music biz midterm 2

  1. Compulsory License
    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
  2. Mechanical licenses
    Record company required by law to obtain a mechanical license in order to produce and distribute records to the public
  3. Blanket Licensing
    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
  4. 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
  5. Who is licensed?
    Radio, TV, clubs, hotels, arenas, colleges, concert halls
  6. Publishers may join ___ PRO(s)
  7. Songwriters may join ___ PRO(s)
  8. 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)
  9. For most composers and publishers, their _______ source of income is from licensed performances of their music.
  10. What are the 2 types of royalties for a songwriter?
    • Mechanical (Harry Fox agency)
    • Performance (collected by PROs)
  11. PROs issue license and collect royalties for what?
    Performances, live and broadcast
  12. What is a license?
    Granting of official permission to do something
  13. What is a PRO?
    Performing Rights Organization
  14. P3 hases of Record Production:
    • -Prepro (Planning)
    • -Tracking
    • -Postpro (Mixing/Mastering)
  15. 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
  16. what do mixers do?
    blend the multitrack recording into the desired sound
  17. What are producers paid royalties on?
    All records sold, recording costs are not charged against royalties

    record company does recoup producer's advance
  18. 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.)
  19. 4 Major Labels
    • -Universal
    • -Sony/BMG
    • -EMI
    • -WEA
  20. 2 types of independent labels
    Major -distributed independent

    True Independent
  21. Major-distributed independent
    record company that finds and records artists, but has a contract with a major label to do distribution, marketing and promotion
  22. "true" independent
    • -not owned by a major label
    • -financed by owners &/or investors
  23. Methods of distribution- Direct sales
    independent stores buy from local bands
  24. consignment
    store stocks your records for usually 90 days. They keep 25-50% of the gross sales. Unsold product is returned to you.
  25. Record Company Structure
    • A & R
    • Sales
    • Promotion
    • Marketing
  26. 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
  27. Sales
    selling to retailers, online sales, distribution
  28. 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
  29. definition of RECORD
    -both audio ONLY and audiovisual recordings
  30. definition of a MASTER
    original studio recording
  31. Royalty Calculation
    • -Artist royalty is a percentage of the wholesale price (PPD or BPD)
    • -Each royalty percent is called a point
  32. Royalty Deductions
    • 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"
  33. Artist's Advance
    advance is money given to the artist during the time the album is made
  34. Recoupment
    • -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
  35. Cross-Collateralization
    • -The application of profits in one area to offset losses in another
    • -never good for the artist
  36. Cross-Collateralizating Sequentially
    advances under your current recording deal are cross collateralized with royalties under past and future record deals
  37. Data collection services
    • Soundscan -CDs
    • BDS & Mediabase -Radio
  38. Concert market
    • -concert biz rivals recorded music revenue stream
    • -tickets and merch
  39. Webcasting Royalties
    • -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
  40. webcasting royalties are paid by...
    sound exchange and royalty logic
  41. webcasting royalty money is divided by...
    • 50% to owner of sound
    • 5% is paid to unions
    • 45% proportionally to each band member
  42. 360 deals
    • -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
  43. 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
  44. 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
  45. Sunset Clauses
    • -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
Card Set
music biz midterm 2
music biz midterm