midterm Flashcards
If a record flops, does the artist’s recording contract typically require that the artist return the advance paid by the label?
no
what is one word to distinct the difference between a major and an indie?
distribution
what is one main role of a record company?
marketing
Before producer or other third-party royalties are paid, what is the name of the type of royalty payable to the artist?
artist “all-in” royalty
does a so-called “True Indie” have a major label distribution deal?
no
what costs are never recoupable?
manufacturing
The Promotion department at a record label oversees which of the following areas?
getting radio airplay
When a record company uses artist royalties to pay itself back for costs it paid, those costs are said to be what?
recoupable
is “Cross-collateralization” the term for a record company’s ability to recoup any cost out of any royalty otherwise payable to the artist?
yes
what is the duty of the attorney?
Draft artist’s publishing agreement
what is the duty of the personal manager?
Establish strategic partnerships with other companies or brands
what is the duty of the business manager?
File the artist’s taxes
what is the duty of the agent?
Book live performances for the artist
what does an agent receive as compensation?
10% commission
roles of an attorney
Draft contractual language
Negotiate a live performance agreement
Offer advice on how to close a deal
what does the artist manager oversee
artist’s branding and image
do talent agent commision their client’s income on a net basis?
no
What provision in an artist’s management contract provides an income stream for the manager after the contract has ended?
sunset clause
If a manager wants to start booking performances on behalf of their client, should they check to see if the law in their state requires them to get agency license?
yes
are talent agents typically licensed by the state in which they operate their business?
yes
What is the typical commission a personal manager receives?
15-20%
On what basis do managers typically commission their clients’ earnings, gross or net?
gross
If the MRC in a recording contract provides for 2 firm LPs plus 4 options, each for 1 additional LP, how many records can the record company potentially get from the artist if it were to exercise all of its options?
6
describe what a re-recording restriction is meant to prevent.
It is meant to prevent the artist from duplicating their masters for somebody else directly after the term is over.
does the artist have the right to exercise options in their recording agreement?
no
What does “MRC” stand for as used in a standard artist recording agreement?
minimum recording committment
In a major label record deal, does the record company typically owns the masters?
yes
who owns the masters in a major label deal?
the label
T or F: The exclusivity clause in an artist’s recording agreement permits the artist to self-release their live performances.
false
Which of the following terms is mostly likely found in an indie record deal?
50 / 50 profit split
As used in a standard artist recording agreement, the term “option” refers to which of the following?
An additional album the artist may be asked to deliver.
As used in standard artist recording agreements, the abbreviation “MRC” stands for which of the following?
Minimum Recording Commitment
T or F: The “pay or play” provision in an artist’s recording contract allows the label to terminate the deal if they pay the artist a set sum of money.
true
From the consumer’s perspective, what one word describes the difference between interactive and non-interactive streaming?
choice
In general, what amount in total do Digital Service Providers (DSPs) pay out to rightsholders in connection with streaming music?
70% of gross revenue
The “royalty pool” method of calculating artist streaming revenue consists of
applying the artist’s contractual royalty rate to a share of revenue proportional to their individual streams in comparison to all streams across all labels and artists.
Spotify is an example of what type of streaming service?
interactive
A “user-centric” royalty calculation is a
proposed method of determining artist streaming revenue that would include individual user data when computing payouts to artists.
Describe the role of a record producer.
A producer’s role is bring a tangible creative product, maximize the creative process, and administer the whole project.
Which of the following most closely describes a record producer’s primary role?
Overseeing and managing the creation of an artist’s sound recordings
If a producer is to receive an advance against royalties as compensation for their work, what is the typical royalty percentage they can expect?
3-5% of the artists share of the master recording
Name a skill of a record producer.
A record producers has to be able to book studios and hire musicians while staying within a budget
Why is it important for a producer to have well-developed social skills?
A producer must have well-developed skills so that they can keep the project on track and keep the artist focused so that the project actually gets finished on time and in good shape.
Production deals are risky for the artist because
they are expected to give up the same rights as in a recording agreement, but to a company that may not have a distribution deal.
A joint venture typically has financial terms…
better for an artist than those in a royalty deal.
Briefly describe a reason why an artist might wish to form a loan-out company.
An artist may wish to form a loan-out compant because it only loans the services to others for recording, concerts, etc. and it can protect the artist because if someone sues the artist over a record-related claim, they can only take from the record money and not the artist’s personal bank account.
Briefly describe why an upstream deal might make sense for a developing artist.
because when an artist is upstreamed, the distribution label will move the records from the indie label to the major label, which can help a developing artist generate more publicity and money because they started as an artist on an indie label and then became an artist on a major label through the process of upstreaming.
What are two pros of signing a production deal?
The artist can get the same royalty calculation the production company gets.
The production company may be owned by a real industry player who has tremendous clout.
what is the music business
a complicated, interconnected system of creators, rights holders, intermediaries, and consumers, all trying to make money from products and services either directly or indirectly derived from the creative process
business philosophy
be self aware learn about the business negotiate don't bank on it you're still in charge
What is an artist manager?
Responsible for oversight of artist’s entire career
manager’s role
Big Picture Content Management Marketing/Promotion/Sales Operations Communication
gross
before expenses
net
after expenses
sunset clause example
Example: 15% of gross earnings in the first year following termination, decreasing to 10% for the second and 5% for the third.
what is in a manager’s contract?
Duties / Agency Waiver Exclusivity Term Power of attorney Handshake deals
Name the most important role for each member of an artist’s team
manager - oversees everything, entire career
attorney - legal aid and advice
agent - booking performances
what has changed about the music business
Monetization strategy
Revenue distribution
Consumer spending
The product
new monetization strategy
Then: brands sold products
Now: brands sell subscriptions
who is on the artist’s team
Manager
Booking Agent
Attorney
Business Manager
What do you look for in a team?
Trust
Confidence
Communication
Transparency
what to ask your potential team members about
Experience Philosophy Roster Contract Compensation
who is the first member of the artist’s team
manager
booking agent compensation
commission, 10% of gross
no posts-term
manager compensation
small percent
flat fee
combination
why do booking agents need to be licensed
so that they know just what they are actually doing and what to ask for
differences in team compensation
agent - 10%
manager - 15-20%
attorney - hourly, percent, retainer, value biling
what is in an agent’s contract
territory
excusivity
Why is an advance considered to be a pre-payment of royalties?
it is payed before any royalties are made, payed in “advance” meaning before
What are the practices that record companies use to mitigate their downside risk?
recoupment, advances, sunset clauses, options
How does a record company’s exclusivity affect an artist who is invited to feature on another’s single?
they can mostly have features from within the major company or family companies under the major
Who gets to exercise the options in a recording contract?
the record company, not the artist
Why are options so important for a record company?
to maintain financial stability if an artists mrc albums flop, they’re not required to record any more, but if the artists mrc albums are successful, the company can make even more of a profit
What are the implications for an artist of a term that is not measured in time, but in albums?
they have to make their albums timely and to the best of their ability
“pay or play”
company doesnt have to release a record
guaranteed release
company doesn’t have to release a recoord
why do controlled composition clauses exist
so that the record company can owe the artist less money and keep it for themselves
If a producer co-writes a song with an artist who has a controlled
composition clause in their recording agreement, how might that
affect their ability to collect mechanical royalties?
they’ll receive less in royalties
