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Music Business Intro Mid-Term
Mid-Term
102
Business
Undergraduate 2
10/28/2013

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Term
Trademark
Definition
Indicates the source of a product.
Term
What is needed to develop trademark rights?
Definition
Registration is NOT required to obtain trademark rights. Trademark rights are developed through continued use of the mark in commerce in connection with a product or service. First use is an important factor.
Term
Copyright
Definition
The benefits are Proof of ownership, need certificate to bring a lawsuit for infringement. Lasts 70 years plus life of the author.
Term
What is needed to create copyrights?
Definition
What is needed to create a __________? 1. Originality 2. Fixed in a tangible way
Term
What would not be copyrightable?
Definition
Ideas, Song Titles, Government Works, Works in the Public Domain (Expired) are not ____________
Term
What are the benefits of filing copyright registration with the copyright office?
Definition
Benefits include Proof of ownership, Needed for lawsuits when you attain __________.
Term
What are some defenses for copyright infringement?
Definition
Defenses include Fair use, Parody, Independent Creation,
Term
What are the elements of copyright infringement?
Definition
The use of works under copyright, infringing the copyright holder’s exclusive rights without permission from the copyright holder (publisher or other business representing or assigned by the work’s creator), Similarity between original and new work, proof of ownership, access to the original.
Term
The Difference Between a Trademark and a Copyright
Definition
1. The purpose of a copyright is to protect works of authorship as fixed in a tangible form of expression.
2. The purpose of a trademark is to protect words, phrases and logos used in federally regulated commerce to identify the source of goods and/or services.
Term
Exclusive Rights In Copyrighted Works
Definition
1. Reproduction
2. Distribution
3. Public Performance (composition)
4. Public Performance (digital audio transmissions).
5. Derivative Works
6. Public Display
Term
What is a joint work?
Definition
In the absence of a written agreement, it is a collaboration. Must divide equally. Avoid this by having a written agreement.
Term
What do you need to prevent your actions from being considered a joint work?
Definition
Having a written agreement or split sheet.
Term
Sole Proprietorship
Definition
Without filing any paperwork a business with just one person. Or in some states a married couple.
Term
Drawbacks of Sole Proprietorship
Definition
Drawbacks of ___________ = Owner is personally responsible for the debts and liabilities of the business.
Term
General Partnership
Definition
Without filing any paperwork a business with two or more people.
Term
Drawbacks of General Partnership
Definition
Drawbacks of ____________ = Partners with the most assets may be held responsible for all the debts and liabilities of the partnership
Term
Songwriting Split Sheet
Definition
Simple form that can prevent problems from undocumented collaborations. Include Song Title, Dates worked on, writers names, contact info, birthdates, % claimed, date song was completed.
Term
What does a performance rights organization do?
Definition
Issues licenses, monitors performances, collect fees, distribute royalties, identify unlicensed uses. Pay for the public performance of the COMPOSITION.
Term
ASCAP/BMI/SESAC
Definition
U.S. Performance Rights Organizations
Term
Interactive stream
Definition
A license for the digital performance of the composition. A license for the digital performance of the sound recording and master use license. A mechanical license.
Term
Non-interactive stream
Definition
Internet radio station. A license for the digital performance of the compostion. A compulsory license for the digital performance of the sound recording.
Term
What is music publishing?
Definition
The part of the music business that concentrates on the commercial exploitation of compositions.
Term
Administration
Definition
Means the person responsible for handling the business. Making the deals negotiating the licenses, collecting the revenues.
Term
What is the difference between a music publisher and a record label?
Definition
Music Publisher - Commercial exploitation of compositions.
Record Label - Commercial exploitation of sound recordings.


Record companies, also referred to as labels or producers, sign contracts with artists.

Publishers sign publishing contracts with individual authors. The contract may state that the publisher will represent the work of a composer or lyricist and promote its use. In return, the publisher holds part of the copyright to this work. Therefore, publishers are rightholders.
Term
Full Publishing
Definition
You may receive an advance. You grant the other entity 100% copyright ownership and control of all songs you write. You receive half of all income generated (after recoupment).
Term
How is revenue typically divided in a full publishing deal?
Definition
Copyright ownership and Revenue shares are separate matters. Publisher takes 100% of COPYRIGHT interest in songs created during term as WFH. REVENUE is split 50/50 between writer and publisher, almost equivalent to a recording contract
Term
Co-publishing
Definition
You maintain a percentage of copyright ownership. You grant the other entity 100% control. Writer receives 50% of publishers share, the other publisher receives 50% as well.
Term
How is revenue typically divided in a Co-publishing deal?
Definition
(Songwriter has their own publishing company). Writer Receives 50% of Revenue, Co-Publisher receives 25%, Publisher Recieves 25%. OR Collaborators split ownership of the song and the writing and publishing shares according to what they agree to in writing.
Term
Sub Publishing
Definition
You maintain 100% copyright ownership. You grant the other entity permission to issue licenses, monitor and collect revenues in a foreign market. They keep a percentage and send the remainder back to you.
Term
Public Performance Licenses
Definition
The right to publicly perform music. ASCAP, BMI, SESAC. Issues licenses, monitors performances, collect fees, distribute royalties, identify unlicensed uses. Pay for the public performance of the COMPOSITION.
Term
What is a public performance
Definition
to perform at a place open to the public or at any place where a substantial number of people outside a normal circle of family are gathered.
Term
SoundExchange
Definition
________ monitors, collects, and pays performers royalties for the digital audio transmission of their sound recordings.
Term
What is the difference between the public performance of a composition and a sound recording?
Definition
To perform the copyrighted work publicly by means of digital audio transmission.
Term
Master Use License
Definition
“Use your recording of a cover in a video game” Samples, Compilations, Video Games, Films, Television, Commercials.
Term
Synchronization License
Definition
“Use a composition in connection with audio visual works”. The right to use a composition in connection with an audio-visual work. (Movies, Video games, etc.)
Term
Non-exclusive license
Definition
Grantor maintains copyright ownership, may issue numerous identical licenses, duration specified in agreement.
Term
Derivative Works License
Definition
“Use part of your song in another person’s work.” the license to use an existing sample in another piece of work. The rights owner may decide whether to allow use or not. The rights owner can set the fee and terms.
Term
Exclusive license
Definition
Maintains ownership. Grantor must own or be admin of 100% of rights to issue. Duration specified in agreement. May grant specific rights to one entity. May grant all rights to one entity
Term
Blanket license
Definition
“A clothing store plays CD’s to entice customers to come in” The type of license ASCAP, BMI, and SESAC administered on behalf of their clients. authorizes the public performance of all the songs in the society’s catalog. Paid annually, it allows a customer to perform any of the works on the database of a particular PRS as many times as they want without filing individual requests.
Term
Mechanical License
Definition
“Release a cover song on a CD”. For the reproduction and distribution of compositions. Mechanicals are needed for initial release of a song. Allowing people to do covers.
Term
Mechanical Royalty
Definition
When a song composition is reproduced and distributed, this type of royalty must be paid.
Term
Harry Fox Agency
Definition
Issues mechanical licenses on behalf of rights owners for a nominal fee.
Term
Mechanical License
Definition
For the reproduction and distribution of compositions. This is needed are for initial release of a song. Allowing people to do covers.
Term
Mechanicals are Needed for
Definition
physical copy, digital copy, online sales, interactive streams.
Term
Mechanical Licenses Cover
Definition
__________ License cover Arrangements (with permission)
Term
Statutory mechanical license rates
Definition
9.1 cents per song under five minutes. 1.75 cents per minute or fraction of a minute for songs over five minutes. 24 cents for ringtones per song.
Anyone can make and release a cover of a song as long as they pay the mechanical license.
Term
Service Mark
Definition
Indicates the source of a service
Term
C
Definition
Composition copyright for recorded music
Term
®
Definition
Federally registered mark
Term
Definition
claimed copyrights in the sound recording
Term
TM
Definition
Trademark rights claimed
Term
SM
Definition
Service mark rights claimed
Term
Corp. / LLC and Benefits
Definition
must file paperwork with the state to create. Benefits include 1. Limit personal liability 2. Bring in Investors, 3. Tax Benefits
Term
Derivative Works
Definition
Sampling, Interpolations (bass line), Mash-ups, Medleys, Some Arrangements, Remix
Term
Internal Band/Business Agreements
Definition
Usually takes six weeks to a few months to draft. Without a band agreement – state law controls. The process may lead to the break up of the band. OWNERSHIP of band, name, equipment, merchandise, songs, the masters, how is income divided, sales. RULES like attendance, side projects, image, adding new members, addictions, inability to perform. REMOVING Members and how to deal with it
Term
Sound Recording
Definition
Each recording of a song has its own copyrights
Term
D.B.A Form
Definition
(Doing Business As) form required
Term
Best Type of Band Name
Definition
Fanciful, an invented or made up name. Suggestive (hinting to nature of sound), Arbitrary (common existing word like black eyed peas)
Term
Protecting a Name
Definition
COMMON LAW- no filings needed, when you start using your professional name and being noticed locally. STATE LAW- State filing needed, low cost, officially on record. FEDERAL LAW: Provides constructive notice of ownership nationwide. Expensive
Term
What is a work for hire?
Definition
Creator never obtains copyrights. Agreement must be in writing and signed by creator. Back up clause… Copyright transfer. A work-for-hire agreement essentially states that a person or company who commissions a work from an author retains actual ownership and is, in fact, considered the legal author of the work.
Term
Recoupable
Definition
In a recording contract, the term that means the money the record label expects to be paid back through the artist's income is called this.

Typically, when recording artists sign a recording contract or record a song (or album), the record company pays them an advance that must be paid back out of their royalties. This is called recoupment. In addition to paying back their advance, however, recording artists are usually required under their contract to pay for many other expenses.
Term
Key Person Clause
Definition
Indicates a specific person who will carry out the terms of the contract.
Term
+Advance
Definition
Money a songwriter or recording artist might receive that must be paid back through revenue generated under their contract. The amount the label will pay the artist to create the album.
“Non-returnable” or “Nonrefundable”— the artist is not required to pay the advance back.
Term
+Business Manager
Definition
Oversees the finances, creates budgets, distributes revenue, etc.

Handles all of the finances of the Artist.
Creates budgets & allocates funds to pay people who work with Artist (tour manager, crew/roadies, touring musicians, etc.).
-Assist with tax obligations
-Reviews all royalty pay sheets,
-distributes incomes appropriately.
-Paid a percentage of artist’s gross revenue (5-10%)
Term
+Beats Producer
Definition
Creates music to be plugged into a project.
- Writes original music.
- Samples existing music.
-Uses music/sound bytes from variety of sources.
- Usually not in studio with the artist.
- Owns rights in original material brought to project.
- May not own or have licensed pre-existing material brought to the project.
Term
+Hip Hop/Pop Producer
Definition
- In Studio.
- Often hired on a per song basis.
- Bring beats to the session.
- Collaborates on songs.
- Gets the best from artists.
- Songwriting/publishing rights & royalties.
- Likely to take a percentage of ownership
- Paid percentage share royalties on licensing of compositions.
- Sound recording rights and royalties.
- If no label - artist might buy or license the beats used (terms vary)
- If label - probably a buy out of rights by label (they want 100% ownership in sound recordings.
Term
+Traditional Producer
Definition
- Get the best from the artists.
- Hired to work in studio on whole project.
- Have a vision – make sure tracks fit.
- Collaborate on songs.
- Songwriting and/or arranging.
- Identify problems.
- Push for a great take.
- Typically all work done as a work made for hire.
Term
+Production Company Deal
Definition
- __________ __________signs artist with intention of recording a demo and shopping it to label/s.
- When successful, the artist’s advance first pays back the PC for the recording costs they incurred.
- May require artist to ask label to allow producer to work on first project with label.
- Contract might ask for a percentage of any remaining advance money.
Term
+Recording Contract
Definition
-Label signs artist for album plus several options.
-All funds provided recoupable from Artist’s income.
-Label receives a gross share of “entertainment industry” income.
-As label, need connections to justify the cut. Appropriate industry contacts.
-Ability to do more than artist can do on own.
-High level artists - huge advances & 50/50 division of gross revenue
-New artists - normal advances and label takes 15-25% share of gross revenues
Term
+Recording Contract - Market Testing Deal
Definition
-Testing for commercial viability (First date)
-Small budget created for the artist.
-Might be to record 1-3 songs.
-Might be to provide some tour support. Artist get chance to impress label
-Label learns whether artist is worthy of bigger investment.
-Artist able to perform well in studio? Artist able to perform well in live show?
Term
+Recording Contract - Traditional Deal
Definition
Label provides an advance, receives 100% copyright ownership in the artists sound recordings and is paid back through the artists royalty share on licensing and sales of the sound recordings.

-(Potentially a Long-term relationship)
-Label signs artist for album plus several options.
-Label pays artist 12-50% net royalty on sales and licensing of sound recordings.
-Advance budgeted for the creation of the album.
-All-in - Amount budgeted to cover all costs of the creation of the album.
-Budget created, label handles the checkbook. Any funds left over go to artist.
-Most of the monies paid by label must be paid back to label through artist’s revenue stream.
-It should NOT be a personal loan/debt.
Term
+Release Date
Definition
A contract that states a label needs to distribute the music after a certain date, or else.
Label’s offer to artist typically does not have any:
-Requirement to release the project
-Specific timeline/date for release.
-Options for the artist to get the project released.

-Ask for release to be within ____ of delivery.
-If label doesn’t release it, have some clear procedure e.g. label has ___ additional days to release after which if they fail to release artist may _______.
-Be released from the contract.
-License the masters and split revenue with label. Other creative ideas.
Term
+Sunset Clause
Definition
details how post-term commissions will be handled. by gradually decreasing the percentage of revenue over time until it reaches zero or stops.

Artist:
-Does not want to pay manager in perpetuity.
-Wants to avoid paying two managers.
-Suggest sunset clause - payments decrease over time down to zero.

Manager:
-Present contract with payment in perpetuity.
-Did the work so should have time to reap the benefits.
Term
+Tour Support
Definition
Major Label provides this type of support if an artist needs it.
Term
+General Manager
Definition
Also known as personal manager
-Professional development
-Set up Showcases
-Contract negotiations
-Business / legal liaison
-Record label liaison
-Booking Agent liaison
-Tour Manager liaison
-Promo/publicity liaison
-Friend/confidant/therapist/mediator
Term
+Controlled Compositions Clause
Definition
Grants discounts for required licensing fees. Can be used by the label to pay mechanical royalties on only ten of the artists sixteen original compositions included on the album.

When the artist/songwriter is recording original material, the label will try to save money by:

-Paying only 75% of the statutory rate for mechanicals.
-Tabulating all songs as being under 5 minutes whether they actually are or not.
-Setting a cap on how many songs it will pay mechanicals on. Usually ten songs per album.
-Only paying on actual sales – not on copies made.
-Locking in the statutory royalty rate on the date of signing the deal.
Term
+When should a person hire an attorney?
Definition
A person should ______ an ________ before they need one.
Term
+What is a market testing deal and why would a label enter in one with an artist?
Definition
-Testing for commercial viability (First date)
-Small budget created for the artist.
-Might be to record 1-3 songs.
-Might be to provide some tour support. Artist get chance to impress label
-Label learns whether artist is worthy of bigger investment.
-Artist able to perform well in studio? Artist able to perform well in live show?
Term
+What member of the artist’s team (not counting the lawyer) might need a state license to do their job?
Definition
Booking Agent
Term
+What are the various ways a producer might work with an artist?
Definition
Make beats, offer ideas, collaborate, etc.
Term
+What copyright issues may come up when working with a producer? And what issues should you be concerned about when a producer provides material for a song during you're session?
Definition
Did the producer work alone on the material? Is the project now a joint work? Are there any uncleared samples? Did the producer record/perform all the material alone?
Term
+What are the types of contracts a label might offer an artist?
Definition
Recording Contract, Production Company Deal, Market Testing Deal, Traditional Deal
Term
+How does a label help its artist to tour when the artist cannot afford the associated costs?
Definition
Provides tour support
Term
+What are the benefits of performing shows 5-7 days a week?
Definition
Term
+Gross vs Net
Definition
In a contract, manager could get a certain percent of revenue (ex. 20%) but artist can request deductions to bring down the
Term
+Booking Agent
Definition
"a member of an artist's team must obtain a license to conduct their business in MA"
Term
+Cross Collateralization Clause
Definition
This allows more sources of revenue to pay back a recoupable debt.
Term
+Recording artists do not make any income from performance royalties earned through __________.
Definition
Recording artist do or do not make income from their public performance royalties through terrestrial radio airplay of their SOUND RECORDING
Term
+Record Label exploit ____________ through licenses
Definition
Exploits sound recordings through licenses.
Term
+Music Publisher exploit _________ through licenses
Definition
Exploits compositions through licenses
Term
+How might producers be paid for their work on an artists project?
Definition
_________ can be paid for work on a artists project by Flat fee, Percentage of royalties from ASCAP, BMI, or SESAC, Percentage of revenue from licensing the sound recording, Points on sales.
Term
+Are Business names copyrightable?
Definition
Business names are NOT __________ because they are covered under trademark law.
Term
+How should an ADVANCE provided by a record label be paid back? Personal funds?
Definition
An _________ provided by a record label should only be paid back by the INCOME DERIVED IN THE AGREEMENT.
Term
+In the music industry, a point means _____?
Definition
Percent % is also known as a _________ in the music industry
Term
+360 Deal
Definition
With this deal, a label provides an advance and receives a percentage of the artists revenue from music sales, sponsorships, merch sales, publishing royalties, touring, and more.
Term
+How many years can you own a trademark?
Definition
There is no limit of how long you can own a ________, as long as it is being used.
Term
How do you attain you're six exclusive rights?
Definition
By using it and fixing it in a tangible way, you get you're _____ ______ ______
Term
+When an artist receives a contract offer, who is it more in favor of?
Definition
______ offer doesn't usually favor the artist.
Term
+Do you need to prove intent in a copyright infringement claim?
Definition
No, there is no need to prove intent in a ______ claim.
Term
+Director wants to use an existing song in a movie, what two licenses do you need?
Definition
Synchronization license and Master use license are both needed if wanting to use an existing song in a ________.
Term
+When offered a contract by a potential manager, is it normal that the manager will receive 20% gross of all income?
Definition
In a contract by a potential ________ there should be exclusions/exceptions from booking agent commissions, advances, lights, payments for opening acts, etc.
Term
+What can you do when you are booking your own tour and a venue refuses to provide a contract that states what have told you verbally?
Definition
Summarize in an email, offer them the chance to correct you, and tell them if you don't hear back you will rely on what you wrote. This is what you do when a ________ refuses to provide a contract.
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