Music Business

What is most essential for an artist’s team?

Communication

What does a personal manager/manager do?

The central person in an artist’s career, the liaison between artist and rest of world, a gatekeeper & negotiator, advise and counsels the artist

Ideal manager skills:

-experience and connections

-loyalty, trust, honesty, charisma, intention

-shared vision

Ideal artist skills:

-Punctuality

-Motivated

-Identity

-Open to feedback

-Innovation

-Talent

-Image

-Consistency

Fiduciary Duty

right to expect the best possible level of treatment and ethics

Management Agreement

-Manager or manager’s lawyer presents agreement to artist

-Artist takes agreement to lawyer to review

-Initial “year” contract + extension for said term

-Benchmark = the bare minimum that should happen for the manager to have the right to extend the agreement

-Record deal terms can fluctuate depending on the label – they will keep an artist until they make their money back

How much does a manager take from artist?

15-20% Gross Earnings in Ent. Industry

What is excluded from management commission?

-Recording costs

-Video costs

-Tour support

Sunset Clause

manager has the right to continue commissioning from the deals that were put in place during the management agreement (at a reduced rate)–even after agreement has expired

Key person clause

artist has the right to leave company if their manager leaves the company

Power of attorney clause

the manager has the right to sign off on contacts and make decisions on behalf of the artist

Business Managers

-Business managers has no creative involvement, strictly financial–almost always an accountant / CPA

• Taxes

• Investestment

• Budgeting

• Planning

-Business managers usually get 5% of an artist's earnings from ent. Industry (can get a flat fee)

Agent

-The person tasked with finding employment for the artist

-Agents must be licensed in the state they are working in

-Must pay a deposit into escrow acc

-The escrow account in maintained by agent

-Agents get 10% on performances

Attorney/Lawyers (trial or litigation)

-Most lawyers work on deals, contracts, etc.

-By the hour better for lawyers so there is no conflict of interest (sometimes earn a % of the deals they handle)

Tour (road) Manager

-Takes care of accommodations, transportation, food, interviews, Q&As, etc.

-Understands artist’s preferences and needs

-Hands out per diem (daily allowance for band)

-Allocates tickets to those in a position to advance the artist’s career (other artists + journalists)

-Gets paid salary

Production Manager

-Focuses on the aesthetics of a performance/show

-Gets paid salary (some MIGHT earn % of tour profit)

-Artist pay production manager even when off tour to gain loyalty

Promoter

determines ticket prices – gets people in seats / in the room

Song vs recording rights

Song has one set of rights and then the recording (musical composition vs master recording)

Crew

instrument techs, sound and light technicians, choreographers, drivers, security, chefs, tour accountants, and many more

What are the changes in industry?

-decline of record sales

-increases in streaming and other new technologies

-increased importance of touring, merchandise, sponsorships, & brand affiliations

Elements of recording:

1. Pre-production (where most artists try to everything so they don’t have to use as much studio time)

2. Basic tracks (starting with drums —> guitar —> bass —> keys)

3. Overdubs (layering)

4. Mixing (taking the separate tracks and figuring out how to put them together

5. Mastering (sonic polishing)

Producer

-Job is to hear what isn't there, but should be

-Producer helps the artist create the best sound/performance possible

-Producer can also be a co writer

-The producer has to know what is happening musically and personally

-The producer has the know where/what location to maximize the best sound/performance

-Must have good people skills and be able to deal with emotional as well as musical moods

-Deals with creative issues, selection of studio, musicians (if band is not wholly self-contained),

Audio Engineer

-Answers to the producer

-Manages plug ins, microphones, equipment set up

-Make sure the sounds are right

Executive Producer

not necessarily a creative role; often the title is given to the person who secures the financing for the project

Arranger

helps map out what is going to be performed

360 Deals

when record label participates in income from artist’s other income streams (music publishing, touring, merch, etc.)

Key label staff

A&R, marketing, business affairs, sales, accounting, etc.

Technically and commercially satisfactory

• Technical = accuracy of music being recorded and reproduced (recording mirror what happened live)

• Commercial = when the label gets to say “I don't know if it will do that well in the market place”

What do record labels do?

Labels assist artists by connecting them with a larger network of artists, producers, etc. beyond helping them with actual technicals

Indep. Label (smaller, indie label) vs Bigger label (Universal, Sony, Warner)

• Indie: more personalized attention & more creative control for artist & more invested interest (more to lose for label)

• Major label: more expansive network and connects but takes a larger stake in income

Advance

When an artist signs, they are typically given an advance → they are recoupable (must break even) → then they start making royalties

Mechanical royalties

are paid by the record company to the songwriter and music publisher

Controlled composition clause

if the writer is also artist then they are making less than the mechanical royalties

Can an artist sign with more than 1 record?

No

DIY artists

-Sometimes artists choose to create a legal entity, like a limited liability company (LLC), to serve as their own record label.

-A simpler approach might be to establish a fictitious name, sometimes also called a doing-business-as (DBA) name, and conduct business in that name as a sole proprietorship.

A & R

A&R executives are responsible for evaluating and managing creative aspects of music, so they are the ears for their label employers. A prime responsibility is discovering and signing new talent

pressing and distribution (P&D)

A deal where a record label or company manufactures (presses) physical copies of music and distributes them to stores or platforms, while the artist or another label retains ownership of the recordings

Personal Services Term

The length of time that the artist must perform the personal service of recording for the record label

Minimum Delivery

-The artist will be required to record a minimum number of tracks (called sides) that are considered acceptable in each contract period

-The contract will define what is acceptable

Cross Collateralization

when a positive amount of money is used to offset a negative monetary balance, the two amounts are said to be cross-collateralized

SAG-AFTRA Agreement

-applies to all singers on a recording, including featured artists, backup vocalists, soloists, full choirs, and sound-effects vocalists

-the contract addresses wage scales, working conditions, health and retirement contributions, digital exploitation payments, and re-use payments

Where can you make money touring?

• Hard ticket sales

• VIP ticketing sales

• Merch

• Live stream monies

• Public performance monies

• Tour sponsorship money

• Licensing monies

• Recorded and publishing monies

Budgeting

• Meals

• Transportation

• Lodging/Hospitality

Soft ticket event

artists performing not correlated to ticket sales

Radius clause

dictates a geographical area where you may not perform during a specified time frame surrounding an event–used to make your appearance exclusive to that event so that interest isn’t diluted; don’t want their tickets cannibalized

promoter

• Needs to budget for venue and the artist

• take the risks, pay the acts, promote the shows, and sell the tickets

• They risk receiving less money from ticket sales and other revenue sources than they will pay out in expenses

best-known national concert promoters

Live Nation, Another Planet Entertainment, Anschutz Entertainment Group

Contract vs Rider

A contract is prepared by buyer has a specific set of terms that govern an engagement whereas a rider is prepared by the artist and covers the same needs from show to show

Contract

discusses the who, when/date, time, duration, city regulations/curfew, union, location, compensation

Force Majeure

a weather emergency, strike, event beyond control of parties – in the event of an emergency/unforeseen events, parties are free from obligation

Photo/comptix

free tickets

Indemnity

if there is a legal judgement against me then you're gonna cover it; a clause that protects people from being out of pocket from the expense of someone else's misdeeds

Rider

list of specifications that an artist needs for each show — typically has sections covering hospitality, technical requirements, security, merchandise

What kinds of tools do artists and their teams use to generate attention and drive sales of tickets, recordings, merchandise, etc

• issuing press releases, providing entertainment news outlets with video and audio clips, and generating favorable news coverage by making artists available for press interviews

• artists market through their fan club websites and social media pages, and venues and promoters market through their own company websites and social media pages

• giveaways

• connect their profile to listings of their concerts on ticketing sites

• Broadcast television advertising can be useful if the goal is to reach a broad audience within a station’s geographic area

• Radio

• Email list

• Print media

• Sponsorships (consumer goods, record company, radio station)

• Private concerts

Master use license

Master recording owned by label

synchronization license

Musical composition/song owned by publisher or songwriter

Music supervisor

• picks the song/finds music for a movie

• Negotiation about costs/money/budget

• All about willing buyer/willing seller

Compulsory license

anyone can legally record and release a cover song without permission from the copyright owner – you just pay royalty fees no need to contract the right holders

Fair use

a legal doctrine that allows limited use of copyrighted material without permission from the rights holder for specific purposes like criticism, commenting, reporting, teaching, etc

Safe harbor

protects platforms from getting in trouble when someone else uploads copyrighted content

Band Agreements

• Publishing

• Money (income split regarding different kinds of income)

• Outside interests

• Ownership of name/ownership of equipment/assests

• Who does what

• Adding members/letting go

Copyright

• protect individual creative works–protects against unauthorized use, encourages creative expression

• Life of author + 70 years

Trademarks

• marks of commercial identification (words, slogans, designs, etc) – protects owner + public from unfair competition

• Eligibility to get a trademark = interstate commerce

Patents

Rewards novelty and utility and subject to renewal

Distinction between "sound recording" and "musical composition"

musical comp = the underlying song itself/the creative work whose copyright is typically owned by the songwriter, composer, and/or music publisher

sound recording = a specific recorded performance of that song whose copyright is typically owned by the record label

(ex. recipe vs the cooked meal)

master

sound recording

What are some of music's main areas of impact?

• Entertainment

• Commerce – source of income for artists, songwriters, producers and countless other members of the team and industry

• Storytelling

• Builds community / brings people together / breaks down barriers

• Conveys a message

• Expresses emotion

• Relieves stress

• Self- expression / conveys emotion

• Raises funds and awareness re: social issues and charitable causes

• Motivation

• …. many more

Different elements of planning and executing a tour

• Rehearsals

• Booking

• Negotiation

• Advancing

• Transportation, accommodations

• Sound check, planning set lists

• Budgeting,

• Routing

• Settlement

• Security, etc.

voluntary license

the licensee has to request permission from the owner of the work, and if the owner does not want to grant it, the music cannot be used

Public performance royalties

• A public performance such as a concert (or any other type of event featuring copyrighted music, recorded or otherwise) triggers an obligation to pay songwriters (including com-posers and lyricists) and music publishers a fee collected by a performing rights organization (PRO).

• In rare cases where music is not regularly presented at a venue, the promoter (not the venue) may be responsible for paying the PRO

ASCAP was founded largely in response to the U.S. Copyright Act of 1909, which granted exclusive authority over public performances of musical works to copyright owners

BMI traditionally embraced songwriters of musical styles that had not been previously represented by PROs

ESAC is the smallest of the three oldest U.S. performing rights societies, and the company asserts that staying small allows it to provide more personal attention for the more than a million-song catalog (invitation only)

Publisher

Helps songwriters make money from songs through placements, licensing, and royalty collection

Publishing Deal

Common for newer writers. Writer keeps 100% of the “writer’s share,” while publisher gets 100% of the “publisher’s share”

Writer’s Share

The portion of songwriting income paid directly to the songwriter

Publisher’s Share

The portion of songwriting income paid to the publisher

Co-Publishing Deal

Common for more established writers. The publisher’s share is split between the publisher and the writer’s own publishing company

Administration Deal

Publisher manages royalties and song rights but does not own the songs. Publisher usually takes a 5–15% fee.

Publishing Company

Company that manages songs, licensing, and royalty collection for songwriters.

Guarantee

• A fixed, non-refundable payment paid to the artist

• The artist gets this amount regardless of ticket sales or profits

• Common when the event is free and or tickets are subsidized by a charity or student activities fund

Percentage Deal

• The artist is paid a percentage of ticket sales (box office revenue)

• Payment depends on how well the event performs

Percentage Versus

The artist receives whichever is greater:

• a guaranteed minimum payment or

• a percentage of the box office

Percentage Plus

The artist receives:

• a guaranteed fee plus

• a percentage of ticket sales

Per-Ticket Deal

The artist earns a set amount for each ticket sold