MBUS 3010 - Record Deals

Tracking, Overdubs, Mixing, and Mastering

What are the four phases of the Recording Process

Tracking

recording the basic track of the song(s). Also known as rhythm track, band track, backing track. Creation of beat.

Overdubs

recording of additional parts on top of the original track. Harmonic and melodic instruments, percussion, vocals.

Mixing

blending of all of the recorded sounds into one stereo track. balancing levels. signal processing. transferring the mix to the format of your choice (WAV file, 1/2' analog tape, 1/4' analog tape, CD-R --> not done anymore)

Mastering

making the master copy from which the various formats (mp3, cd, vinyl, etc.) are replicated. encoding digital information such as track name, track number, artist, length, IRSC code/ Level matching b/w tracks. final signal processing, aka "Sweetening"

Manufacturing

CD replication, CD-R Duplication, Vinyl Pressing, Cassettes Duplication

1. Master Lacquer

2. Metal Master

3. Metal Mother

4. Metal Stamper

5. Pressed LP

What are the parts of vinyl pressing

master; lacquer

Vinyl Pressing Process:

1. ____________ & ______________

master & mother

Vinyl Pressing Process:

2. ____________ & ______________

stamper & mother

Vinyl Pressing Process:

3. ____________ & ______________

stamper & record

Vinyl Pressing Process:

4. ____________ & ______________

Majors, Major-owned independent, and independent

what are the types of record labels

UMG (Universal), WMG (Warner), Sony

3 major labels

alternative distribution alliance (ADA) - WMG

ingrooves - WMG

the orchard - sony

major-owned independent

reaches more people

physical & digital distribution

what are the advantages of major labels

4AD, Merge, Sub Pop, New West, Big Machine, Orange Twin

independent label

no money & no exposure

disadvantage of independent labels

secretly distribution, empure, tunecore, cd baby, song flow

independent distibutors

places music on all streaming services; not curated (anyone can use); charge either: monthly fee, annual fee, per release fee, or % of revenue generated by streams

digital aggregators

rack jobbers

distributors that run the music department of a retail outlet that is not exclusively a record store (urban outfitters, target, book store, etc.)

commercial outlets for recorded music

interactive streaming, non-interactive streaming, radio, brick & mortar retail, online stores, direct to consumer, licensing

interactive streaming

commercial outlets for recorded music:

apple & spotify

non-interactive streaming

commercial outlets for recorded music:

pandora

brick & mortar retail

commercial outlets for recorded music:

wuxtry, deadman, etc.

online stores

commercial outlets for recorded music:

individual websites by artist

direct to consumer

commercial outlets for recorded music:

amazon, etc.

Streaming

artist sends mastered recording to label

label sends to distributor or digital aggregator

distributor/aggregator uploads to streaming services

streaming pays distributor/aggregator

distributor/aggregator pays label

label pays artist

Retail Outlets

artist sends mastered recording to label

label sends to distributor

distributor sells to retail outlet

retail outlets pay distributor

distributor pays label

label pays artist

Radio

artist sends mastered recording to label

label promotes artist's music to radio programmers

radio station plays music

radio stations pay blanket license fees to PROs (ASCAP, BMI,ETC.)

PROs pay songwriters & music publishers

artists & labels do NOT get paid for broadcast of recordings

Direct to Consumer (D2C)

record labels and independent artists have website

market offerings to public

fans order from websites through payment processor (credit card, venmo, paypal)

payment processor sends money (minus service charge) to artist or label

orders are shipped in one of two ways: directly from artist or label and fulfillment company

(single most profitable)

Licensing

film, tv, commercials - most lucrative, games, theme parks, karaoke machines, etc.

Licensing Payment

fee is paid by user to rights holder

users - filmmakers, show producers, brands, theme parks (cataloged, pay PROs), karaoke machine makers

rights holders - 1. recording - record label or artist; 2. song (composition) - music publisher or songwriter

there may also be royalties, depending upon type of use

Gold Record

500,000 sales or TEA

Platinum Record

1 million sales or TEA

Diamond Record

10 million sales or TEA

TEA

track equivalent album - billboard charts use

typically 10 track downloads = 1 album

catalog

more than 18 months old & has fallen below position 100 on billboard 100

active roster catalog

catalog by artists still releasing music on a label

billboard artist 100

combines performance across the Hot 100 chart, the billboard 200 album chart, and the social 50 chart

billboard 200

album chart; combo of sales (retail & digital) and TEA

billboard social 50

ranks artist by recent social media activity; complied by next big sound; based on weekly additions of friends, fans and followers, along w artist website views & streaming media

next big sound

provides analytics for online music; analyzes popularity of musicians in socials, streaming and radio

functions of a record label

a & r

catalog

sync or film

production

finance

business affairs

international

graphics

promotion

PR

sales/marketing/digital marketing/digital

strategic marketing

product management

A & R

functions of record label

artist and repertoire; select talent; sign artists

catalog

functions of record label

market department for back catalog

Sync or Film/TV/Games

functions of record label

license recording for sync use

Production

functions of record label

collect different versions, delivery to DSPs, vinyl/cd mfg, ensure credits are correct, collect final edits, etc.

finance

functions of record label

compute and pay royalties

business

functions of record label

legal

international

functions of record label

everything overseas

graphics

functions of record label

all graphic design (cover art, posters, logo, etc.)

promotion

functions of record label

radio/independent radio is most common (college radio) (invented after payola)

Public Relations (PR)

functions of record label

in house, sometimes supplemented w independent firm

sales/marketing/digital marketing/digital

functions of record label

create campaigns around new releases

strategic marketing

functions of record label

brand partnerships, endorsements, sponsorships

product management

functions of record label

handle logistics... coordinate it all

true

if an album does not sell but there are more records in the deal, they can still drop you without seeing out the contract and artist keeps advance

how long is this deal, who owns what, how are we splitting up the money, is there any money up front, re-recording restrictions

what do record contracts contain

term

length of deal; years or albums?

typically, a specific number of albums

album cycle - 18 to 36 month period after the release date of an artists album

typically, will be a combination of "firms" and "options"

can be one record or 10 records... just depends

at the end of album cycle, the record label has a certain amount of days to "exercise their 'option'" if they do not, the artist is a "free agent"

Ownership of Masters

ownership deal

license deal

most major deals are ownership deals (notable exceptions are R.E.M., Bruce Springsteen & Taylor Swift

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

a master

original studio recordings (multi-tracks), finished recording of a particular song (cuts)

re-recording restrictions

most record deals contain a re-record clause stating a time period in which the artist may not re-record any of these songs on their releases through the label

once the re-recorded clause expires, the artist may record and release new versions of the same songs (see TS)

traditionally were 5-7 years

post taylor swift, they are now much longer. generally 10-25 years, occasionally as long as 30 years

how you get paid

ownership of masters determines the type of deal that you are given

if the artist or producer owns the 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

if the label owns the master

label commercially releases and distributes

label pays the artist a percentage of sales, aka royalties

Types of Royalty Structure

SLRP

PPD

Profit Split

SLRP - Suggested List Retail Price

artist royalty is a % of suggested list retail price (old school... almost gone now)

PPD - Published Price to Dealers

artist royalty is a % of published price to dealers

Profit Split

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

advance

money we get up front

label pays artist an _______ payment of future royalties

generally used as recording budget

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

advances are non-returnable on record deals

advances are cross-collateralized

non-returnable

when a label pays an advance to an artist, that is essentially a payment of artist royalties in advance

As the recording generates income, the artist royalties are kept by the label until the advance has been repaid.

This repayment is known as RECOUPMENT.

how advances are paid

the label pays part of the advance when the production of the album begins (this is known as the front end of the advance)

the label pays the remainder of the advance when teh album has been completed & accepted by the label (this is known as the back end of the advance)

the album is accepted by the label once it has met any delivery requirements

some artist take smaller advances in order for investments to be made

if the label doesn't love the album, you are NOT getting your money

Cross-Collateralization

when an artist signs a multi-album deal, all advances MUST be recouped before ANY royalties are paid

multi-album deals are ALWAYS cross-collateralized

unrecouped advances do not follow an artist from one record deal to another, unless the second record deal requires that the new label buy the old label, at which point, the unrecouped advances would be changed to the artist's royalty account

ex: 3 album deal

album 1 is 50,000 unrecouped

album 2 is also 50,000 unrecouped

when the artist starts album 3, they are starting at -100,000

thus, if album 3 earned the artist 100,000 in royalties, they would be at 0.00

Artist Royalties for sales

the artist earns a royalty anytime the label sells a copy of a recording via physical media or download

can be one of the three:

PPD deal, SLRP deal, Profit Split

penny rate

the actual monetary amount an artist gets paid per transaction

base price

the basis from which a royalty is calculated

base rate; penny rate

10% royalty on sale w _______ ________ of 1.00, your _____ _______ is 0.10

types of royalties paid on sales

artist royalties (recording)

mechanical royalties (songwriting)

artist royalties

paid by label to artist

mechanical roaylties

songwriting royalties; paid by label to music publisher who then pays singer

Types of Royalties Paid on Streams

artist (recording)

mechanical (songwriter)

performing (songwriter)

Artist Royalties (recording)

DSP >> LABEL >> ARTIST

Mechanical Royalties (songwriter)

PUBLISHER >> SONGWRITER

Performing Royalties (Songwriter)

DSP >> PRO >> SONGWRITER & PUBLISHER (@ same time)

Streaming Royalties

streaming services pay a % of gross revenues out of rights holders

for the artist, the service pays the label, who pays artist

typically, 20-25% of what label gets

royalty may be the same as physical royalty percentage (PPD, SLRP, Profit Split)

84.9; 15.1; 15.1; license; PROs; streaming mechanical; that the master recording earns more than composition

spotify payout:

______% to master recording

______% on publishing/song

of that ______%, part of it is the blanket ___________ fees that spotify pays to the ________

the remainder pays _______________ ____________ royalties

what is the key takeaway from this?

EMI

What label sold their divisions into three separate portions to the major three labels

Yes

can independent labels be distributed/owned by major labels

Universal

of the big three, which label has the biggest distribution

artists, labels, and session musicians

who does soundexchange pay

label

soundexchange:

50% goes to

featured artist

soundexchange:

45% goes to

AFM to pay session musicians

soundexchange:

5% goes to

SEA

Stream Equivalent Album

Typically 1500 on-demand audio and/or video streams