Rack-jobbers are record retailers that rent floor space, to sell Physical Records, from Big Box Stores and other large retail stores, where the store’s main business is not selling records.
Radio pluggers normally push specific singles, going to radio station playlist meetings, pushing to get the song they represent placed on a playlist.
Recording Agreements stipulate that the artist is not permitted to re-record any songs they have previously recorded, during the term of their current recording contract, until after the recording contract has ended.
Re-recording restrictions typically extend until the later of either:
- Date of delivery of the last Master containing the song + 5 years
- Date of the end of the term of the recording contract + 2 years
Re-recording restrictions can bind dropped artists as the Label will not want to release the artist’s album. Dropped artists are not allowed to record the unreleased songs for another label (or anybody else) until the re-recording restriction is over.
Artists need to consider the termination of the re-recording restriction in any form of written release agreement, at least for any unreleased recordings. The outgoing Label will often use this as leverage to get the artist or their new Label to buy the unreleased material from the outgoing Label.
Producer Agreements usually limit Producers, stopping them from recording or producing the same song, or songs, for any other artist or performer for 2 to 3 years after the delivery of the produced Master(s) or their later release.
Due to this broad definition and a negative covenant contained in the Recording Agreement, even if an artist records a song Master for use in a movie, the artist will almost certainly need permission from their Label, even when no soundtrack album is planned.
The customer is given free albums as an incentive to “join” the club.
In a Distribution Agreement, artists may retain record club rights. In practical terms this means that the artist may be able to negotiate a deal directly with record clubs. This could result in the record club paying an Advance as well as royalties. That said, Record Clubs are pretty well a thing of the past in the USA.
In the modern era, few record labels now make physical records themselves. Now, record labels invest in artists, promote recordings and collect earnings from phonographic copyrights
- equipment hire
- equipment transportation costs
- re-mixing and/or ‘sweetening’ costs
- producer fees (not royalties)
- personal transportation costs
- living expenses
- studio hire
- engineering charges
- session musician fees
- Label facilities and personnel etc.
Under Recording Agreements, recording costs are usually recoupable from Artist Royalties (but not from Mechanical Royalties).
Recording Advances are repayable, to a record label, from royalties earned on record sales.
Un-recouped artists in theory owe their record label money and may have to be bought out if they sign with another label.
Publishing advances are recouped from publishing royalties.
Not every cost for creating, marketing, or promoting an artists record is an “Advance”, i.e., a recoupable cost. Typically, recording costs, video production costs, artist advances and tour support have been recoupable from record royalties in traditional record deals, and writer advances and a few other costs have been recoupable from revenues other than the writer’s share of performance royalties in publishing deals (for example song demos and copyright registration fees).
Artists who signed a recording agreement (or a master license agreement) with a record company have royalty accounts that are administered by the record label.
- Revenues are deposited in the artist’s royalty account
- Recoupable costs are withdrawn from the artist’s royalty account
Royalty accounts usually come in two types:
- Artist royalties
- Mechanical royalties
- Artist royalties are paid for sales of records (digital or physical)
- Artist royalties are paid for license fees for use of the sound recordings (such as TV licenses)
- Mechanical royalties are paid to an artist when they are a songwriter on their recorded songs where the artist writes all or part and they are “embodied in” the sound recordings
In a traditional record deal Artist Royalties and Mechanical Royalties are kept apart, except in unusual circumstances:
- Indemnity claims
- Overpayments of either royalty (i.e. the label paid you more than you were entitled to);
- Union penalties that are your fault
- Unexcused over budget tours or recording costs
Depending on the type of deal, record labels might want to “cross” mechanical royalties with record royalties for more flexible recoupment, but not normally. This is known as Cross-collateralization.
If the record label has used the Mechanical royalty payments to recoup advances under the artist recording agreement, the mechanical royalties will not be available for recoupment, making it extremely hard to get a meaningful co-publishing deal.
To get back money invested or spent by a subsequent gain. The Advance is repaid until such time as the aggregate royalties equal the Advance. The “unrecouped balance” refers to the amount outstanding.
Recoupment deals mainly involve new artists, or artists without a proven sales history. It is a way of mitigating the risk of poor or an unknown level of sales.
Artists need to know the level of recoupable costs to be repaid from their royalty account. They also need to know what the recoupment rate will be. This means the rate by which revenue will be credited to their royalty account, per unit sold. Normally this will be the same as the “all in” rate, i.e. payable at the gross artist royalty rate, as defined in the recording agreement.
By converting the recoupment rate into a base money value, you can work out the approximate point at which breakeven wIll be reached.
If the total advance is $1000 and the gross artist royalty works out as $1, then the recoupment will also be $1 per unit sold, meaning 1000 units need to be sold in order to repay the advance, i.e. “break even.
In simple terms, although royalties are being earned, those royalties will be credited against the effective balance of -$1000 at the recoupment rate of $1 per unit. Realistically, you will not earn until the advance is repaid.
In this case, the artist would qualify to be payable for their first $1 when they reached 1001 units sold.
Artists are paid out every 6 months. Ongoing advances will be debited against the royalty account on a “rolling” basis. i.e. new advances, made during the accounting period, will also be debited.
Generally only for Bass cabinets. A reflex cabinet is one where you have the speaker facing the back of the cabinet and holes in the top and bottom of the cabinet to reflect the sound out.
A refrain is a line that is repeated from verse to verse. In other words, a Refrain is NOT a section. It is fundamentally part of a verse. Usually, though not always, at the end of every verse. Often it contains the hook/title and tends to be the most memorable part of the song.
The refrain is intended to be the most memorable part of the song. It is repeated several times so that it sticks in your mind.
Releasing records by established or breaking artists was staged with every bit of show staging as you would expect for the premiere night launch for a major movie. Formal launches are still used in the mainstream music industry but independent artists tend to be much, much less formal, to the point that releases have virtually no lead up process and a very informal post-release range of activities.
The Release Commitment is a provision within a recording contract that commits the Label to release an album. It also specifies the options available to an artist to remedy when a Label breaks this commitment.
Typically, a release commitment (in the United States) would likely include:
- A time limit (say 120 days) for the album release, after the album has been Delivered by the Artist to the Label.
- A time limit (say 30 days) for the Artist to notify the Label that they intend to exercise this contract provision, and so terminate the term of the record contract.
- A new time limit (say 60 days) for the label to release the album after being notified by the Artist of the intention to terminate on the grounds of a breach of the Release Commitment clause.
- A time limit (say 30 days) for the Artist to send a second notice to the Label that they intend to exercise this contract provision, and so terminate the term of the record contract.
Exactly what a “release” is, may or may not be defined within the recording contract. Artists need to be very careful here. They should ensure an adequate definition of exactly what constitutes a “release” is included in the Release Commitment.
As a consideration, the Release Commitment might stipulate:
- That the release is of a Physical Record
- The formats
- A minimum number of the initial production run
- A real world distribution
- A digital release onto the Internet
- A real world distribution
Release Commitments in US recording contracts relating to territories outside the United States are not usually worth much.
When releasing music, the tactic of Windowing uses a Release Window, to make the release available a number of weeks after broadcast, letting the marketing “buzz” build, before the release drops.
Some Record Labels still believe the Release Window gives them better chart position when the track eventually goes on sale.
The Record Label sets aside a pool of money from the Artist Royalties or Mechanical Royalties, money that otherwise would be payable to the artist or the Publisher. These Reserves are for the Record Label to cover the cost of any Returns of Physical Records that the Label may have paid Artist Royalties or Mechanical Royalties on.
Record Contracts often limit Reserves to “reasonable reserves” and/or to a percentage of Records shipped within a specified accounting period. The Record Contract should not allow the Record Label to include Artist Royalties or Mechanical Royalties generated by Digital Transmissions when the calculating reserves because Digital Transmissions cannot be Returned.
Most Labels liquidate reserves within 4 accounting periods. They also limit reserves outside of the United States to the size of the reserve, required by the Record Label’s foreign Distributor.
Distributors specify their Reserves within Distribution Agreements.
Resonators are the cymbal looking pieces in the center of a guitar which adds a higher frequency to the sound.
Dobro guitars are often used for slide guitar parts.
- through mail order
- at brick and mortar retail outlets, such as clothing or department stores
Retroactive to Record One
Under a Producer Agreement, royalties are often payable to the Producer as “retroactive to record one” but only after the recoupment of Recording Costs for the Masters produced by the Producer at the “net artist rate”. This is similar to the definition of Recoupment Rate for Artists.
This means a royalty rate equal to the All-In Royalty rates payable to the artist minus the corresponding royalty rates payable to all of the Producers entitled to a royalty with respect to the applicable Master.
The retroactive royalty is subject to the recoupment of any Advances paid to the Producer.
If the Advance is large, in relation to the Recording Costs, a retroactive payment may not be relevant, because the Advance is greater than the accumulated royalties.
In the United States and many foreign territories, Physical Records are sold on a consignment basis. In other words, a Distributor’s customers can return any unsold Physical Records to the Distributor and receive a full credit in return, as the return of the wholesale price paid by the customer for the returned Record.
Distributors use a full credit return policy to encourage retailers to keep more copies of the Physical Records in stock than the retailer might have without a full credit Return Policy being in place. This is especially true for releases from new/unknown artists.
This is multiple sound images, of an original source sound, blended together at the point of listening. The multiple images are caused by the reflection of the sound from walls and other surfaces or artificially created using electrical or mechanical reverberation units. See the Songstuff article on Reverb by following the link below.
Copyright Assignments are normally time limited or they are limited by some other condition including depending on the circumstances of the original rights-owner.
Reversion refers to the reversion of a Copyright to the author of the copyrighted material, such as an artist or songwriter.
Most Publishers will agree in a Publishing Agreement to a reversion of the Copyrights in the songs at some point in time.
Under a Songwriter Agreement, the Copyrights in the songs may revert upon the later of :
(a) the date ten years after the end of the term of the agreement
(b) upon the date the songwriter’s account becomes recouped
Songwriters commonly have the right to pay 110% of the unrecouped balance in order to become “recouped”.
Very few artists in the United States have the power to get a Label to grant them reversion rights in Sound Recording Copyrights.
RIAA is an abbreviation for the Recording Industry Association of America, which is a trade association that represents the major Distributors and some other Distributors in the United States.
Right of First Negotiation
This right obligates one party to an agreement to first negotiate with the other party to the agreement for specified period of time (e.g., 30 days) before making a deal with anyone else.
Under a Demo Deal, the artist may be required to negotiate a recording agreement with the Label fronting the Recording Costs for the demos before the artist can commence any negotiations with any other Label.
This is the music recording that you often hear when waiting for someone to answer a telephone call to a mobile phone, instead of the ringing sound that a caller would ordinarily hear after a telephone call has been placed.
Most often the recording you hear during call waiting is a recorded song.
Instead of a ringing sound, this is a recording that the recipient of a telephone call on a mobile phone hears alerting them that they have been called by someone. It normally plays until the phone is answered or the call is diverted to voicemail or a maximum number of normal rings would have occurred.
Ringtones used to be monophonic, single note sequences with simple synthesis. Monophonic ringtones were replaced with polyphonic, multi-simultaneous-note ringtones. These ringtones used chords and simple synthesis engines that had multiple sound generators… but no vocals.
It is now common for ringtones to be clips taken from commercial music Masters. Such ringtones are sometimes called “master-tones” or “true-tones”.
Because monophonic and polyphonic ringtones reproduce songs, but not the recordings of songs, ringtone companies just needed a Mechanical License from the Publisher(s) of the song. They did not need a Mechanical License from a Record Label or other owner of a Sound Recording copyright.
The Statutory Mechanical Royalty rate for ringtones is currently 24¢ per copy. See:
If a ringtone is just a spoken word recording, it is sometimes called a “voice tone.”
Many recording contracts are written loosely enough to restrict artists from creating voice tones or musical ringtones for anyone other than the Record Label.
Royalties are fees paid to rights-owners (normally record labels, publishers, writers and performers) in return for the use of their work. Numerous restrictions apply to usage, resulting in a variety of income sources.
RBP = SRLP – Packaging Charge
Where RPB is the Royalty Base Price.
Some Record Labels, such as those within the Sony Music Group, define the royalty base price as:
RBP = PPD – 10% (Distribution Fee) – Packaging Charge
Where PPD is the Wholesale Price of a Record.
Currently most Labels use:
RBP = PPD
In other words they have removed the Packaging Charge when calculating the royalty base price.
The runner is responsible for fetching guitar strings, food, drum heads, rented equipment or other items that will assist with the comfort of the artist or smooth operation of the studio or session. They may also be asked to deliver items to places like Fed Ex or radio stations.