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Legal Aspects of the Music Industr
Covers the concepts of: Recording labels/Companies,Contracts,Producers,Distributions,Copyrighting,& Publishing
61
Music
Not Applicable
11/02/2009

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Cards

Term
Name the Four major Distributing companies.
Definition
EMI.
Sony/BMG.
Universal.
WEA.
Term
What is a major-distributed indie?
Definition
It is an independent company that works under a major label, and is distributed by a major label.
Term
Describe a True independent company?
Definition
Financed by itself.
Distributed by independent distributors
Term
What is a "record"?
Definition
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]
Term
What's a master?
Definition
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]
Term
Explain the difference between mechanical royalties and performance royalties.
Definition
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.
Term
PPD?
Definition
Published price to dealers.
It is what the dealer pays to the record label. Currently is $12.05
Term
Royalties are paid on ______ of wholesale
Definition
Percentage %
Term
Free goods are _______?
Definition
Given to dealers as bonuses, premiums for free from record labels and generate no royalties.
Term
Promotional Copies are _________?
Definition
given to Radio and promotional companies, and do not pay any royalties.
Term
What are Returns?
Definition
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.
Term
Explain the concept of "Reserve for Returns"?
Definition
A label would hold on to some of the money so they could credit retailers who return products.
Term
What is a deficit in terms of Advances?
Definition
A defecit is the amount of money left in the advance that has not yet been recouped by royalties.
Term
Name some of the other areas the companies recoup money from.
Definition
Recording costs, Video costs, Independent promotion, Tour support
Term
T/F?
In a Cross-Collaterization agreement, the company can recoup money from any area under the contract?
Definition
True.
Term
T/F?
Escalations are NOT retroactive
Definition
True.
Term
T/F? Escalations apply to ALL records sold whether at a sale price or in different countries?
Definition
False. They only apply to records sold in the U.S. at the full retail price
Term
What is an advance?
Definition
It is a set amount of money to cover any recording costs,etc. given early with expectation of being recouped through royalties.
Term
Returns come out of an artist's__________
Definition
Gross royalties
Term
List the delivery requirements (9)
Definition
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.
Term
Master licenses?
Definition
If someone wants to use your song in a movie, they have to get a master license to use it.
Term
Regarding Greatest Hits albums, royalties can be ________________
Definition
Paid at the highest or lowest rate. or paid at the average amount.
Term
Multiple Albums?
Definition
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.
Term
Box set royalties are _________?
Definition
Negotiated on a case by case basis
Term
What is the DART act?
Definition
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)
Term
What is a Producer?
Definition
The person responsible for putting the record into a tangible form.
Term
T/F?
Recording cost are NOT charged with producing royalties.
Definition
True.
Term
Collection Deals?
Definition
A deal with no advance.
Term
A publisher can ensure collection of money from records sold in other countries through the use of ______________.
Definition
subpublishers.
Term
What does it mean to have all monies computed "at source"? (In regards to publishers & subpublishers)
Definition
It means the percantage remitted to the publisher from the sub must be based on the earnings in the country where earned,the source.
Term
Unclaimed monies are often referred to as _______
Definition
Black box monies.
Term
Joint ventures are?
Definition
Similar to a multi-artist or label deal, in which the production entity and the distributing record company are "partners" and split the income.
Term
Loan-out Corporations?
Definition
Enter into deals for the artist and "loans" their services to others for recording & performances, etc.
Term
Companies have you sign inducement letters or side letters which state that if your corporation _____________ then you will___________.
Definition
doesnt perform by delivering recordings; deliver them directly to the recording company.
Term
Contracts that involve direct contact between the record company and the artist are known as ___________.
Definition
Direct agreements.
Term
A single-artist deal is?
Definition
where the production entity makes an agreement with the record company for one specific artist.
Term
A multi-artist deal is?
Definition
where the production entity supplies recordings of various artists.Also known as a label deal.
Term
What are some of the negatives in a Single-Artist deal?
Definition
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.
Term
T/F?
In a production deal the producer should give the artist rights without approval from the recording company?
Definition
FALSE.
Term
List some of the differences of a multi-artist deal from a single artist deal.
Definition
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.
Term
In a Pressing and Distribution (P&D) deal ___________________.
Definition
The company agrees to manufacture records for you and then distribute them solely as a wholesaler.
Term
Upstream deal?
Definition
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)
Term
What's a copyright?
Definition
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.
Term
What is copyrightable?
Definition
A work that is original & has sufficient materiality to constitute a work.
Term
How do you make a work copyrighted?
Definition
You simply commit it to a tangible form.
Term
What are the rights you get with a copyright(5)?
Definition
(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.
Term
Compulsory Mechanical licenses?
Definition
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.
Term
What are the conditions that must be in place for a Compulsory mechanical license to be granted(5)?
Definition
(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.
Term
What is the Statuatory mechanical royalty rate?
Definition
9.1 cents per song (sold), or 1.75 cents per minute of playing time.
Term
Is a 5 1/2 min. song paid the same statuatory mechanical royalty rate as a 6 min. song?
Definition
YES. If a song is over 5 minutes it is paid the same as a 5 minute song.
Term
Controlled composition clause?
Definition
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)
Term
The Controlled composition clause would try to limit royalties in what two ways:
Definition
(1)Rate[free goods,reduced rates,public domain arrangements,min. statuatory rate] (2)Rate per album[multiple,Box set]
Term
T/F?
Digital downloads are immune from controlled composition clauses.
Definition
TRUE.
Term
When a song is played on the radio, the radio gets licenses from _____the money goes straight to the _____. There is ___ artist share of ______.
Definition
(1)ASCAP,BMI,SESAC.
(2) Writer & publisher.
(3)no.
(4)public performance.
Term
T/F?
Movie Theatres are exempt from generating public performance royalties?
Definition
TRUE.
Term
Synchronization is _________
Definition
when you "synch" or place music to visuals.
Term
Transcription is _________
Definition
When you synch audio with audio. (i.e. radio commercials)
Term
The term "In-context" describes what?
Definition
When a piece of music is use in a movie trailer the EXCACT SAME way it's used in the movie.
Term
The term "out of context" refers to?
Definition
When a piece of music is used in a movie trailer differently than it is used in the movie.
Term
Which fee would be higher: In-context or Out of context? why?
Definition
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.
Term
T/F?
Audio streaming on demand, webcasting, podcasting, and subscription services are all forms of electronic transmission and have no set royalty rates.
Definition
True.
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