What you don't know about the music business Pt 1

  Terms you need to know about the music business.

-        Did you know that most record deals don't even require the record label to produce a record, let alone distribute it?

-        You don't really have to register with the Trademark Office to get a copyright?

-        If we compose a song jointly and you just write the lyrics and I only write the music, we each own a portion of the music and a piece of the words? And that neither of us can use the music or the lyrics without compensating the other?

-        Some film music composers can’t even write music, much less create the sorry arrangements for each instrument of an orchestra?

Now you have obviously asked a lot of questions on what a royalty is, how to sell rights of your music to anyone, the right agreement to execute and all. But you barely get the needed details and answers you need just because some people love to hoard information. Well, worry no more.

The music industry is a thriving one. Piracy is still prevalent, CD sales are declining, and digital sales are failing to compensate for the loss from CDs. Record labels are losing money, laying off employees, and generally panicking. Furthermore, the global economy is sucking the big one.

Don't worry, there's some good news on the way. Digital music delivery is becoming a greater part of the industry. Demand for music is at an all-time high (despite the fact that pirates provide a lot of it), and we are seeing new ways to transmit music (such as the internet and mobile phones), which means music is now available to individuals who would not go into a record studio. It also means that artists may communicate with their audience in ways never previously conceivable. Consider the music sites SoundCloud and Audiomack.

As new ways to exploit music emerge, you may be wondering how musicians get compensated. You've come to the correct spot, my buddy. Almost all record labels demand on a cut of artists' earnings from non-recorded sources. In other words, record labels want a cut of what musicians make through song writing, touring, merchandise, fan clubs, and so on. Why would record labels do anything like this? Why would artists consent to this? Is it necessary for artists to work with a record label now that digital distribution is easier than ever?

Then you are at the right blog.

WHAT IS A RECORD?

Let’s turn to the basics. What is a record?

The contractual definition of a record in almost every record deal covers both audio-only and audio-visual media (meaning ones with both sound and visual pictures), such as videocassettes and DVDs. The definition of recordings also includes (and continues to include) any other technology known now or in the future that is capable of transmitting sound alone or sound combined with visual pictures. More significantly, the existing agreements define “records” as any type of music transmission for consumer use, whether sound alone or with images. This is intended to detect internet and other electrical signals. As you can see from these definitions, record deals can make life a bit tricky if you’re a recording artist and also an actor or actress in films.

MASTERS

The word master has two meanings:

1.      The original studio recording is referred to as a master since it is the master (controlling entity) from which all copies are created (the machines that make the duplicates are referred to as slaves—get it?). Think about the Tidal music streaming service. Tidal provides Master Quality Authenticated (MQA) to its subscribers and it is also unique for giving artistes and songwriters higher royalties gotten from the masters recordings.

Master recordings are now mainly done on computer hard drives, with cassettes becoming obsolete (although digital audiotapes occasionally pop up). These are multi-track recordings, which means that each instrument and vocal component is recorded on a different track or channel: drums on one track, guitar on another, voice on another, and so on. There are two masters – the original multitrack, and the finished two-track.

      The term "master" can also refer to a single song's recording. As a result, you might argue that an album contains "10 masterpieces" (ten picks). Because each segment was historically "carved" into vinyl, these separate recordings are also known as cuts.

ROYALTIES

Straight to the money talk. What are royalties in the entertainment industry?

Let me give you a basic concept.

My cousin, Nneka, is in the used phone business. She’s famous throughout the city of Abuja because she trades phones for anything. At one point, she traded a Samsung S20 phone for a set of a makeup kit, a set of cinematography tools, and an iPhone 12 pro (jokes aside, this actually happened). She then traded these items along with a portrait painting of Davido, for a four-year-old Lassa arp dog named Sparkle.

About that time, my girl and I were looking for a dog. We planned on having kids, and we wanted to test our parenting skills on something that wouldn’t use drugs if we failed. In trying to decide what kind of dog we wanted, we used to take Sparkle for outings on weekends. In a perverted way, we began to think of her gnarled face and drooling as cute. Anyway, Nneka decided she was going to breed her, and we wanted a puppy. So, I helped her and got a stud dog, through a sophisticated referral system. I called a place named K9 Bulldogs, which conjured up images of some suburban squire’s dogs lounging around on velvet pillows. Well, it turned out to be a dilapidated house in Lokogoma, the most impressive feature of which was its bulldog smells. But K9 had a brown and-white champion stud named Winston, so Nneka hired Dapo's dog(mufasa), and Sparkle got pregnant.

About this time, Nneka decided she wasn’t interested in the headaches and stress of small puppies. So, she enlisted the help of her friend, Emmanuel. Emmanuel’s deal was that she would take care of Sparkle and the puppies, and when each dog was sold, she would get half of the sales price. So, if a dog sold for sixty thousand naira, Nneka would get thirty thousand naira, and Emmanuel would get thirty thousand naira.

What does this have to do with records you ask? Well, your record royalty is very much like Nneka’s share of the Lassa arp sales proceeds. In the case of records, the artist (Nneka) turns the recordings (pregnant Sparkle) over to the record company (Emmanuel), who then sells the finished product (puppies). For each record (puppy) sold, the artist gets a piece of the price, and the company keeps the rest to cover its cost and make a profit.

Royalties are paid for each record sold. Why do I emphasize the word sold? Well, the companies give away free goods, also known as special campaign free goods. This started when the companies wanted to push out large numbers of a particular artist’s album. To get the stores to stock more of it, they gave away   10%   or more of all records shipped. Originally, these were short-term deals (a few months), but they’ve evolved into a near-permanent arrangement.

These free goods are essentially a discount on the price. The record company doesn’t get paid for them, so they don’t bear royalties.

No company is giving away free goods for digital sales. That’s because there’s no need to incentivize a digital retailer to stock more units.

You need the following Agreements handy if you need to be prepared for the music business venture.

• Artist Recording deal agreement
• Music License Agreement
• Trademark and Royalty Agreement
• Artist Agent Agreement
• Distribution Agreement (can be edited to contain music distribution)

We will talk about music publishing in subsequent articles concerning the music industry.