Exam 2 Flashcards
the 3 major record companies
Universal
Sony
Warner Brothers
What are the departments of a record company
A&R promotion finance sales production management new media business affairs/legal marketing international production
what is A&R
artist and repertoire, they develop the artist and find the new good music
what does promotion do
gets songs on radio
what does new media do
all the social media and streaming stuff
independent label
not owned by a major label
a true independent label
not owned by a major and financed by owners or investors
major record distribution companies
sony
warner
universal
major independent distributors
RED- under sony
ADA- under warner
fontana- under universal
what is an imprint
a division of a major label
the major source of physical CD’s
Big box stores: wal-mart, target, best buy
current definition of “records” in most recording contracts
“any device now or here after known” any kind of delivery of music for consumer use
free goods
given to retailers as a way to discount the price and stock more product
“master” as it relates to recordings
original multi-track recording
or
two track stereo master
or entire album “10 cuts”
reserves on returns
money held in case all records are not sold
an advance to a recording artist
money paid to an artist out of future roylaties
recoupment
label keeps royalties to pay the label back “deductible from royalties”
what does “in the black” mean
once the royalties are recouped
recoupable percentage of video
50%
recoupable percentage of tour support
100%
cross-collateralization
pooling of royalties earned from different albums on same contract
what does RIAA stand for
Recording Industry Association of America
what does RIAA do
certifies album sales figures
IN AMERICA what is
- gold
- platinum
- multi-platinum
- diamond
- gold: 500,00
- platinum: 1 million
- multi-platinum: 2 million
- diamond: 10 million
typical wholesale price of CD in US for royalty purposes
$9-$10
.15 of $9 is $1.35
a point as it relates to artist royalties
a 10 point artists gets 10% from each CD sold after recoup
An escalation as it relates to a recording contract
the artist gets more points as they become more successful
a 360 deal
labels get a piece of artist royalties from every areas
active interest
record label does all the work and takes some rights
passive interest
sign a record deal but artist finds all other (merch, publishing,etc)
options (in reference to recording contracts)
give the label the ability to commit to smallest obligation possible while keeping option open while getting as much product as possible
what is the trend with options
commit to two but insist to bail if first flops
does an artist get increased royalties for optional albums
yes
what is a commitment album
“firm album” an album that label ensures
types of albums that typically do not count
live albums, seasonal albums, must be recorded and released around same time
controlled compostion
Any song that the artist writes in whole or in part, or that the producer writes in whole or in part, is considered a controlled composition.
role of the producer
- oversee and maximize creative process
- finding/selecting songs
- managing recording process
- handling all administration
- creating “the sound”
typical point range in producer contract
3 or 4 off of every cd sold (come off the top)
what is the difference in how an artsits’ vs. producers royalties are calculated
artist must recoup first
producer gets point from every cd
the term “record one”
the first record sold
all in rate
the artist is responsible for paying the priducer
artists net rates
IDK
role of the mixer
take the multitrack to the final 2 track master. have alot to do with records success and everything to do with how it sounds
demo deal
done cheap with little time and money. gives the label time to decide if they want to proceed with record deal
right to first negotiation
after demo deal, if that record label wants to sign they can, even if they dont and artist goes elsewhere, artist must report other deals made before accepting them
right to first refusal
they can reject rhe offer that was brought by the artsist from another label if they had a demo deal
re-record restiction
artist cant re-record until a negotiated period of time after
what is the term from re-recording
five years from the date of recording plus 3-5 years from the end of the term
sideman performance
artists are allowed to be on other artists records
must be truly background and not featured
of featured must give courtesy of label
cannot violate re-record
territory as it relates to recording contracts
anywhere a label can sell records. never go for less than the world
international royalty rates
companies usally pay a higher rate in territories where they have ownership.
what are the major territories
United Kingdom • Australia • Italy • Japan • Holland • Germany • France
royalty for major territories
70-75%
smaller territory royalties
50-66%
soundscan
a company that collects and reports
data on how many records are sold at retail.
what is soundscan data used for
Billboard’s charts as well as being sold to record
companies and others.
digital download revenue
Labels get “wholesale price” of 70¢ per download
• If artist has 10% royalty, gets 7¢
why are digital downloads measured in wholesale for the digital downloads
Labels treat downloads as sales not licenses because it’s better to
pay the artist a 10% to 20% royalty on a sale as opposed to a 50% on
a license.
mid price records
a reduced price to encourage customers to buy old titles
typical mid-price for a $12.05 CD
$7.75-8
royalty rate for midprice
75% US rate
budget records
in budget bins and selling for under $8
roylaty for budget records is
50%
royalty rate foe controlled composition
typically 75% of the full mechanical rate of 9.1¢ per song per album
artist royalty on digital download
15 point artist gets .15 of 70 cents
full price records
A record sold in the US at full retail through the label’s normal distribution channels
schlock
yiddish for “garbage” 99 cents or less
loan out corporations
An artist forms a corporation and it’s the corporation – not the artist – that enters in to record deals.
Inducement letter
artist promises to deliver artist’s records even if loan out corporation goes bankrupt or ceases to operate
wholesale distribution entities
Record wholesalers are the major means of distributing records for
the major record companies.
one stops
One stops buy bulk from manufacturer and sell to
Mom and Pop stores (small, independent stores) in
small quantities
rack jobbers
Rack Jobbers lease floor space from department
stores (WalMart; Target, etc.) and put in racks of
records
licensees
Licensees buy a license from the label to actually
manufacture and distribute their own CDs.
videogames
only flat fee for music based games. the rst are royalty
