Survey of The Music Industry Week 3

Question 1

Royalties;

Answer 1

payments made to the owner of a copyrighted song or recording in exchange for the right to use it.

Question 2

Record Producer

Answer 2

The role of director

Producer in the motion picture field

Question 3

Producers Royalty

Answer 3

Recording costs are recouped (regained) at the artist’s net rate

Until recording costs are recouped, the producer gets no royalties at all

Once recording costs are recouped, the producer gets paid on all monies

Question 4

New Producers:

Answer 4

Anywhere from zero to $7,500 per recording. If the producer is doing an entire album, advances are anywhere from zero to about $30,000 per album.

Question 5

Letter of Direction

Answer 5

which is a letter from the artist to the company that takes way too much legalese to say, “Please pay my producer (and deduct it from me).”

Question 6

The fraction

Answer 6

For example, if the artist’s all-in rate is 12% and the producer gets 3%, the producer would get three-twelfths (one-fourth, or 25%) of the artist’s receipts. This percentage is often referred to in contracts as the fraction.

Question 7

Recording Funds:

Answer 7

The higher the recording costs, the worse for the artist

Question 8

Electronic Transmission:

Answer 8

Not physical form of media

Question 9

DSP

Answer 9

Digital Service Provider

Spotify, Apple music, etc.

Question 10

DPD

Answer 10

Digital Phonorecord delivery

A transmission to the consumer that allows the buyer to download music for later use

Question 11

EULA

Answer 11

EndUser License Agreement

At the bottom of agreements in small font, it says that the downloads are only for your personal, noncommercial use.

Question 12

Tethered downloads

Answer 12

Provider doesn’t give you control of downloads

Will probably cost more

Question 13

Synchronization and Transcription Licenses

Answer 13

License to use a recording in time synchronization with visual images

Question 14

Monetized

Answer 14

If an app is monetized, meaning it generates money after the initial download there may be a revenue share on top of the fee, running anywhere from 15% to 35%.

Question 15

Intra-company rate

Answer 15

A royalty that the foreign distributor pays the U.S. company for distributing a record

Question 16

ARPU

Answer 16

Average rate per user

Question 17

Pro ration

Answer 17

Your royalty is in proportion to the number of cuts on the album

Question 18

Master

Answer 18

Final recording of a song in a studio

A recording of one particular (even a demo can be one) song

Question 19

Royalty computation

Answer 19

Royalties are the sums paid to rights-holders when their creations are sold, distributed, embedded in other media or monetized in any other way.

Question 20

Basic Royalty Computation

Answer 20

1) Artist royalty is a percentage of wholesale price or PPD (published price to dealers)

A point = 1 royalty percentage

Question 21

MSRP (Manufacturer suggested retail price)

Answer 21

Businesses can suggest to discount it

Question 22

Advances/Recoupment

Answer 22

An advance is a pre-payment on royalties to an artist

Question 23

In the red

Answer 23

Money that is unrecouped is a deficit (when an amount of money is too small) (or in the red)

Question 24

In the black

Answer 24

Once an artist recoups they are in the black

Question 25

Cross-Collateralizations

Answer 25

Means your albums’ profits/losses are recouped against each other

Companies also try to cross-collateralize sequentially (meaning across future recording deals)

Question 26

Real life numbers

Answer 26

Royalty range:
New artists - 13-16% of PPD (published price to dealers)
Midlevel - 15-18% of PPD
Top artists - 18-20%+ of PPD

Question 27

Streaming

Answer 27

DSPs can’t pay more than what it’s already set
Every DSP has a set price for everything

Question 27

360 Rights

Answer 27

Record companies want to share in the total pie of an artist’s income

Question 28

Major Deal Points - How long?

Answer 28

Term - the length of time that you have an exclusive deal with a record label
Historically 1 year, w/options w/ability to extend term if release was delivered late

Now structured as set periods of time around album releases

Deal have provisions to protect label against late delivery

Question 29

Delivery requirement

Answer 29

Delivery refers to delivering your finished album to the label

Includes the actual music + artwork/licenses/deals with producers, etc.

Question 30

Commercially satisfactory

Answer 30

Label has to get what they’re asking for

Have to accept the record

Question 31

Technically satisfactory

Answer 31

Sounds good

Question 32

Guaranteed release/release commitment

Answer 32

*Label must release your material or release you from your contract

*Can sometimes buy the material back from the label to release elsewhere

*Does online/streaming only release count?

Question 33

Producers & mixers

Answer 33

A producer is responsible for bringing creative product into tangible form

Question 34

Advanced royalty computations:

Answer 34

Wholesale

Rack Jobbers

One Stops

Licensees

Question 35

Wholesale

Answer 35

A place that buys it wholesale (directly from the distributors)

Question 36

Rack Jobbers

Answer 36

If you are in a target (for ex) and they have records, those are handled by rack jobbers

Question 37

One Stops

Answer 37

A distributor of distributors

Question 38

Licensees

Answer 38

Could be licensing your music for it to be sold