Record Labels and Market Share

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Questions and Answers

What is a recoupable cost in the context of a record deal?

Expenses that the label covers and later recovers from the artist's earnings (correct)

Costs that the artist must pay upfront before recording

Fixed costs that are not included in any artist agreements

Costs that are automatically absorbed by the record label without recovery

Which of the following is NOT a primary role of a record label?

Writing songs and compositions for the artist (correct)

Marketing the artist and their music

Providing access to distribution channels

Managing the financial aspects of recordings

What are the three factors used to calculate royalties due to an artist?

Revenue, percentage split, and number of streams or sales (correct)

Flat rate paid, number of units sold, and licensing agreements

Advance payments, promotional expenses, and recording costs

Sales figures, distribution rights, and marketing costs

Which of the following describes cross collateralization in a record deal?

The practice of using a single advance for multiple projects Signup and view all the answers

What does the RIAA stand for and what is its main function?

Recording Industry Association of America; it represents and promotes the recording industry Signup and view all the answers

Which term refers to music specifically produced for use in commercials?

Production music Signup and view all the answers

What is the main purpose of a controlled composition clause in a record deal?

To cap the royalties for songs written by the artist themselves Signup and view all the answers

What differentiates piracy, counterfeiting, and bootlegging?

Piracy is unlicensed duplication, counterfeiting is illegal copying of copyright material, bootlegging is unauthorized live recordings Signup and view all the answers

What are some advantages of signing with a major label?

Better distribution channels Signup and view all the answers

Which of the following accurately describes the difference between a Major label and an Indie label?

Major labels have more market share and resources. Signup and view all the answers

What does the AFM Special Payments Fund provide?

Royalties to musicians for past recordings Signup and view all the answers

What is the primary function of SoundExchange?

To collect music licensing fees from digital platforms Signup and view all the answers

Which term refers to recording music specifically for use in films or television?

Production music Signup and view all the answers

What does cross collateralization entail in a record deal?

Linking profits from multiple recordings Signup and view all the answers

Why are records returnable to the label?

To control overproduction and inventory Signup and view all the answers

What is the purpose of a vocal contractor?

To hire singers for recording sessions Signup and view all the answers

How can a composer earn royalties from commercials?

Through music licensing fees from broadcasts Signup and view all the answers

What is required for legal sampling of another artist's work?

A written agreement and license Signup and view all the answers

Study Notes

Major labels are typically large corporations with extensive resources, while indie labels are independent and often have a more niche focus.
Major labels hold approximately 70% of the global music market share, with indie labels holding about 30%.

Major Label Advantages and Disadvantages

Advantages: Access to significant financial resources, established industry connections, and marketing power.
Disadvantages: Less creative control for artists, high pressure for commercial success, and potentially exploitative contract terms.

Offerings of Record Labels

Financial support for recording costs.
Marketing and promotion to enhance visibility and reach.
Distribution networks for physical and digital sales.

Uploading un-owned files violates copyright laws, infringing on the rights of original creators.
Downloading un-owned files also violates copyright laws, impacting the revenue of content owners.

The Supreme Court ruled affirmatively against file sharing sites, affirming that they contribute to copyright infringement.

Costs of Creating a Recording

Major cost categories include studio time, producer fees, musicians, and marketing expenses.
Recoupable costs are those that an artist pays back to the label from earnings, while non-recoupable costs remain the label's responsibility.

Recoupable Costs and Royalties

Recoupable costs: Costs the artist can recover from their earnings (e.g., recording expenses).
Three factors for calculating royalties: sales figures, royalty rates, and distribution percentages.

Job Opportunities at Record Labels

Positions include A&R representatives, marketing coordinators, finance managers, and public relations specialists.

RIAA Overview

The RIAA (Recording Industry Association of America) represents the recording industry, advocating for legal rights and combating piracy.

Copyright Issues

Piracy involves unauthorized copying or distribution, counterfeiting is the creation of fake products, and bootlegging refers to unauthorized live recordings.

Contractors and Techniques

Vocal contractors hire singers for recording sessions; instrumental contractors do the same for instrumentalists.
Overdubbing is layering additional sounds over existing tracks; doubling involves recording the same part twice for a richer sound.
Sidelining refers to providing additional background vocals or instruments.

AFM Special Payments Fund

A fund managed by the American Federation of Musicians that distributes payments to musicians for certain uses of their recordings.

Royalty Artist Agreement

Contracts that detail how artists earn royalties from their work, typically lasting for the duration of the artist's career or project.

Advances and Record Deal Points

Advances are upfront payments against future earnings.
Deal points include royalty rates, recoupable costs, and marketing commitments.

Cross Collateralization and Controlled Composition Clause

Cross collateralization allows labels to recoup losses from one album against profits from another.
Controlled composition clauses limit the number of songs an artist can claim royalties for to reduce label expenses.

Record Returns and Industry Measures

Records are returnable to mitigate financial risk for labels; unsold stock can be returned and accounted for.
Billboard and BDS (Broadcast Data Systems) track chart performance, while Soundscan measures actual sales data.

SoundExchange and Buzz Angle

SoundExchange monitors digital performances for payment to artists and labels.
Buzz Angle analyzes music consumption data across platforms.

Environmental Music and Usage

Environmental music maintains the atmosphere in public spaces; it differs from foreground music, which is the main focus of attention.
Re-recording can be necessary for licensing purposes or adaptations to fit specific environments.

Production Music

Music created specifically for use in media, divided into source (diegetic) and score (non-diegetic) music.

Composer Payments and Jingles

Composers can earn fees for commercial use, and jingle houses specialize in creating catchy music for advertisements.
A "temp track" is a placeholder music piece used in a project to convey mood during editing.

Sampling and Licensing

Sampling is incorporating a segment of existing recording into a new piece.
Licensing for sampling involves obtaining permission from original creators to avoid copyright infringement.

Major vs. Indie Labels

Major labels are large companies with extensive resources, while indie labels are smaller, independent entities that often emphasize artistic freedom.
Market share of major labels is approximately 70%, while indie labels hold around 30% of the market.

Major Label Advantages & Disadvantages

Advantages: Access to large budgets, extensive marketing and promotional resources, established distribution networks.
Disadvantages: Less creative control for artists, potential for contracts that favor the label, pressure for commercial success.

Record Label Offerings

Financial backing for recording and production costs.
Marketing and promotional support to enhance visibility and sales.
Access to industry contacts and expertise for broader opportunities.

Copyright Violations

Users who upload unowned files violate copyright laws (specifically the right to reproduce).
Users who download unowned files infringe upon distribution rights.

The Supreme Court ruled against file sharing sites, affirming that they can be held liable for infringing copyright.

Major Cost Categories of Creating a Recording

Studio time, producer fees, session musician costs, and mixing and mastering expenses.

Recoupable vs. Non-Recoupable Costs

Recoupable costs include studio and production expenses that the artist will pay back through their earnings.
Non-recoupable costs, typically borne by the label, may include marketing and promotional expenses.

Recoupable Cost Definition

A recoupable cost is an expense that is deducted from an artist's earnings before they receive payment.

Royalty Calculation Factors

The three factors are: the percentage of sales, the number of units sold, and the wholesale price.

Job Opportunities at Record Labels

Roles may include A&R representatives, marketing specialists, publicists, and business affairs professionals.

RIAA Overview

The RIAA (Recording Industry Association of America) represents the recording industry and participates in anti-piracy measures, copyright enforcement, and promoting music sales.

Piracy, Counterfeiting, Bootlegging

Piracy involves unauthorized copying; counterfeiting refers to replica products; bootlegging is the unauthorized recording of performances.

Vocal Contractor Role

A vocal contractor organizes and manages vocal talent for recording sessions.

Overdubbing

Overdubbing is the process of adding new sounds or vocals to an existing recorded track.

Instrumental Contractor Function

An instrumental contractor hires and manages session musicians for recording projects.

Doubling in Music

Doubling refers to recording the same part multiple times to create a fuller sound.

Sidelining Definition

Sidelining involves using specially contracted musicians for specific parts of a track without credit.

AFM Special Payments Fund

A fund established by the American Federation of Musicians to provide payments to musicians for their work in broadcast or other mass media.

AFM Union Re-use Agreement

Agreement that governs the reuse of recorded material concerning payments and rights for union musicians.

Royalty Artist Agreement

A contract outlining the terms of royalties paid to artists, typically lasting for the duration of the recording's lifespan.

New Technologies in Agreements

Discussion on new technologies is necessary to adapt to changes in how music is distributed and consumed.

Advance Definition

An advance is an upfront payment made to an artist against future royalties.

Deal Points in a Record Deal

Key deal points may include advances, royalty rates, duration of the contract, and rights to the master recordings.

Cross-Collateralization

A practice where an artist's earnings from one album can be used to recoup losses from another album.

Controlled Composition Clause

A clause that limits the number of songs an artist can record for which they will receive royalties.

Return Policy for Records

Records are returnable to labels due to the market's constantly changing nature and uncertain consumer demand.

Billboard and BDS

Billboard charts track sales and popularity; BDS (Broadcast Data Systems) measures airplay data to reflect song popularity.

Soundscan Overview

Soundscan measures sales data primarily from retail outlets, while BDS tracks radio airplay.

SoundExchange Measurement

SoundExchange tracks digital performance royalties for artists and rights holders.

Buzz Angle Measurement

Buzz Angle provides analytics on music consumption across various platforms.

Environmental Music Definition

Music designed to create a specific atmosphere, often used in businesses and public spaces.

Background vs. Foreground Music

Background music supports the ambiance without attention, while foreground music is meant to be actively listened to.

Re-recording for Environmental Music

Companies may re-record music to obtain fresh versions tailored for specific settings or uses.

Production Music Overview

Music created specifically for use in films, television, and other media without the need for custom scores.

Source vs. Score Music

Source music is diegetic and part of the narrative; score music is composed to enhance the emotional landscape.

Composer Payment for Commercials

Composers typically receive a lump sum or royalties based on the usage of their music in advertisements.

Jingle House Definition

A company specializing in producing catchy musical themes for advertising purposes.

Temp Track Overview

A temporary track used during the editing process to demonstrate the desired style or mood before a final score is composed.