Music Business Lingo Guide

A&R - Stands for artists and repertoire. This is the department of a record company that is responsible for discovering new talent.

Accounting, an - the periodic (usually quarterly) financial reports given by record companies to artists. It details sales and royalties earned. If the artists advance has already been recouped a check usually accompanies the statement

Administration Fee - the fee charged by a music publisher for managing and exploiting an artist's songs. Fees vary greatly, but often between %5-%25

Administration Rights - The rights granted to a music publisher to manage or exploit a catalog of songs.

Advance - A pre-payment of royalties. A sum of money paid to an artist or songwriter in anticipation of, and chargeable against, the artist's or songwriter's future royalties. An advance is usually paid on the signing of a contract, the exercise of an option, or some other event. Advances, though recoverable out of future earnings, are not traditionally returnable if not earned.

AF of M (American Federation of Musicians) - The musician's union.

AFTRA (American Federation of Television and Radio Artists)

AGAC (American Guild of Authors and Composers) - A national songwriter's association, which performs various administrative, educational and political functions for its members.

Agent A person or organization that procures employment for clients for a fee.

ASCAP (American Society of Composers, Authors and Publishers) - A performing rights organization whose sole function is the issuance and enforcement of licenses for the public performance of the nondramatic songs of its publisher and songwriter members and the distribution of the revenues derived from such licenses.

BMI (Broadcast Music, Inc.) - same as ASCAP (above).

Bottom Line Either the maximum one party will give or the minimum the other party will take

Bullet - The black dot or star appearing adjacent to the titles of records on the charts of music trade publications which connotes unusual activity or the growth of a record's popularity. The loss of a bullet signifies the record has peaked and is on the way down.

Bump - Bumps are contractual increases that take effect on the happening of some event. For example, a record contract might provide that artist royalties are calculated at 15% until 500,000 units are sold and then jump to 16%.

© - The international symbol for the word "copyright." It usually appears with the year date of the copyright and the copyright owner. E.g. © John Doe

Catalog - A group of songs characterized by something in common suc as common ownership and/or authorship.

Controlled Composition - The phrase appears in record contracts meaning a composition owned or controlled by the artist and recorded under the contract. The record company seeks a reduced mechanical royalty on these controlled compositions. It is a negotiable term. Young artists almost always agree to have a reduced rate of approximately 75% limit of 10 songs. As the artist's track record and negotiating power improve, the percentage goes up.

Co-Publishing - When more than one publisher has acquired publishing rights to the same song. It also refers to a publishing deal in which the publisher gets sole administration rights but takes less than 50% of the total publishing income.

Copyright © - A limited monopoly granted by Congress as an incentive to creators of certain literary and artistic works so that they can control the destiny of the work and enjoy the fruits of their creativity. It protects the expression of an idea. It lasts for the life of the artist plus 70 years. Copyright exists at the moment the "idea" is put in a tangible form.

Cross-Collateralization - The application by a record or publishing company of an artist's royalties from one source against unrecouped recording costs or advances from another. This usually happens when the record company and publisher are the same or related entity.

Cut in - The practice of ascribing to a person (usually the performing artist) writer credit for a song not written by that person, meaning they get a cut of the royalties. A cut in is usually extracted from the songwriter as a condition for the artist to record the song.

Cutout - A record that has been deleted from a record company's active catalog. Cutouts are sold at much reduced prices and the record contract usually provides that the artist royalties are reduced.

Distribution - The process by which a record finds its way from the studio to the consumer. Most major record companies have their own distribution systems which distribute their won product and that of other record companies. Distribution is a key factor for the majors but especially the smaller record companies.

Employee for hireThe Copyright Act of 1976 provides that if you write a son as an employee for hire of a publisher, the publisher, not the writer, is considered the author for purposes of the Copyright Act and "owns all the rights comprised in the copyright" But because of a Supreme Court case, its pretty difficult for the publisher to deem any songwriter an employee for hire.

Execution (of a contract) - Legal jargon for the formal completion of a contract by the parties signing it.

Folio - A bound collection of printed songs usually with a theme (The best of the '70s). "Matching folios" match the contents of a particular record and usually have the same cover art. "Personality folios" contain songs, biographical material and pictures of a particular artist.

Free Goods - The record company gives away records free to either customers or distributors or record stores to encourage them to buy more records. The record contract provides that they don't pay the artist royalties on there "promotional" free goods. Because artists aren't especially fond of this and have kicked and screamed, some record contracts will not refer to "free goods" but say that royalties are paid on 85% of all records sold.

Front Money - Same as Advance (See Above)

Gold Record - A gold record is on certified by RIAA as having a minimum sale of 500,000 units.

Grand Performing Rights - Usually distinguished from "nondramatic" rights. The difference between the rights in a play like "Funny Girl" which includes song, music, dance and costumes (G.P.R), and the rights to an individual song written outside the context of a theatrical play (nondramatic)

Gross Income - The total income before deductions of expenses or other costs. Gross income minus expenses and costs is "net income"

Harry Fox (The Harry Fox Agency, Inc.) - The Harry Fox Agency issues licenses on behalf of its music publisher clients for the use of their songs on phonograph records (mechanical licenses) and in connection with motion pictures, commercials, television films, and videotapes (synchronization licenses). It also collects and distributes to its clients the income from such licenses.

Independent Producer - An independent producer or production company is like a mini record company. they discover and sign talent, and usually produce a demo. They then try to sell the demo to a larger record company who provides the costs to record, manufacture, distribute, and promote the record The artist is signed to the producer, not to the larger record company. The record company "pays" the producer, who "pays" the artist.

Independent Promotion - The practice by record companies of engaging third parties to "promote" their records. "Indi promo" almost always refers to radio promotion. Fees can range from $1,000 to $250,000

Individual Producer - The person who manages and oversees the studio recording of the artist, including the selection of material and the communication with the engineer. Generally responsible for the "sound" of the product. Producers usually receive a fee up front (an advance) and a percentage of royalties from the record.

Infringement of Copyright Anyone who violates any of the exclusive rights of a copyright owner under the Copyright Act is an infringer of the copyright.

Joint Work - According to the Copyright Act, a joint work "is a work prepared by two or more authors with the intention that their contributions be merged into inseparable and interdependent parts of a unitary whole." If you, a composer, write a song with a collaborator who is the lyricist, you both jointly own the resulting song. You own an undivided half-interst in his/her lyric, and they own an undivided half-interest in your music.

Key-Man Clause - If one person in a company is essential to the artist's career (a manager in a management company, a particular executive in a record company), they may ask for a key man clause, meaning that if that person leaves, the contract ends. Tough to get in contracts with major companies.

Label Deal - A multi-artist production deal (see Production Deal).

Litigation - A lawsuit, and everything that goes on between filing a suit (suing) and it ending either by a trial or settlement

Loanout - More popularly used in the 1980's for tax purposes, an artist or songwriter would enter into a personal services contract with a corporation she owned or controlled, which then entered into a contract with a record company or publisher in which the corporation would "loanout" the artist's services.

Manager, Business - When an artist gets to the point in his.her career that they have more money coming in than you can intelligently handle, they hire someone with (usually) an accounting background to make sure they don't blow it all. The business manager (of course) works on a percentage basis.

Manager, Personal - The person hired to help mold and oversee all aspects og the artist's career.

Mechanical Royalties - Usually referred to as "mechanicals," its the royalty payable to a copyright owner for the use of a song on a record. The payment of mechanicals are required by the Copyright Act. The "statutory rate" is currently 8 cents per song. The record company will try to negotiate this rate down, usually to 75% of the statutory rate, and limit it to 10 songs.

Merchandising - The use of an artist's name, fame, and likeness in connection with the exploitation of products and services (T-shirts and beer ads).

Name and Likeness - The term used to describe the exclusive right of an artist to grant to others the right to use his/her name and picture in connection with the commercial exploitation or marketing of products and services.

Net Income - Total income (gross) minus expenses and costs is "net income"

Option - Usually contained in record or publishing deals, an option gives the company the right to extend a contract for a period of time, for example another year or another album.

"P" with circle around it The symbol for copyright notice appearing on records and CDs which connotes copyright in the sound recording. Although the copyright to the underlying song belongs to the songwriter/publisher, the copyright in the sound recording usually belongs to the record company.

P&D (Pressing and Distribution - This is a deal in which an independent record label enters into an agreement with a distributor. The distributor, for a fee or percentage of income, distributes the record through its channels.

Packaging Costs - The record company deducts a percentage of the retail or wholesale price of the record for (supposedly) the costs of packaging the product. The artist royalty is based on the price after the deduction of the packaging (and countless other deductions).

Pass - When you shop your tape to record or publishing companies, and they aren't interested in you at this time, they "pass" on you.

Pass Through A clause most often used in independent producer deals. The independent producer contracts for an artist's services, and then attempts to make a deal with a record company. The "pass through" clause provides that whatever the producer gets from the record company, she/he will "pass through" (a percentage) to the artist

Performing Rights Societies - {ASCAP, BMI, and SEASAC} license for songwriters and publishers the right to perform songs publicly, and collect public performance royalties from such uses. Useres include radio stations, nightclubs, karaoke bars, anyone who uses music as entertainment.

Platinum Record - A platinum record is one certified by RIAA as having a minimum sale of 1,000,000 units.

Points - Royalty percentage points. An artist may say, "I just signed a record deal, I got 16 points," meaning the artist's royalties are 16 percent.

Power of Attorney - When you give "power of attorney" you authorize and empower that person or entity to enter into binding contracts for you. Not a good thing for the artist.

Premium Records - These are the records given away with a product to sell the product. ("Buy a tank of gas and get a SPITTONS CD Free!") A "standard" record contact will provide that the record company can do this and give you a much reduced royalty rate

Print Rights - Printed copies of music; sheet music. Not a major source of publishing income.

Product The demo,record, or CD. The "hard copy" of the songs and the artist.

Production Deal - An artist signs a recording agreement with a production entity (usually owned by a producer), who in turn signs a deal with a major label to deliver the artist and the artist's recordings to the major. Artist - Production Entity - Major Label (three players). (Also see independent producer.)

Promotional Records - Giveaways to DJs, radio and television stations, publications, etc. to promote the interest in and sales of the record. No royalties are paid to artists on these.

Public Domain (PD) Works - These are works that for a variety of reasons, nobody owns the copyright to. One reason is that the copyright period has passed, for instance, songs written early in this century. Another reason might be that there were no copyright laws at the time, Mozart's tunes. Or songs that you can't point to an "author", old Blues songs (but there can be copyright in arrangements of these).

Public Performance Rights - The Copyright Act grants to the copyright owners of certain works the exclusive right to perform the copyrighted work publicly. Perform a work publicly means playing a song (usually by playing the record) where a substantial number of people are. (The DJ plays a 2 Live Crew record at a dance club: 2 Live Crew gets paid for that "performance," their record company doesn't.) The definition also includes transmission of a performance by any means or device to a place or the public (The radio or in a GAP store). ASCAP, BMI, and SESAC collect these royalties. These are the performance rights applied to the underlying musical works, but until 1995, did not apply to sound recordings of the work. The 1995 Performance Right in Sound Recordings Act grants the copyright owner of the SR the right to authorize digital transmissions of their works, and receive compensation. Note: this applies only to digital transmissions, not analog.

Publishing - The person or entity that takes partial ownership and management of a song in exchange for their promise to sell or exploit the song.

Publisher's Share - The portion of the song income kept by the publisher after paying the writer her/his share. A traditional deal was 50/50 but "co-publishing" deals, which give 25 percent to the publisher, and 75 percent to the Writer, are the norm in the industry these days.

Recording Budget - After the record contract is signed, a recording budget must be submitted to the company by the band, or more usually by the producer, putting in black and white what the project will cost.

Recording Costs - The costs of making a recording. All costs are chargeable against the artist's royalties excluding the manufacturing costs. This usually includes the studio costs, the mastering costs, the food and drink, and limos the company so graciously send.

Recoupable - When the record company or publisher gives the Artist an "advance," they almost always get this money back from the Artist's percentage of the profits; they recoup the advance.

Release Commitment - The "standard" record contract usually doesn't provide commitment to commercially release a recording. Not releasing the recording does not necessarily end the recording contract.

Reserve Against Returns - When paying royalties pursuant to a recording contract, the record company wants to hold back royalties as a "reserve against returns." Thus, when CDs are returned, artists don't get royalties for those purchases.

Revisionary Rights - Rights that come back to the author upon certain events. For example, an artist signs a publishing deal and the lawyer successfully negotiates a clause that if the publishing company does not exploit the songs within four years, the copyright ownership will "revert" to the songwriter, and the publisher will have no further rights in the song. This is tough to get with the major publishers but can be negotiated with a smaller publishing company.

RIAA (The Recording Industry Association of America) The main trade association of the record industry, and the main lobbyist to Congress on behalf of the record companies.

Royalties - The proportional share of income the songwriter or artist receives as compensation for their song or performance, subject to the terms of the deal.

Showcase - The big gig where the record company A&R people are going to come and check the artist out. They might like the songs, but before offering a deal they want to see what kind of performing chops the artist has.

Sound Recordings You will hear and read this term because this is the term the Copyright Act uses. Sound recordings are defined as works that result from the fixation of a series of sounds (excluding those accompanying motion pictures or other audio-visual works) regardless of the nature of the materials in which they are embodied. "phonorecords" are the material objects, including CDs and cassettes, from which sounds can be perceived

Staff Writer - A songwriter who is employed by a music publisher and is given a salary. This is an "employee for hire" and the publisher becomes the "author" of the copyright of anything the writer composes during her employment. There aren't many of these gigs anymore.

Standard Contract - If anyone hands you a contract and says this is their standard contract, BEWARE! They are probably trying to make you believe that this is what everyone signs and you needn't seek legal or other professional advice before signing. Signing "standard contracts" can hang you up for long periods of time, be counterproductive to your career, and cost you a ton of dough paying a lawyer to try to get you out of a bad contract.

Synchronization License - To use a song in connection with a motion picture, video, or TV commercial, a license must be acquired from the copyright owner(s). The term comes from copyright law language which referred to the "synchronization of music in timed relationships with a visual image." Thus, a synchronization, or "synch" license.

Term - The duration of a contract.

Trademark - A trademark is a word, name, symbol or design used by a person or entity (a manufacturer or merchant) to identify his or her services/goods and to distinguish them from the services/goods provided or sold by others. Some examples: The Beatles, Coke, The Nike swish, Pop Tarts.

Trades The magazines devoted to the music business, Billboard, Cash Box, Pollstar. Gives the ins and outs, charts the sales of records, or concert grosses, gives the comings and goings of people in the industry, both artists and business people.

Wholesale Price - The price at which the record company sells records to its record store customers, usually half of the suggested retail price. Artists royalties in record contracts can be keyed to wholesale or retail prices; so the numerical royalty given by a company that pays on wholesale will be twice that of a company that pays on retail.

Writer's Share - The portion of the income from a song that the publishers pays to the writer; the writer's royalties.