Music Business Exam i
Terms
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- Unlike other businesses, your income years may be ______, so you need to take the concentration of money and make it last a lifetime.
- limited
- elements of professional team for artist
- personal manager, business manager, lawyer, agent
- commission of personal managers
- 15-20% of gross
- term of personal managers
- 3-5 years
- termination triggers for personal managers
-
failure to earn specified money
failure to sell specified number of albums - artist should resist giving managers ______ of _______ at all cost
- power of attorney
- sunset clause
- how will fees be handled on residual activity after term ends?
- Artists should eliminate as many _______ _________ as possible- having these makes it more difficult to hire new personal managers
- sunset clauses
- duties of business manager
- handles your money
- compensation for business managers
- usually a percent of gross with a minimum fee
- True/False: No official credentials are required to be a business manager
- TRUE: Make sure to check credentials
- E & O Insurance
- Errors and omissions insurance; pays you if the business manager mishandles your affairs
- often the most experienced in the industry because they represent many people and are involved in many deals
- lawyers
- lawyer fees
- could be a flat fee, or a percent of a deal they negotiate,
- lawyer term
- should not be bound by any specific timeline
- agent function
- to get artist booked
- agent fee
- 10% cap is regulated by its related union
- agent term
- 1-3 years, negotiate for the SMALLEST term possible with an option out if certain earning goals are not achieved
- exclusive artist agreements
- record deals
- most record companies hire relatively ___ people
- few
- role of distributors is shrinking due to ______ _____ _________
- electronic transmission downloads
- own their own distribution systems, may also own major-distributed indies
- major labels
- do not use major distributors
- independent labels
- PPD
- published price to dealers;each royalty known as a "point"
- new artist rates
- 13-16% (under 100,000)
- midlevel rate
- 15-17% (250,000- 500,000)
- superstar rates
- 18-20% (a million + copies)
- wholesaler that sells physical copies of records to stores and also sells digital music
- distributor
- eye and ears; find and nurture new talents
- A & R
- Big Box Retailers
- Target, Best Buy, Walmart
- SRLP
- suggested retail list price
- pays a sum for artist, keeps royalties until it gets money back
- advance
- involve charging the artist a percentage to pay the producer
- all-in deals
- all in deals are a __________ cost
- recoupable
- Advances are ___-_________
- non-returnable
- If not enough albums are sold, record companies bear the cost. As a result, advances are _______ income even though they may later be recouped
- taxable
- future album success can repay unpaid recoupable costs from a previous album
- cross-collaterization
- newest version of royalty calculation
- PPDxRoyalty Ratex Quantity
- record company can opt to pay artist off at some pre-negotiated point and not actually make an album
- Pay or Play provisions
- most contracts specify a commitment to record one or two albums (firm) and hold an option for more
-
firm vs. option albums
- Options are good/bad news for the artist.
- Bad.
- how long an agreement lasts
- term
- record companies will only take records they can sell, known as...
- commercially satisfactory
- must be of a smilar style to previous albums
- technically satisfactory
- allows artist to get out of the deal if company does not release an album
- guaranteed release
- True or False: Guaranteed release is automatically included in a record deal.
-
FALSE. Must be negotiated
- keeps artist from recording with another company during the deal term
- exclusivity clause
- prohibits recording the same song with another company after deal term expires
- rerecording restriction
- allowed with restrictions including being truly in the background
- sideman restrictions
- primary function is to promote sale of records, creative control is very limited
- videos
- paid to AFM, MPTF, and AFM Special Payments Fund by record company, not the artist. NOT recoupable
- union charges
- similar to HArry Fox on webcasting, relatively only organized part of electronic transmissions
- Sound Exchange
- a production company acts as a buffer between artist and record company; "quasi company" in between
- Loan-out corporations
- similar to loan outs except they are real companies not owned by artist; take a percent of the royalty paid to artists
- independent Production Company
- they act as manufacturer and wholesaler; you effectively act as the record company and assume the risk and returns
- press and distribution deal
- Electronic Transmission Royalty Formula
- Wholsesale Price x True Artist Rate x amount sold
-
Responsible for overseeing & bringing the creative product into a recording. Combines both administrative & creative skills.
- record producer
- miniature record deal where the company fronts the money to record the artist’s demo.
- demo deal