Contracts/Industry

Question 1

Advance

Answer 1

type of loan or payment in which money or goods are given before consideration is received in return; usually with the expectation of repayment or adjustment in basis by the party receiving the advance

Question 2

Option exercise

Answer 2

right to purchase property or require another to perform upon agreed-upon terms; option is paid for as part of a contract, but must be “exercised” in order for the property to be purchased or the performance of the other party to be required

Question 3

Artist royalty

Answer 3

legally binding payment made to an individual or company for the ongoing use of their assets, including copyrighted works, franchises, and natural resources

Question 4

Producer royalty

Answer 4

royalty given to the producer of a project, usually between 3% to 4% of the record’s sales price or 20% to 25% of the artist’s royalties

Question 5

All-in royalty

Answer 5

the artist is responsible for paying the producer of the track from the amounts they receive from the label

Question 6

Recording budget

Answer 6

specify the costs that are earmarked for a project, anticipated costs throughout the project, and transfers and changes in the budget

Question 7

Recording fund

Answer 7

set amount of money allocated to the artist to cut the record and any cash surplus goes to the artist as an advance on his royalties

Question 8

Recoupable costs

Answer 8

until the label gets back the recoupable, 100% of the recording royalties will go towards making up for these expenses

Question 9

Delivery

Answer 9

the record company must approve of the finished product before release

Question 10

Technically satisfactory

Answer 10

master is technically well-made and able to be utilized to manufacture CDs, records, etc.

Question 11

Commercially satisfactory

Answer 11

label believes the album will sell

Question 12

Right of approval

Answer 12

gives the record company the right to avoid undesirable releases

Question 13

Letter of direction

Answer 13

summarizes the administration agreement that artist has agreed to and authorizes record company to start collecting money on artist’s behalf

Question 14

Controlled composition

Answer 14

clause in some recording contracts that limits how much record labels will pay in mechanical royalties for songs written, co-written, or owned (and therefore “controlled”) by the performing artist on whose album it appears

Question 15

Mechanical license rate

Answer 15

rate set forth by the Copyright Arbitration Royalty Panel for physical or digital download mechanical royalties

Question 16

Performance guarantee

Answer 16

promise that an investment will make at least a particular amount of profit

Question 17

Territory

Answer 17

geographical area in which the record label is allowed to promote and sell the artist’s album(s)

Question 18

Co-publishing agreement

Answer 18

you share the publishing with someone else (whether an individual or a company)

Question 19

Blanket license fee

Answer 19

fee paid yearly for license which allows the music user to perform any or all of the millions of works in the ASCAP repertory, as much or as little as they like

Question 20

Administration agreement

Answer 20

songwriter keeps 100 percent ownership of the copyright and pays an administrative fee to the publisher/administrator