Financial considerations work sheet

1. Financial Considerations
 Music Royalties
Music royaltiesare paidtosongwritersfortheiruse of the musicusedwithinbroadcastedornon-
broadcastedcontentwhetheritbe viaa radioor CD’s. These royaltiesare generatedbythe licensing
of copyrightedmusicandare a primaryformof paymentformusicians.BothMusiciansand
Recordingartistsassigntheirrightstoa third partyfor managementinsteadof trackingasongand
seekingtheirpaymentindependently.The copyrightof asongis assignedtomusicpublisherswhile
masterrecordingcopyrightsare assignedtothe recordlabel.Withinthe UnitedKingdom,there are
twoorganisationsthatdistribute royaltypayment;PRSformusic,more specificallyMCPSwhichsits
underthe branch of PRS musicand coversand distributesonthe behalf of songwriters,composers
and publishersandthe other;PPLwhocollectand distribute onbehalf of recordcompaniesand
Performers.Inorderroyalties,beingregisteredwithPPLwilldistributeannual payments of UK
royaltiesplusquarterlyinternational royaltypaymentsandthe same canbe saidfor PRSfor music.
Writers/composers,Publishers,Bandmembers,ProducersandRecordlabelscanapplytojoinPRS
for Music to start earningmusicfromtheirmusicanddependingontype role (Whetheritbe
Composer,Recordlabel etc) donotneedtobe signedwithacontract witha musicpublisheror
record companyto join.Eachrole is differentonhow theycanreceive royalties,forexample a
record label doesnotneedto joinPRSforMusic, and instead theymayneedtoapplyfora license.
 Voice artistfees
The rate at what a voice artistmakesall dependsonhow professional the voice artistis,forexample
a starter voice artistwouldnotmake the same salaryas a professional voice artist.Alsothe lengthof
the advertdependsonhowmuchthe voice artistwouldmake,forexamplea30 secondadvertor
lesswouldnotpaythe same price as a 2 minute advert.There are manyfactorsthat define how
much an artistmakessuch as where the advertisbroadcasted;One thatplayson justradio,one that
playson justthe internetandone thatplayson bothinternetandradio(Andthiscan include
television).The locationof the advertalsohasan effectonmuchthe artist makes, forexample an
advertthat isonlyregional basedandis30 secondsor lesshasa rate of around£50 whereasan
advertaimingat the capital citywiththe same lengthhasa rate of £229.
 Rate cards
A rate card isa documentthatcontainsthe pricinganddescriptionsof variousadvertplacements
throughoutthe radio.These are usuallyusedasa guidance onlybecause the actual chargesvary
greatlyaccordingto the bargainingpowerof the advertiser.Rate cardsare usedall across all media

2. platformsrangingfromprintto radioto television. The rate all dependonhow bigof a radiostation
is,like aradio stationsuchas capital radiowouldnotbe chargingthe same rate as a community
stationsuchas Salfordradio.The timingisalsoa keypart of defining how muchthe price of the
advertwouldbe because anadvertthat isbeingplayedatmidnightwouldnotbe the same price as a
peaktime of the showsuch as lunch. Usingthe radiostationKennetRadio,Theirrate cardsfollowa
package system,forexample forthe silverpackage;Itincludes3x 30 secondpre-recordedspotsper
day for90 days(Usedwithinthe timeframe7am – 10pm) for the price of £129 whereasthe platinum
membershipincludes13x 30 pre-recordedadvertspotsfor£299. You can alsohave the pre-
recordedmessage playedontheironline streamtoeveryone whologsonbefore theyhearthe live
broadcast,thisoptioncosts£199 per month.
 Trafficking
Traffickingmeansthatthe mediaprovidedwiththe rightinstructionsonwhichadsorspotsare run
on whichdaysor days parts. Traffic isschedulingprogrammaterial,inparticularthe advertisements
for the broadcastday. Withinthe radioindustry,there isavital linkbetweensales(of advertisement
or commercial space) andtrafficinkeepingthe informationaboutcommercialtime availability.The
trafficprocessstarts bya salespersonmakinganagreementwithacustomeraboutacampaign,this
agreementiscalledasalesorderandit definesthe dateswhenadvertisementsare run and the
termsof the campaigns.The salesorderusuallyalsodefine the productgroupinorderto avoid
conflictswhile creatingscheduling,forexample tworival companiesadvertsplayed.Usuallya
broadcasterwoulduse broadcastmanagementsoftware thatallowsforautomationbetween
departments.Some software systemsare end-to-endandmanage the whole spectrumwhereas
othersspecialiseinspecificareassuchas sales.Correcttraffickingcaneithermake orbreakthe
successof an ad campaign,sothe broadcasterneedsto make sure the marketingorthe ad agency
has a systeminplace fortrafficking.
 Licenses
There isa lotthat goesintomakinga radioshow,for an example the costsof buying alicense for
playingmusicona radioshow.There are manystylesof licenses forwhatmusicaradio stationcan
play.A radiostationsuchas radio 1 whichplaysa wide selectionof genreswouldneedabigger
license incomparisontoastationsuch as XFMas theyhave a verystrict genre selection. Licenses
come in manystylesand forms,forexample youcanget a license foracommunityradiostationor
geta license forahospital radiostationthoughthese have limitationstoonlyplayingwithinthese
locations.
 productionbudgets
A radiostationwouldneedtoundergofinancial considerationssotheycancreate and seta budget
on howmuch theyare intendingtospendonadvertisementsfortheirradiostation.Dependingon
howbig the budgetisdependsonhowmuchthe marketingteamcan spendonvoice artistsor on
royaltyfeesif the advertwasto include asongor two. The scale of the budgetdependsonwhatcan
be spenton the pre-production,productionandpost,suchasresearchinginto hiringvoice actors
whetherbe knowncelebritiesorjustprofessional voice actors.