Name the Four major Distributing companies.
What is a major-distributed indie?
It is an independent company that works under a major label, and is distributed by a major label.
Describe a True independent company?
Financed by itself.
Distributed by independent distributors
What is a “record”?
Defined as an audio device, an audio visual device & other device that is capable of transmitting sound or sound with visual images. [any kind of delivery of music for consumer use whether sound alone or w/ visuals, or by any means now known or hereafter discovered]
What’s a master?
A) Final product of the original recording made in the studio whether it is a multi track master or stereo master.

B) A recording of ONE particular song
[i.e. “This CD has 10 songs or 10 masters]

Explain the difference between mechanical royalties and performance royalties.
Mechanical royalties, are royalties commonly associated with songwrites. While performance royalties (commonly known as “artist” royalties) are given to the artist for performing the song on the recording.
Published price to dealers.
It is what the dealer pays to the record label. Currently is $12.05
Royalties are paid on ______ of wholesale
Percentage %
Free goods are _______?
Given to dealers as bonuses, premiums for free from record labels and generate no royalties.
Promotional Copies are _________?
given to Radio and promotional companies, and do not pay any royalties.
What are Returns?
They are products sent back to the label by retailers b/c they were damaged or didnt sell. * A record label wants some returns so they always have product to sell.
Explain the concept of “Reserve for Returns”?
A label would hold on to some of the money so they could credit retailers who return products.
What is a deficit in terms of Advances?
A defecit is the amount of money left in the advance that has not yet been recouped by royalties.
Name some of the other areas the companies recoup money from.
Recording costs, Video costs, Independent promotion, Tour support
In a Cross-Collaterization agreement, the company can recoup money from any area under the contract?
Escalations are NOT retroactive
T/F? Escalations apply to ALL records sold whether at a sale price or in different countries?
False. They only apply to records sold in the U.S. at the full retail price
What is an advance?
It is a set amount of money to cover any recording costs,etc. given early with expectation of being recouped through royalties.
Returns come out of an artist’s__________
Gross royalties
List the delivery requirements (9)
1)commercially satisfactory(quality you can sell.)
2)Technically satisfactory
3)Require studio recordings.
4)Has to have been recorded during the term.
5)Songs not previously recorded by you.
6)Has to feature your own performance.
7)Can’t be just instrumentals.
8)Has to be legally free & clear.
9)Songs have to have a minimum length.
Master licenses?
If someone wants to use your song in a movie, they have to get a master license to use it.
Regarding Greatest Hits albums, royalties can be ________________
Paid at the highest or lowest rate. or paid at the average amount.
Multiple Albums?
are more expensive but not twice as expensive so they dont get twice the royalties. Contracts limit the # of songs allowed on a single album so any more makes it a double album. Even though its a two record set it will only count as ONE record under the delivery requirement.
Box set royalties are _________?
Negotiated on a case by case basis
What is the DART act?
Digital audio and recording tape act.
Tax is collected at the point of sell when you buy a blank digital audio tape (not blank Cd’s)
What is a Producer?
The person responsible for putting the record into a tangible form.
Recording cost are NOT charged with producing royalties.
Collection Deals?
A deal with no advance.
A publisher can ensure collection of money from records sold in other countries through the use of ______________.
What does it mean to have all monies computed “at source”? (In regards to publishers & subpublishers)
It means the percantage remitted to the publisher from the sub must be based on the earnings in the country where earned,the source.
Unclaimed monies are often referred to as _______
Black box monies.
Joint ventures are?
Similar to a multi-artist or label deal, in which the production entity and the distributing record company are “partners” and split the income.
Loan-out Corporations?
Enter into deals for the artist and “loans” their services to others for recording & performances, etc.
Companies have you sign inducement letters or side letters which state that if your corporation _____________ then you will___________.
doesnt perform by delivering recordings; deliver them directly to the recording company.
Contracts that involve direct contact between the record company and the artist are known as ___________.
Direct agreements.
A single-artist deal is?
where the production entity makes an agreement with the record company for one specific artist.
A multi-artist deal is?
where the production entity supplies recordings of various artists.Also known as a label deal.
What are some of the negatives in a Single-Artist deal?
The production entity takes some of the royalty. It may be harder to coordinate marketing, promotion since there is no direct contact with the record company. Production entity might ask for your publishing and/or management at the same time they make a record deal. Production entity might take your money.
In a production deal the producer should give the artist rights without approval from the recording company?
List some of the differences of a multi-artist deal from a single artist deal.
There is an additional overhead payment to the production entity along with the recording fund payment. Term of the deal is usually 2-3 years firm. The # of the artists that can be signed, and the min. and max. albums the production entity can deliver is pre-negotiated. Recording funds for the artist are spelled out up front. Distributing company (Record label) ownst the masters.
In a Pressing and Distribution (P&D) deal ___________________.
The company agrees to manufacture records for you and then distribute them solely as a wholesaler.
Upstream deal?
An artist is “upstreamed” when the deal transforms from a distribution deal w/ the independent distributor, into a production deal w/ the major label. (Artist moves from under indie producer to record label)
What’s a copyright?
A Limited duration monopoly to promote the progress of science & the useful arts by giving creators exclusive rights to their work for a period of time.
What is copyrightable?
A work that is original & has sufficient materiality to constitute a work.
How do you make a work copyrighted?
You simply commit it to a tangible form.
What are the rights you get with a copyright(5)?
(1) you can reproduce it. (2) You can distribute copies of the work. (3) You can make a derivative work. (4) You can perform the work publicly. (5) You can display the work publicly.
Compulsory Mechanical licenses?
Grant the right to reproduce songs in records. Once a work has been recorded and released the publisher is required to license to anyone who wants to use it.
What are the conditions that must be in place for a Compulsory mechanical license to be granted(5)?
(1) It must be a non dramatic musical work. (2) Must of been previously recorded. (3) Public distribution: must have been distributed to the public. (4) Can’t change the melody, lyrics, allowed to conform to style. (5) Phonorecord use for audio only devices.
What is the Statuatory mechanical royalty rate?
9.1 cents per song (sold), or 1.75 cents per minute of playing time.
Is a 5 1/2 min. song paid the same statuatory mechanical royalty rate as a 6 min. song?
YES. If a song is over 5 minutes it is paid the same as a 5 minute song.
Controlled composition clause?
Tries to limit the amount of money company has to pay the artist for controlled compositions. (which are songs,written,owned,or controlled by the artist)
The Controlled composition clause would try to limit royalties in what two ways:
(1)Rate[free goods,reduced rates,public domain arrangements,min. statuatory rate] (2)Rate per album[multiple,Box set]
Digital downloads are immune from controlled composition clauses.
When a song is played on the radio, the radio gets licenses from _____the money goes straight to the _____. There is ___ artist share of ______.
(2) Writer & publisher.
(4)public performance.
Movie Theatres are exempt from generating public performance royalties?
Synchronization is _________
when you “synch” or place music to visuals.
Transcription is _________
When you synch audio with audio. (i.e. radio commercials)
The term “In-context” describes what?
When a piece of music is use in a movie trailer the EXCACT SAME way it’s used in the movie.
The term “out of context” refers to?
When a piece of music is used in a movie trailer differently than it is used in the movie.
Which fee would be higher: In-context or Out of context? why?
Out of context. Because the song is used in a different way in the trailer then it is used in the movie, and thus has become a sort of promotional tool on its own for the movie.
Audio streaming on demand, webcasting, podcasting, and subscription services are all forms of electronic transmission and have no set royalty rates.