mechanical license
- once a song has been recorded, released, and distributed, the publisher is required to grant this to anyone who wants to record that song
- must be sold to anyone who wishes to record a song that has already been recorded, released, and distributed
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fair use
allows for the usage of copyrighted materials in non-profit situations, such as quoting a passage in abook review or copying an article for classroom use
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works made for hire
refers to work for whih the composer or author is paid a salary; typically the songwriter does not retain copyright
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sync license
license needed for the use of music in a film
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application of profits from one area to offset losses in another
cross collateralization
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a type of record contract in which the record label receives a percentage of every facet of the artist's earnings
360 deal
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a completed, mixed track on an album, or the completed mix of an entire album
master
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given as payment to the artist to use while a record is being made
advance
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as part of a record deal, when a record company is allowed to take a commission on earnings of the artist from non-record sources-sources that the record company had no part in securing
passive interest
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a record contract in which the artist ahs to pay the producer out of his/her points
all-in-deal
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money earned by the artist from companies that the record label required artist to utilize
active interest
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money designated to be used for creating an album
recording fund
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money paid to the artist, usually a percentage based on sales
royalty
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applying the profits from one area to offset losses in another area, from one record contract to another, either previous or following the current contract
sequential cross collateralization
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most common split for dividing mechanicals
50% publisher 50% songwriter
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copyright on a work made for hire runs for
95 years from date of first publication or 120 years from date of creation, whichever is shorter
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who would be most likely to use the services of harry fox agency?
someone making a CD of cover tunes or standards
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In 1976 copyright law revision, duration of copyright was lengthened to
to authors lifetime + 70 years
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we can rent DVDs and other video software without paying a royalty thanks to
the First Sale Doctrine
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an example of "fair use" is
quoting of a passage from a book for critical review in a magazine
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you cannot copyright a(n):
idea, song title, chord progression
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7 marketing basics:
- 1) establish credibility
- 2) Relevant to customer's needs
- 3) Don't oversell
- 4) Make it personal
- 5) Test your material
- 6) specialize in one thing
- 7) repeat emails, mailings, phone calls
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what kind of provision should you ask for in record contract?
key member
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dilution
- exists when a subsequent usage waters down the name's original value
- ("rolling stone records")
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buyouts
a percentage of the "hard assets" owned by the partnership
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sampling
process of digitally recording a sound, usually from a previously recorded sound recording, and incorporating the sampled material into a new recording
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what copyrights are involved in sampling?
sound recording (from the owner of the sampled) and musical composition (owner of the composition)
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copyright
- a limited duration monopoly that gives the copyright holder certain rights of ownership for a limited period of time
- copyright exists when a work is created in tangible form
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Need what kinds of copyrights?
- PA (performing arts)
- SR (sound recording)
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publishing is the __________ source of income in the music business
steadiest
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what does a producer do?
- select songs
- decide on arrangements
- get right blend and balance
- handle administrative details
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producers are paid royalties on ___ records sold
all
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what does a mixer do?
blend the multitrack recording into desired sound
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production deals (4 types)
- 1) prudcer hired as full-time salaried employee
- 2) producer hired as independent
- 3) producer delivers the artist and master
- 4) producer's services are delivered by artist
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3 phases of record production
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Majors labels do ____ distribution
own
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Major-distributed independent labels
record company finds and records artist, but has a contract with a major label to do distribution, marketing and promotion
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"true independent"
- not owned by a major label
- financed by owners & investors
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direct sales
buy directly from bands
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consignment
stores stocks your record for 90 days, keep 25-50% of the gross sale
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sales (in a record label)
- selling to retailers
- online sales
- distribution
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promotion & marketing (in a record label)
- radio promo
- video promo
- publicity
- advertising
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royalty calculation
percentage of the wholesale price
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artist's advance
money given to the artist during the time the album is made
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data collection service to track record sales
soundscan
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BDS & Mediabase 24/7
electronic ears to listen to radio stations
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webcasting royalties
- if you are the featured artist on a master recording on a noninteractive internet site
- 50% to owner of sound recording
- 5% to unions
- 45% proportionally to band members
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PROS
Performing Rights Organizations
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PROS issues licenses and collect royalties for ____ performances and _________ performances.
live and broadcast
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ASCAP
- PRO
- American Society of Composers, Authors & Publishers
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SESAC
- PRO
- Society of European Stage Authors and Composers
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Songwriters may join __ PRO(s) and Publishers may join ___ PRO(s)
1; all
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blanket license
a license to cover all neccessary areas 1 fee
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Mechanical Licenses
Record compnay required by law to obtain a mechanical license in order to produce and distribute records to the public
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fair use
use of music in a non-profit situation, no copyright needed, credit source
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consent decree
allows PROs framework in which to operate
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weighted performances
performances weighted heavier in terms of radio airplay
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Performance Rights Exclusion
in US ppl who played on a CD don't get paid for radio airplay, record label & songwriter do, legislation trying to pass against this right now
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whose responsibility is it to pay for the licensing of music in a live performance?
venue
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RIAA
Recording Industry Association of America
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AFM
American Federation of Musicians (instrumentalists)
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AFTRA
American Federation of Television and Radio Artists (vocalists and actors on live, taped, or digital media)
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agents
- mostly book for live appearances
- should never take a commission from record earnings
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sunset clauses
- manager can commission only on records recorded and released during term of contract
- managers get 1/2 commission on records recorded during the term but released after contract expires
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5 conditions to compulsory license
- 1) song must be a non dramatic work
- 2) previously recorded
- 3) distributed in records previously
- 4) doesn't change fundamental melody or song character
- 5) used only in phonorecords
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merchandiser
- company licensed to make and sell merch
- pays 30-40% royalties to artist of gross
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hall fee
fee the venues takes from merch
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per head figure
how much $ an artist generates per head
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retail merchandising
artist gets 15-20% of wholesale price
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mail order
artist gets 25% of retail
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To have a song in a motion picture you must have agreements with:
- 1) performer
- 2) record company to whom performer is signed
- 3) record producer
- 4) songwriter
- 5) publisher to whom songwriter is signed
- 6) owner of master recording that's sampled in song
- 7) publisher who owns a song that's been sampled
- 8) record company putting out soundtrack
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