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Record Contracts & Record Company


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Record Companies & Record Contracts

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Record Contracts & Record Company

  1. 1. Music IndustryThe Record Label & Record Contractswww.musicstudentinfo.comChris Baker24th Oct 2012
  2. 2. Record Companies
  3. 3. The Record Label• Label Manager - responsible for running the label• A & R - networks for the label from talent scouting, to someone who mentors the band through to final recording• Studio Engineer - works to producer’s instruction during recording and post - production mixing
  4. 4. The Record LabelProducer – usually employed by the label to recordthe act. producers fee is charged to the artistsadvance, and can be 3 - 5% of PDPProduct Manager – responsible for ensuring that alabels product is monitored through recording todistributionBusiness Affairs – responsible for negotiating thedeal with the act
  5. 5. Record Deal
  6. 6. Types of Deal•Development Deal - act given studio time andproducer to produce sample tracks. Cost of thiscould be treated as a recoupable advance•Exclusive Recording Deal - act asked to produce acertain number of albums for label
  7. 7. Record Contract Clauses• Exclusivity• Territory• Term• Creative control• Advance - the amount of loan to the artist• Headline royalty rate – the rate of royalty paid to an act on records sold – expressed as a percentage of published dealer price 15% to 20% is typical
  8. 8. Contract Clauses• Some deals offer profit splits instead of royalties• Deductions – how the headline rate gets reduced (these can be for packaging, exports, club sales)• Recording costs• Real royalty rate - the net rate after deductions and reductions• Video• Name/likeness/website
  9. 9. Contract Clauses• Audit• Key man/side-man clause• Escalations• Licensing• Re-recording restrictions• Termination
  10. 10. Advance
  11. 11. AdvanceThese are loans repayable to the label• Label will charge what it can to an artist’s advance including the studio time and producer• Often an act will receive little by way of a cash advance• Advance is a loan and is recovered by the label from royalties payable on sales• Recoupment
  12. 12. Licensing Opportunities• Labels own the sound recording and can licence others who wish to use it• Broadcasting rights and performing rights are assigned to PPL• Overseas labels may wish to market the recordings – typically 20%• TV advertisers - negotiable fee• Independent film and programme makers -negotiable fee
  13. 13. Record Label Organisations• British phonographic industry (BPI) trade association with major and independent labels• Association of independent music (AIM) trade association for independent labels
  14. 14. Mechanical Rights• Refers to the royalty payable to the writer of any song recorded by the artist for a label• If the artist is the writer and has not assigned the music rights to a publisher then label can deal direct• For all songs recorded that have been assigned to a publisher or for which the writer is a direct member of MCPS the label must deal with MCPS• The royalty rate payable to mcps on ap schemes is 8.5% of the published dealer price - PDP
  15. 15. Market Shares• Majors - Universal, Sony/BMG, Warners have 80% of sales between them• Independents account for 20% market
  16. 16. Organisations• World intellectual property organisation WIPO – un organisation controlling copyright treaties• International federation of phonographic industries IFPI – representing the record industry outside us – negotiates with local governments and BIEM the mechanical rights organisation• Record Industry Association of America RIAA represents the record industry in the U.S.• BIEM represents mechanical rights societies throughout the world
  17. 17. THE END