GLOSSARY OF INDUSTRY TERMS

180 Deal: A record deal in which the record company takes a percentage of your record sales plus one other income stream

270 Deal: A record deal in which the record company takes a percentage of your record sales plus two other income streams

360 Deal: A record deal in which the record company takes a percentage from not only your record sales, but every other income stream involved in your career. Because they are taking from more areas, the percentages they deduct are typically lower.

A&R (Artist & Repertoire): Department or ‘scout’ who finds talent for the record company (either by attending shows or researching online) and guides them in creating an original sound

Active Interest: If you sign with a major record company, they will have publishing and distribution companies that they either own or partner with. If they “strongly recommend” them and you decide to take them up on it, they now have an “active interest” in your deals; This means they make the deal for you and give you your percentage once the deal is complete

Administration Rights: This typically refers to the right to shop songs and other forms of media around to potential buyers and licensees

Advance: A lump some of money paid to the artist for things like gear and recording costs. These expenses are usually recouped through your royalties in a record deal.

AFM (American Federation for Musicians): A labor union representing professional musicians in the US and Canada

Agent: A person who aids in booking gigs for the artist, usually for a negotiated percentage of the profits.

Album Cycles: Instead of terms of years, most record contracts are now negotiated in terms of 'album cycles'; For example, the term for which you have a personal manager on your team may be 2 album cycles, and their commission gets reduced after the release of the second album.

All-In: An All-In royalty rate is a royalty negotiation in which the percentage given to the artist (by the record company) will be split between the producer and artist, depending on their cut.

American Music Awards: Fan-voted music awards show founded in 1973 by American radio and TV personality Dick Clark

ASCAP: A non-profit performing rights organization

Audit: An inspection of an individual’s or organization’s accounts (an artist can and should audit it’s record company via their entertainment lawyer)

Audio Home Recording Act (1992): An act that allowed digital recording formats to be released without being held responsible for copyright infringement

Bandsintown:  Music site founded in 2007 that was designed as a tool for artists to better connect with their fans. Bands and artists of various sizes can post their live appearance dates on the website as larger promotion 

Blanket License: A license purchased by nightclubs, bars, and larger streaming services that allow them to play a wide collection of music works by artists who share in the contract terms.

BMI: A non-profit performing rights organization

BPD (Base Price to Dealers): Same as PPD; This is the monetary value of a single record when it is sold to a box or record store by the record company. Your royalty as an artist is based off of this (ex. If your royalty rate is 10% of PPD and your album costs $10, you get $1 for every record sold)

Budget: A set amount of money that defines how much you are able to spend over a certain period of time (ex. A ‘recording budget’ is a limited dollar amount for exactly how much you can spend to record an album in the studio)

Business Manager: An artist may handle a business manager to handle their finances

Canadian Country Music Association: Member-based organization committed to the promotion and aid of Canadian Country Music (Non-for-profit; founded in 1976)

Christian Copyright Solutions: One of the largest christian licensing organizations that allows churches to play religious copyrighted material through partnerships with ASCAP, BMI and SESAC

Clause: A minor stipulation in a contract that further explains or specifies extenuating circumstances within a negotiated deal point

CMRRA (Canadian Musical Reproduction Rights Agency): Agency that acts much like US performing rights organizations in that they license out songs to organizations who wish to create reproductions of those songs- based in Toronto

Co-Writer: An additional writer of a song

Columbia Artist Management Inc (CAMI): An international talent management agency founded in 1930 by Arthur Judson and William S. Paley  (formerly Columbia Concerts Corporation). This organization represents instruments, ensembles, composers, conductors, and more

Commission: The percentage paid to someone for helping an artist complete a task or service (ex. An agent will get a commission for helping the artist book gigs)

Compulsory License: The license that establishments buy in order to use songs

Conflict of Interest: When your involvement or relationship with one entity conflicts with a different relationship.

Controlled Composition Clause: The part of a record deal that states how much a songwriter will get per composition on an album

Copyright: The ownership of a song or musical work

Copyright Mark: ©

Copyright Reversion: Your ability as a songwriter to reclaim your copyright after a set period of time (also depends on when the recording was released)

Copyright Royalty Board: A union of 3 judges that specifically deal in copyright terms and regulations (established in 2005)

Creative Artists Agency (CAA):  Los Angeles-based agency that deals with about 1,800 talented artists and likens its competitors to William Morris and International Creative Agency

Cross Collateralization: The ability to recoup money for one service by taking income from another (ex. If you have released 2 albums, and these albums are cross-collateralized, that means the money you make off of album 2 can be used to help alleviate a deficit from album 1 {provided that there is a deficit to begin with})

DAW (Digital Audio Workstation): Computer software used to record music (examples include ProTool, Logic, Ableton, and Audacity. Most recording studios use either ProTools or Logic)

DBA (Doing Business As): When someone wants to conduct business under a name that is not their own, they may set up a DBA through their county clerk’s office. This does not make you a nationally recognized business, nor does it secure the name of your business nationally.

Deficit: The amount of money you owe to an organization or person that loaned the money to you (also called your red position)

Demo Deal: When a record company offers an artist a small amount of money to record only a few songs (not amounting to a full album) in order to get a feeling for how well the artist will sell

Derivative Work: Any work that is made out of an older work (ex. Remix or Parody)

Development Deal: Same as demo deal, except the record deal terms are pre-negotiated

Digital Millennium Copyright Act (1998): Legislation that granted ‘safe harbor’ to sites that host user-generated content; This means that if a user uploads a piece of content that infringes copyright of someone else’s work, the web hoster would not be liable for the infringement unless they either aided in the crime or did not take proper precautions to rid of the infringing material

Digital Performance Right in Sound Recordings Act (1995): This law essentially gave the right to perform copyrighted material publicly via digital transmission, meaning that digital services were aloud to play sound recordings (sometimes requiring a license) without incurring copyright infringement

Digital Recording: Song that can be downloaded digitally (through iTunes, Spotify, etc.)

Distributor: The organization that distributes records for the record companies with which they have negotiated contracts

Entertainment Lawyer: An attorney that specializes in the field of entertainment. Music is especially unique, so if you hire a lawyer as an artist, you need to hire one of these.

Exclusivity: If you have a deal of ‘exclusivity’ with someone, that means you can not make a deal with anyone else that pertains to the same field of income (ex. All major record deals are ‘exclusive’, so if you sign with Warner, you couldn’t make a seperate deal with Universal)

Fairness In Music Licensing Act (1998): Legislation that allowed bars, restaurants, or nightclubs of a certain size and budget to bypass payment of any licensing to host live acts or stream music within their establishments

Formula: A negotiated equation that will determine how much or how little an artist is paid based on a number of factors (royalty rate, number of albums sold, deficit, etc.)

Free Goods: When you sell physical items in bulk as an artist, you will also be giving away a small percentage of those items for free, either as promotion or as extra incentive for retail outlets to sell your product.

Fund: The lump sum that a record company gives the artist for costs that must be paid to all parties involved in recording a record (Cost of process, producer, mixer, etc.)

GMR (Global Music Rights):  A performing rights organization founded by Irving Azoff in 2013

Gig: A musical performance

Gross Income: The total amount of money that is generated before any expenses are paid

Guaranteed Release: Your record deal will never specifically state that the company must release your record. If you have a ‘guaranteed release’ provision in your contract, it will give the record company an ultimatum to release the record.

Hall Fees: Monetary amount that a venue charges an artist for selling their merchandise during a show

Harry Fox Agency: An organization that provides rights management, licensing, and royalty services for the music industry (Competitors include Loudr, Easy Song Licensing and TuneCore, though not all competitors provide similar services)

“In The Black”: You have recouped all of your money that was loaned to you

“In The Red”: You owe money to someone/you have not 'recouped' the money you owe to your record label

Independent (Label, Artist, Promoter): Any organization that operates freely from a parent corporation

Interface (audio interface): An electronic box used to make quality home studio recordings by connecting instruments and microphones that will be recorded onto your computer. An interface can be used with any DAW.

ISRC Code: An 'International Standard Recording Code' is essentially a 'digital footprint' that musicians can purchase to track specific sound recordings or songs. These become available when you register for distribution services or sign with a label.

Joint Venture: A deal negotiated between two parties

Key Member: This is a person that holds a specifically vital role in a negotiation. The ‘key man’ provision ensures that if this person or entity leaves the venture, the deal can be terminated (used for personal managers and specific members of music groups)

Last.fm: Music platform that pinpoints listeners' musical tastes (through collection of digital streams) and recommends new bands and artists to listen to (founded in the UK in 2002)

Licensee: The holder of a license

Live Nation: Beverly Hills-based company founded in 1996 by Robert F.X. Silverman. This organization deals largely in the booking, organizing, and leasing of  music venues for  various events

LLC (Limited Liability Company): Business structure that is nationally recognized. This kind of operation allows a business owner to shift liability from their personal assets to the company’s assets (meaning that if you get sued, instead of coming after your car, house, or savings account, they can only go after the money and assets your company currently has)

Loan-Out Corporation: When artists gain good popularity, some decide to set up a corporation that “loans” out the services to the record company (meaning the deal is now between the newfound corporation and the record company). This is done for liability purposes.

Locker: Any online services that is used as a platform for hosting large amounts of music

Marketing: The department of a record company that works to advertise the music of a signed artist

Master: The final production of a song

Matching Right: If you can’t come to an agreement with your record label as it pertains to a certain revenue stream, you have the ability to shop your material around to other companies. However, since your deal is with the first company, they have a right to ‘match’ the offer provided by another company (take the same deal) if it differs.

Major Label: A record company owned by Universal, Waner, or Sony

Mechanical License: The license that deals with ‘songwriting’

Mechanical Royalty: The royalty paid when a service or organization buys the  recording of a musical composition (paid to the songwriter or whoever owns the copyright)

Merchandise (Merch): Any material that is considered a ‘souvenir’ or promotional material purchasable by the public (ex. Band t-shirts, stickers, or live albums)

Merchandising Rights: The rights needed to use an artist’s name or likeness on merchandise. Most record companies will now want to take these from you.

Mixer: In-studio worker who runs the soundboard (or ‘mixing’ board) during a recording session

MMF (Music Manager's Forum): New York-based organization that provides a networking and supportive platform to music managers (Founded in 1992 and represents over 1,500 managers in the US)

Multi-Artist Deal: When a production company or investor signs a deal with a record company that involves multiple artists

Music Modernization Act (2018): New law set in place to fairly regulate the money paid to artists by digital streaming services like Spotify and Pandora

Musical Work: The physical composition of music, i.e. lyrics and melodies (If you’re a signed act, funds for these move through the publishing company)

NAMM (National Association of Music Merchants): The world's largest trade show for music products, this event takes place every year, alternating its location between California and Tennessee.

Net Income: Total income generated after taking out any necessary expenses, such as royalties for managers or agents, costs for recording a record, or costs paid to a producer

NMPA (National Music Publishers Association): An association established to protect the rights of American publishing industry (circa 1917)

Non-Interactive Streaming: Any type of digital streaming service that does not allow you to pick the specific songs you can listen to (although it may ask for your preferences to curtail the music to your taste)

Options: The record company has the ability to say that there are a certain number of albums that are ‘up for negotiation’ depending on the success of the album prior to that. These are called ‘options’

Outside Songs: Any songs used on an artist’s record that was not written by them

Overhead: Expenses that come off the top of any income that is generated

Override: If you’re an artist and you have an investor, that investor will most likely insist on a paid percentage of every record sold going back to him. This figure is known as an ‘override’.

Passive Interest: When signing a deal, if your record company does not recommend one of their partners for distribution or publishing, you are allowed to make the deal yourself and then pay a percentage to the record company once the deal is done.

Pay or Play: This is a provision that states, even if the artist’s services are not needed, they will be paid the negotiated fee anyway.

Per Diem: (Meaning ‘per day’) A base-line flat fee that is paid to a hired musician that will cover expenses with interest (Only used if a commitment is multiple days). Ex. “I was on tour and got paid a $150 per diem”

Performance Royalty: The royalty figure that pertains to the actual sound recording of a song

Performing Rights: The rights that allow an artist to perform their music in public. If you sign an average record deal, the record company will take these rights from you.

Permanent Downloads: Any download that gives you unlimited rights as to where and when you can play that music (within the confines of current federal law)

Personal Manager: I like to call this the second ‘you’. A personal manager basically acts as decision-maker for the artist when the artist is not present or unable to make a decision. They also coordinate with all the people on the artist’s ‘team’ of workers (agent, business manager, producer, etc.) to ensure everything is in synch. Additionally, they act as a buffer between the artist and his bosses/fans

PPD: Published Price to Dealers is the cost at which albums are sold to retail stores (This figure is what royalties are based off of)

Piracy: The unlawful copying of a piece of media or composition

Premiums: Records that are sold along with another product

Pressing and Distribution Deal (P&D Deal): If an independent artist wishes to stay independent, they can make a deal with a record company to manufacture the records in exchange for a percentage of record sales. Under these deals, record companies typically do not offer artists an advance.

PRO (Performing Rights Organization): An organization that works to ensure songwriters are paid their fair share of royalties from anyone who uses their songs (ex. ASCAP, BMI, SESAC, WMG)

Pro-Rata: A method used to assign a dollar figure to a fraction of work done (ex. Since they only shipped out half the albums that were supposed to go out on our deal, the record company prorated my royalty earnings).

Producer: A member of the recording process that helps to make the collection of recordings sound cohesive by offering suggestions for sounds and styles (almost acting as another band member)

Product Management: The department of a record label that coordinates with all the other departments to ensure that things are running smoothly and at a similar pace.

Production Coordinator: Members of the film industry that coordinate with each department of a film to ensure a smooth running operation

Prospective Pay: Payment that is given after recoupment, with no additional payment for any previously sold items before recoupment (ex. Artists are usually paid prospectively for record sales, meaning they will not actually make money on albums until they recouped all of the money they used to record that album)

Public Domain: Any piece of media that can be used at the public’s discretion without incurring copyright infringement. This happens either because the copyright has expired or there was no copyright to begin with.

Publisher: A person or organization that makes a deal with a songwriter much the same way the record company works with the artist. The publisher will own the rights to the songs, and in exchange, shop these songs around to as many people as they can, collect licensing fees, and split them with the songwriter.

Receipts: The share of money you get back any time you license out a service or a song to an organization or company

Record Deal: Any deal signed with a major or independent record label that sets the terms for how you will conduct business.

Recording Costs: Any fees that are used to record a song, demo or full-length record

Recoupment: Repayment of money that was borrowed from the record company for certain services

Reserves: When large bundles of an artist’s album are shipped to a retailer, the retailer has the option to send back whatever they don’t sell. Because this can’t be pre-negotiated, the record company doesn’t want to risk overpaying the artist, they hold onto a percentage of the artist’s royalties until the retail outlet decides how much they are going to keep. This percentage is known as a ‘reserve’ (sometimes it can take several years for an artist to get their reserve back).

Retroactive Pay: The ability to receive royalty payments for albums that were used to recoup a deficit (only collected once the deficit has been recouped)

ReverbNation: Online platform that organizes tools that help artists promote and manage their careers (Founded in 2006)

Rider: A form given to a venue that lists all the requirements to be fulfilled before the artist can perform there (includes things such as stage plots, number of stagehands, food for artists and crew, etc.)

Royalty: When an artist signs a record deal, the record company now owns the artist’s sound recordings. When the sound recordings are sold (either in the form of a single or an album), the artist then collects a percentage of the revenue. This percentage is known as a royalty

Safe Harbour Clause: *See ‘Digital Millennium Copyright Act’

SAG-AFTRA (Screen Actors Guild-American Federation of Television and Radio Artists): A labor union representing a large number of american television actors, musicians, artists, and other media professionals worldwide

Satellite Radio: A broadcasting satellite service (i.e. Sirius XM)

Service Mark: Similar to a copyright mark, except a service mark distinguishes an organization’s services from that of its competitors

SESAC: A for-profit performing rights organization

Share: The monetary portion one shares in a sum of money that is earned

Side Letter: If an artist decides to set up a Loan-Out Corporation (*listed above), they must sign a letter saying that if the company they have set up does not deliver the songs that the record company requires of it, the artist will deliver them instead.

Sideman: Any artist that performs on another artist’s song or record

Single-Artist Deal: A deal record deal involving only one artist

Split Agreement: An agreement between two parties to split profits collected for a joint effort. These profits are usually split by percentage (ex. 90/10, 80/20, 70/30, etc.)

Songkicker: Ticket-purchasing app that also promotes bands and artists to its users, much like Bandsintown

Song Plugger: Someone from a publishing company who tries to get people to use the songs on their catalog

Sonny Bono Copyright Term Extension Act (1998): An act that was put in place to extend the term of copyright for all songs in the US

Soundcheck: The process of a musical act testing the levels and environment of a venue by playing through sections of a song. This is to ensure the musicians feel comfortable with the audio levels and sound structure, as it can change from venue to venue

Soundcloud: Member-based audio platform where artists, podcasters, and other audio-based entertainment organizations can promote their material  (founded in 2007)

SoundExchange: Global organization that helps distribute digital performance royalties

SoundScan: A tracking platform that gathers the data of all digital activity pertaining to the record industry (i.e. the number of songs downloaded, the number of songs streamed, the number of songs purchased online, etc.). Record companies use this as a reference for paying their signed artists.

Sound Recording: The actual recording of a song (This is handled by the record company, whereas a publishing company would deal with musical compositions in the tangible form)

Statutory Rate: Anyone who wants to use a song that is not theirs and profit off it must pay the original creator of that work a set fee every time it sells. This fee is called the ‘statutory rate’ (currently sits at 9.1¢ for songs 5 minutes or less in length)

Sunset Clause: These are clauses that protect the artist’s royalty collection on past albums or deals by providing a ‘cutoff’ of commission for personal managers or producers after a certain period of time (ex. “Our latest sunset clause states that our personal manager will no longer receive royalties for our last album 2 years after our term has ended)

Synchronization (Synch) License: A license that you must buy if you which you ‘synch’ a piece of music to video

Take-Down Rights: When record companies make deals with any platform that hosts user-generated content. Because these platforms cover so many topics, the song may be used in ads or promotional material tied to a video or another piece of media that the record company (or artist) finds unsuitable. So often they will negotiate to have ‘take-down rights’ meaning the hosting site can pull the song at the discretion of the record company.

Term: The length of time in which a deal will be enacted (Ex. “The term for my personal manager is 2 years”)

Term Songwriter Agreement: When a songwriter agrees to give all songs written within a specific period of time to a publisher and split the profits

Terrestrial Radio: Radio signal that travels on land to a land-based station

Tethered Downloads: Song files downloaded from a service that can only be played on one device.

Tour: A string of live performance dates set in multiple locations over a certain period of time

Tour Manager: The person that oversees all operations while an artist is on tour (if the budget does not allow for a tour manager, the personal manager will be entrusted with these responsibilities.

Transcription License: Licenses specifically used for commercial radio to ensure that radio stations can use songs by particular artists with which a deal is made (operates much like a synch license)

UPC Barcode:  A 'Universal Product Code' is used to represent and track your music as a whole product. This is different from an ISRC code, which is used to track a specific sound recording or song.

Upstream Deal: A deal in which, if a group or artist is signed with a company that has a smaller-than-average budget and blows up in a very short period of time, they can license out their rights to a larger corporation in order to meet new demands.

Works For Hire: When an group or company hires a songwriter to write music for them, they may establish them in that deal as a ‘work for hire’, meaning they will get paid a flat fee for their songs, but at the end of the day, the company/group owns that material as their own

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