Survey of Music Business Final

Artist's team

Personal manager, attorney, business manager, booking agent, publicist (sometimes)

Exclusivity

Artist can only have one personal manager at a time

Role of personal manager

To further the artist's career

Who is in charge of the other members of the team?

Personal manager

If a personal manager racks up expenses. . .

They can be charged to the artist

Sunset clause

Almost all management contracts contain these. Manager wants them to be as long as possible, artist wants them to be as short as possible. Usually end 3-5 years after the term.

Personal manager fees

Out of artist's gross income. 15-20%

Business manager fees

5%, hourly rate, flat fee, or combination

Attorney fees

Hourly ($250-700), percentage (5-10%), value billing, or retainer

Booking agent fees

About 10%

Personal manager monies

Generally earns a portion of all artist's gross earnings, but artist can try to exclude publishing income

Business manager monies

Should only get a percentage of monies actually received (not earned) while BM is involved.

Agent monies

Should never get percentages of recording, songwriting, or merch incomes

Key man clause

Artist can get out of a contract if "key man" isn't involved (ex with a management company)

Power of attorney

Allows manager to sign agreements and documents one artist's behalf. Try to limit these

Role of agent

Contracts with promoters, collects and holds payments

Rider

Contracts for each appearance, handled by the agency. Prepared by artist's attorney

Conflict of interest

When two clients of the same lawyer are on opposite sides. Lawyer is required to disclose these

Waive the conflict

Ignore the conflict and proceed

Retainer

A lawyer's set monthly fee that's credited against the ultimate fee, or it's a flat fee covering all services

Business manager should be hired by. . .

The artist, and the two of them should have a personal relationship. It is a position of trust

Soundscan

A system that monitors the sale of records through retail outlets

Label departments

A&R, sales, promotion, product management, catalog/synch, production, finance, business affairs/legal, international

A&R department

Artist and repertoire. Find and nurture talent; work creatively with artists

Sales department

Get records into stores and on digital sites

Marketing department

Advertising, publicity, album cover artwork, promo videos, merch, web campaigns

Promotion department

Gets records played on the radio

Product management department

Oversees all divisions to be sure of cohesive plan & all moving in the same direction

Catalog/synch department

Try to get existing recordings placed into movies, TV shows, and commercials

Production department

Manufacturing, cover printing, assembling, & shipping physical products to distributors

Finance department

Compute and pay royalties; keep track of label income and expenses

Business affairs/legal department

Handle contracts with artists and with digital service providers, foreign licenses, etc

International department

Coordinate the release of records around the world

Artist royalty

Paid by label. For streaming income, it's a percentage. For downloads and CDs, it's a percentage of the PPD

Artist's term with label

How long the contract lasts. Now they're saying period ends 12 months after release of the last album. Label also has options

RIAA

Recording Industry Association of America. Represents record company and certifies gold and platinum album sales

Gold album

500,000 units in the US (not streaming)

Platinum album

1M units in the US (not streaming)

Multi-platinum album

2M+ units in the US (not streaming)

Controlled composition clause

Puts a limit on how much the company has to pay for each controlled composition (any excess comes out of artist's mechanicals)

Cross-Collateralization of albums

Artist doesn't get profits from album 2 until label recoups album 1 advances

Reserves

Record companies keep a portion of the royalties that would otherwise be payable to the artist until they know whether the sales to the retailer are final. None for digital downloads

Options

Label's decision to record more albums. Not good for artists. Artist's royalty percentage and recording fund amounts should increase in these periods

Matching right/Right of first refusal

Artist can look for another deal but has to let label match it

Right of first negotiation

Artist has to talk to label before making a publishing or merchandising deal with others

AFM

American Federation of Musicians - for musicians

AFTRA

American Federation of Television and Radio Artists - for vocalists and actors on live, taped, and digitally recorded media

Advance

Label pays a sum of money to artist when they sign, then keeps the artist's royalties until it's paid back

Recoupment

The process of keeping the money to recover an advance

Recording costs. . .

Are advanced by the label but ultimately paid for by the artist from recoupments

Recording fund

A set amount of money that includes recording costs and advances to artist. Whatever artist doesn't spend goes into his/her pocket

Promotional records

Records given away for promotion (radio stations, contests, giveaways). Artists don't earn royalties

Free goods

Goods given to retailers for special campaigns. Royalties are paid. Not for digital sales

Major foreign territories

UK, Germany, Australia, Japan, France, Italy, Holland. Usually 70-75% of US basic rate

Artist royalties for foreign exploitations. . .

Are reduced

360 Deals

Label wants to share in the total pie of artist's income (merch, touring, record sales, sponsorships, acting, etc)

Producer role

In charge of the recording session, finds and selects songs, gets the right sound, books studio and musicians

Producer royalties

Gets paid royalties after recoupment of recording costs, retroactive to record one. Gets paid by artist

Mixer role

Create a mix for the original release of a record, and do remixes for later versions

Mixer royalties

Usually only .5-1%. Paid like producers; retroactive to record one after recoupment of recording costs at artist's net rate)

SoundExchange

Collects and distributes royalties from digital services (ex Pandora, Sirius XM)

Sonny Bono Copyright Term Extension Act

Copyright now lasts for the life of the author plus 70 years for works created after January 1, 1978 and 95 years from publication for earlier works

Copyright

Gives the creator exclusive rights to exploit their works for a period of time

To be copyrightable, a work must be. . .

Original and fixed in a tangible form

Where is the US copyright office located?

Washington DC

What cannot be copyrighted?

An idea

5 Exclusive rights of a copyright owner

Reproduce the work, distribute copies, perform the work publicly, make a derivative work, display the work publicly

Publishing companies

Artist assigns a publisher the copyright, and publisher gets people to use songs and pay for licenses, then splits the money with the artist

Publisher administration roles

Solicit copyright usage, find users, issue licenses, collect money, pay songwriters

Roles at a publishing company

Administrator, song plugger, creative staff person

Administrator

Take care of registering copyrights in the songs, issuing licenses, collecting money, paying writers and co-publishers

Song plugger

Runs around and convinces people to use the publishing company's songs

Creative staff person

Finds writer, works, with them to improve their songs, pairs them up to create with co-writers

4 PROs

ASCAP, BMI, SESAC, GMR

Role of PROs

(Performance Rights Organizations) issue blanket licenses

Who gets paid for music on terrestrial radio?

Songwriters and publishers (NOT artists or labels)

Who doesn't have to pay public performance fees?

Movie theaters (they had really good lobbyists)

How many PROs can an artist/songwriter belong to at a time?

One (exclusivity)

Catalog

All works under a PRO

Mechanical royalties

Monies paid to copyright owners for the manufacture and distribution of records

Harry Fox Agency (HFA) & CMRRA

Issue mechanical licenses for publishers. Act like a publisher's agent for mechanicals. Collects mechanicals, sink, and other monies from record labels, but doesn't collect monies from broadcasts

Who is the leading broker of mechanical licenses in the US?

HFA

Synchronization license

License to use music in "timed synchronization" with visual images (TV shows, video games, movies, etc)

How do publisher and writer split monies?

50/50

When signing with a publisher. . .

Songwriter transfers 100% of the copyright to them for all songs written during the term, and agrees to deliver a certain number of songs

If a songwriter writes 12 songs with one other person, how many songs do they have to deliver?

24

3 Main incomes for songwriter

Mechanicals, performance royalties, and synchronization license monies

Co-publishing deals

Songwriter gets not only his/her songwriter's share, but also a portion (usually 50%) of the publishing income as well. Assigns less than 100% of copyright to publisher

Administration deals

Songwriter keeps 100% of copyright, but hires a publisher to administer their songs. Contract usually for 3-5 years. Admin takes a fee and reimburses itself for any direct expenses

Partnership agreement

Defines the rights for when the band breaks up, wants to fire someone, and who owns the name

Load-in/load-out

Setting up and tearing down equipment

Gross income

Income before expenses

Net income

Income after expenses

Tour support

Money provided by label to help touring artists. Typically 100% recoupable

Business manager tour responsibilities

Helps prepare budget, makes sure everyone gets paid, handles finances, makes sure performance fees get collected, deal with taxes

Merchandising

Selling products with an artist's name or likeness

Tour merchandising

Same as merchandising but merch may also have the name of the city where artist played

How are rights to a name obtained?

By using the name in interstate commerce

Cue sheets

TV stations keep these, which list what songs are used, how they're used, and the duration of use

Music supervisor

Coordinates music for a film, chooses songs, works with producer and director, comes up with suggestions for artists, oversees the process of making it happen, contacts creative people, marries music and film