Once a song is published, recorded, and distributed, then the copyright holder is required by law to license anyone to record and distribute that song, in exchange for a fixed mechanical royalty
Record company required by law to obtain a mechanical license in order to produce and distribute records to the public
Many stations purchase a blanket license to cover the entire catalog
If a station is part of a conglomerate the parent company will purchase the blanket license
Factors influencing the license rate (live performance)
Seating cap, admission charge, weekly budget for live music, number of hours of live music, estimated gross income
Who is licensed?
Radio, TV, clubs, hotels, arenas, colleges, concert halls
Publishers may join ___ PRO(s)
Songwriters may join ___ PRO(s)
What are the 3 PROs in the US?
- ASCAP (American Society of Composers, Authors, Publishers)
- BMI (broadcast music inc)
- SESAC (Society of European Stage Authers and Composers)
For most composers and publishers, their _______ source of income is from licensed performances of their music.
What are the 2 types of royalties for a songwriter?
- Mechanical (Harry Fox agency)
- Performance (collected by PROs)
PROs issue license and collect royalties for what?
Performances, live and broadcast
What is a license?
Granting of official permission to do something
What is a PRO?
Performing Rights Organization
P3 hases of Record Production:
- -Prepro (Planning)
- -Postpro (Mixing/Mastering)
4 types of production deals:
- 1) Producer hired as full time salaried employee, possibly with a royalty override (head of A&R assigns projects; producer has little input)
- 2) Producer hired as independent (Job is to create master, label assigns budget, delivers artist, producer receives production fee)
- 3) Producer delivers the artist and master and then shops it to a label
- 4) Producer's services are delivered by the artist
what do mixers do?
blend the multitrack recording into the desired sound
What are producers paid royalties on?
All records sold, recording costs are not charged against royalties
record company does recoup producer's advance
What does a Producer do?
- -select songs
- -decide on the right arrangements
- -get the right blend and balance (vocals & instruments)
- -Handle administrative details (booking studio, musicians, filing union reports, etc.)
4 Major Labels
2 types of independent labels
Major -distributed independent
record company that finds and records artists, but has a contract with a major label to do distribution, marketing and promotion
- -not owned by a major label
- -financed by owners &/or investors
Methods of distribution- Direct sales
independent stores buy from local bands
store stocks your records for usually 90 days. They keep 25-50% of the gross sales. Unsold product is returned to you.
Record Company Structure
- A & R
A & R
- Artist & Repertoire:
- -Find & signs new talent
- -development and execution of projects
- -involved in studio production with the talent they have signed
- -acts as a liason between artist and label
selling to retailers, online sales, distribution
Promotion & Marketing
- -radio promotion
- -video promotion
- -publicity-TV appearaches, interviews, articles in newspaper, magazines
- -Advertising campaigns
- -Creative services-posters, POP displays, album artwork
- -Product Management- works with other departments in packaging, touring, advertising, promotion, overall coordination of a new release
definition of RECORD
-both audio ONLY and audiovisual recordings
definition of a MASTER
original studio recording
- -Artist royalty is a percentage of the wholesale price (PPD or BPD)
- -Each royalty percent is called a point
- 1) Free goods
- 2) Promotion Copies (given to radio stations; not for sale)
- 3) Return Privilege
- 4) Reserves (some money is held back as a "reserve against returns"
advance is money given to the artist during the time the album is made
- -the process of the record company paying itself back it's investment in the artist
- -record company keeps the artist's royalties until they ahve recouped their costs
- -The application of profits in one area to offset losses in another
- -never good for the artist
advances under your current recording deal are cross collateralized with royalties under past and future record deals
Data collection services
- Soundscan -CDs
- BDS & Mediabase -Radio
- -concert biz rivals recorded music revenue stream
- -tickets and merch
- -if you are the featured artist on a master recording that is broadcast on a noninteractive internet site then you should get royalties
- ex: land based radio, sattelite radion, on demand
webcasting royalties are paid by...
sound exchange and royalty logic
webcasting royalty money is divided by...
- 50% to owner of sound
- 5% is paid to unions
- 45% proportionally to each band member
- -record company gets a share of the entire pie (record sales, touring, songwriting, merch, fan clubs, sponsors, movies)
- -arn't making enough money just selling records
- -building brand
how does a 360 deal work?
- -record company gets 10-35% of the artist's net income from non record sources
- -can deduct 30-35% for commissions to your team
Commissions paid to Personal Manager
- -15% of gross is standard
- -manager gets commissions on sales of records recorded during the terms of the management contracts, after the mgt. contract has expired
- -managers gets commissions on records made after the term of the management contract, if they were recorded during the term of the mgt. contract
- -manager can commission only records recorded and released during the term of the contract
- -manager gets half commission on records recorded during the term but released after the term