MBUS 3010 test 3

Types of royalties

Artist, Performance, Mechanical, Streaming Mechanical, Sound Recording (non-interactive streaming), Sound Recording (interactive streaming)

artist paid by and to

label pays artist

Artist paid for

Sales, streams of a recording.

performance paid by and to

Performing RIghts Organizations (United States: BMI, ASCAP, SESAC, GMR) pays songwriter and publisher

Performance paid for

Public Performance of a composition

mechanical paid by and to

label pays Publisher who pays Songwriter

Mechanical paid for

Sales of a reproduction of a composition

streaming mechanical paid by and to

DSP pays Mechanical Licensing Collective who pays Publisher who pays Songwriter

Streaming Mechanical paid for

Interactive Stream of composition

sound recording (non-interactive) paid by and to

sound exchange pays Artists, Session Musicians, Labels

Sound Recording (non-interactive streaming) paid for

Non-interactive stream of a sound recording.

sound recording (interactive) paid by and to

DSP pays Labels who then pay artist royalties from this money

Sound Recording (interactive streaming) paid for

Interactive Stream of recording

Types of royalty paid to Sale of Vinyl Record, cd, download

Artist royalty to artist; Mechanical Royalty to Songwriter

Types of royalty paid to Interactive Streaming

Artist royalty to artist; Mechanical Royalty to Songwriter, Performance Royalty to Songwriter

Types of royalties paid to Non-Interactive Streaming

Mechanical Royalty to Songwriter, Performance Royalty to Songwriter, SoundExchange Royalty to Artist, Label, Session Musicians

Types of royalties paid to Broadcast Radio

Performance Royalty to Songwriter

Term

Length of deal. Typically # of albums NOT years.

Masters

Recordings. Multi-tracks OR Mixes

Re-recording Restriction

Contractual clause stating a time period during which an artist may not release any new recordings of songs already recorded for the label.

Base Rate

The basis from which a royalty is calculated

Penny Rate

The actual monetary amount an artist gets paid in royalties per transaction

Advance

Label pays artist an advance payment of future royalties.

Recoupment

Artist will not receive any royalty payments until after all advance monies on deal have been recouped by artist royalties.

Non-Returnable

If advance is unrecouped, artist does NOT have to repay label.

Cross-Collateralization

On a multi-album deal, all advances MUST be recouped before ANY royalties are paid. Producer royalties are NOT cross collateralized.

360

A 360 Deal is one in which the label receives a % of ALL of the artist's entertainment related income streams beyond recordings, including: Live Performance, Songwriting, Publishing, Merch, Sync Licensing, TV and Film appearances, Books.

Different types of record labels

major, major-owned Indies, and Indies

majors

Distribution for major labels and subsidiaries. Ex. Warner, Sony, Universal

Major-owned Indies

- The largest independent distributors are owned by the majors

ex. ADA ( warner), RED (Sony), Caroline (Universal)

Indies

no major affiliation. Ex. Darla, Red Eye

DSP

Digital Service Provider: any music streaming service.

ISRC

International Standard Recording Code. A unique ISRC code is created and assigned to every song that is released and ensure payment of royalties.

Metadata

The information embedded in a digital recording that tells the name of the song, album, artist, as well as ISRC. Added during mastering.

Spotify payout

Spotify pays about $0.004 per stream to rights holders.

Apple payout

Pays about 2x Spotify to rights holders

Tidal payout

Highest royalty rate among major DSP's

YouTube

Lowest royalty rate among major DSP's

Gold Record

500,000 sales or TEA

Platinum Record

1,000,000 sales or TEA

Diamond Record

10,000,000 or TEA

Billboard Hot 100

Singles chart.

Billboard 200

Album Chart

S.E.A. and T.E.A.

Billboard Charts use SEA/TEA to determine chart rankings now. Track Equivalent Album - 10x download = 1 album. Stream Equivalent Album - 1250x streams = 1 album.

Album Cycle

18-36 month period after the release date of an artist's album.

Catalog

Billboard definition: More than 18 months old AND fallen below position 100 on the Billboard 200.

Active roster catalog

Catalog by artists still releasing music on a label

Vinyl Record Pressing process

1. Lacquer 2. Metal Master (plating) 3. Metal Mother 4. Metal Stampers 5. Pressing

Tracking

Recording of basic track with the band; creation of the beat.

Overdubs

Adding additional instruments and vocals.

Mixing

Blending all of the sounds together. Adding effects such as EQ, reverb, echo, compression.

Mastering

Creation of the final master copy from which other versions are made (vinyl, cd, files for uploading to streaming). Inserting meta-data such as ISRC, song titles, artist name, other credits.

mastering for streaming

- Level is important

- Too loud and it gets automatically turned down by streaming service

- Too quiet and it doesn't "sound like a hit"

- Great mastering engineer makes a difference

LUFS and MFit

-Loudness Units Full Scale

-Spotify and Apple stream sound around 14 LUFS.•

-Mastered for iTunes

Bandcamp

-takes 15% of sales on their platform

-artist uploads music to platform

-fans pay through platform to artist

-keeps 15% before paying artists

How do local record stores pay for music?

Buy directly at wholesale price. Pay artist upon delivery. Take on consignment. Pay artist after they sell records or cd's.

An artist's royalty from their label may be a percentage based on any of the following

-The sticker or list price. AKA Suggested List Retail Price (SLRP)

-The wholesale price AKA Published Price to Dealers (PPD)

-The total amount collected by the label or distributor -The total Rights Holder Payout of a stream.

Determine if CD, CD R, Vinyl, Cassettes are replicated, duplicated, or pressed

CD - Replication

CD R - Duplication

Vinyl - Pressing

Cassettes - Duplication

Independent Label Groups

These exist so that independent labels can do their own creative work, such as A&R andMarketing, but can streamline other business functions such as shipping, royalty calculationsand business affairs (legal department.)

Digital Aggregators

Places music on all streaming services.Not curated. Anyone can use. Charge either:

■ Monthly Fee

■ Annual Fee

■ Per Release Fee

■ % of Revenue Generated by Streams

Rack Jobbers

■ Distributors that run the music department of a retail outlet that is not exclusively a record store.

■ EXAMPLE: the cd/vinyl departments at Target, Wal-Mart, Urban Outfitters, etc.

Streaming process

■ Artist sends mastered recording to label.

■ Label sends to Distributor or Digital Aggregator

■ Distributor or Aggregator uploads to Streaming Services

■ Streaming Services pay Distributor/Aggregator

■Distributor/Aggregator pays Label

■ Label Pays Artist

Retail outlets process

■ Artist sends mastered recording to label.

■ Label sends to Distributor.

■ Distributor sells to Retail Outlets.

■ Retail Outlets pay Distributor

■ Distributor pays Label

■ Label Pays Artist

Broadcast Radio process

■ Artist sends mastered recording to label.

■ Distributors do NOT send music to radio stations.

■ Label promotes artist's music to radio programmers.

■ Radio Stations plays music.

■ Radio Stations pay blanket license fees to Performing Rights Organizations (ASCAP,BMI, SESAC, GMR).

■ Performing Rights Organizations pay Songwriters and Music Publishers.

■ Artists and Labels do NOT get paid for radio broadcast of recordings.

Direct to consumer process

■ Record Labels and Independent Artists have website.

■ Market offerings to public.

■ Fans order from websites through Payment Processor (CC, Venmo, PayPal)

■ Payment Processor sends money (minus service charge) to artist or label.

■ Orders are shipped in one of two ways: 1) Directly from artist or label 2) Fulfillment company

a & r

Artist and Repertoire. Scout talent, sign artists

Sync or Film/TV/Games

license recording for sync use

production

collect different versions, delivery to DSP's; vinyl/cd mfg; ensure credits correct; collect final edits; etc.

Finance

compute and pay royalties

Business affairs

legal

International

anything oversees

Graphics

all graphic design (cover art, posters, logos, etc)

Promotion

radio

Public relations

in house PR. Sometimes supplemented with independent PR

Sales/Marketing/Digital Marketing/Digital

Create campaigns around new releases

Strategic marketing

brand partnerships, endorsements, sponsorships

Product Management

handle logistics... coordinate it all

What are the two functions of a label that can be hired from outside of the label

PR and radio promotion

Firms

Firm commitment

Options

Decided later

Ownership deal

Label owns masters forever

License deal

artist, producer, or production company owns masters and licenses them to a label for a specific length of time

What is a re-recording restriction in music contracts?

A re-recording restriction is a clause that prevents an artist from re-recording songs released through a label for a specified time period.

How long was the traditional re-recording restriction period?

Traditionally, the re-recording restriction period was 5-7 years.

What is the typical re-recording restriction period after 'Taylor's Version'?

After 'Taylor's Version', the typical re-recording restriction period is generally 10-15 years, and can occasionally be as long as 30 years.

Can artists re-record their songs after the re-recording restriction expires?

Yes, once the re-recording restriction expires, artists may record and release new versions of the same songs.

Which artist is known for re-recording her previous albums due to re-recording restrictions?

Taylor Swift is known for re-recording her previous albums due to re-recording restrictions.

Artist or producer owns master

■ Owner licenses recording to the label to commercially release and distribute the recording.

■ The label pays a percentage of sales to the owner of the recording.

■ If the owner is a producer or production company, then they pay the artist.

Label owns master

■ Label commercially releases and distributes.

■ Label pays the artist a percentage of sales a.k.a Royalties.

Front end

The label pays part of the advance when the production of the album begins

Back end

The label pays the remainder of the advance when the album has been completedand accepted by the label.

PPD Deal

Artist gets paid a % of the Published Price to Dealers, a.k.a. Wholesale Price. Most Major label deals are now PPD

SLRP Deal

Artist earns a % of Suggested List Retail Price

Profit Split

artist and label agree to split any profits after expenses are paid

Types of royalties paid on sales

artist royalties (recording)

mechanical royalties (songwriting)

Types of royalties paid on streams

Artist Royalties (recording)

Mechanical royalties (songwriter)

Performance royalties (songwriter)

WHta percentage does Spotify payout to rights holders?

70

Does the master recording earn more from interactive streaming or composition?

interactive streaming