Terms of the Music Industry Every Artist Should Know

As we all know, the music industry, especially in the last 10 years, has become a cut-throat industry. Artists of all types want to be able to release their music and put their stamp on the world, but navigating the industry can be a difficult one. We at DNB◉UNITED RECORDS are dedicated to helping artists better understand the industry as it will help them navigate through contracts and how to deal with the professional side that can some times be a bit ugly to say the least. Below are some common terms that you will find in almost all recording contracts or at least hear when dealing with record labels, publishers, distributors, and lawyers. It is wise to at least know what these terms mean before signing into any contract. You don’t want to trap yourself in a bad deal. The way to do that is to educate yourself. Just know your not alone, we are here to help. Although there are more terms to know, below are some of the major ones that stand out in most cases.

A&R (Artist & Repertoire): The person or group of people who sign new acts to a record label, basically a talent scout. They used to select material from publishers for artists signed to their label, hence Artists and Repertoire.

Assignment Of Copyright: The transfer of ownership of a copyright from one party to another, which must be in writing to be effective.

Audio/Visual Work: An industry term for film, television or any other visual production.

Author: The creator of “Intellectual Property” such as literary, musical and dramatic works; choreography; pictorial, graphic and sculptural works; audio/visual works and sound recordings. Generally the word author can denote composer, lyricist, record producer, choreographer, artist, photographer, writer or other creator (also see “Work for Hire”).

Background Music: Music used (other than as feature or theme music) that creates mood and supports the spoken dialogue of a radio program or visual action of an audio/visual work.

Blanket License: A license which allows the music user to perform any or all of millions of songs in a Performance Rights Organization’s repertory as much or as little as they like. Licensees pay an annual fee for the license. The blanket license saves music users the paperwork, trouble and expense of finding and negotiating licenses with all of the copyright owners of the works that might be used during a year and helps prevent the user from even inadvertently infringing on the copyrights of PRO’s members and the many foreign writers whose music is licensed by PRO’s with reciprocating blanket license agreements in other nations. See also Per Program License

Broadcast: The replaying of pre-recorded works to multiple listeners through various media or in a ‘semi live’ setting such as a bar or bookstore, and including radio, TV, web casting, pod casting, etc.

Clearance (Copyright): For the right to use music in most circumstances it must be cleared with the copyright owners. Clearance is needed for copying, not just for commercial use. It is normally negotiated through licensing directly with labels and publishers or other copyright holders.

Collection Societies: Organizations that Issue licenses to music users and share the license fees among copyright owners which are normally the record labels, publishers, writers and performers. See also Performing Rights Organizations.

Control: Control means the publisher (see Music Publisher) has the right to negotiate and execute all licenses for the “life of copyright” which according to U.S. copyright law is the length of the copyright owner’s life plus 70 years after his/her decease. The publisher licenses mechanical, print, synch and performance rights on behalf of itself and any of its rightful co-writers and/or co-producers. Any licensing fees or other royalties are collected by the publisher (the owner of the copyright) on behalf of itself and distributed to any co-writers, co-producers or other co-owners of the music.

Copyright: The legal right to exclusive publication, production, sale or distribution of a literary or artistic work. Copyright is granted by law in most countries and in the United States by a federal statute called The Copyright Act of 1976.

Copyright Arbitration Royalty Panels (CARP): As successors to the Copyright Royalty Tribunal, CARPs will consist of private citizens appointed by the Register of Copyrights to act as arbitrators in matters of setting periodic changes in the royalty rate for the compulsory mechanical license, as well as for compulsory licenses for distant signal cable television transmissions and public broadcasting. CARPs will also determine entitlements to the royalties received by the Copyright Office for the latter two licenses and under the Audio Home Recording Act.

Cover Songs: In popular music, a cover version, or simply cover, is a new performance or recording of a contemporary or previously recorded commercially released song or popular song. Originally, Billboard and other magazines which track the popularity of the musical artists and hit tunes, measured the sales success of the published tune, not just recordings of it. Later they tracked the airplay that songs achieved for which some cover versions are the more successful recordings of the particular songs. For complete details with related discussion and references, follow this link to an in-depth Wikipedia article about cover songs.

Exploitation: In music publishing, songs which are “exploited” create revenue streams which are the result of the publisher executing licenses and filing the proper registrations.

Dramatic Performances or Grand Rights: Dramatic and grand rights are licensed by the composer or the publisher of the work. While the line between dramatic and non dramatic is not clear and depends on the facts, a dramatic performance usually involves using the work to tell a story or as part of a story or plot.

Dramatic performances, among others, include:

(i) Performance of an entire dramatic-musical work.

(ii) Performance of one or more musical compositions from a “dramatic-musical work” accompanied by dialogue, pantomime, dance, stage action, or visual representation of the work from which the music is taken.

(iii) Performance of one or more musical compositions as part of a story or plot, whether accompanied or unaccompanied by dialogue, pantomime, dance, stage action or visual representation.

(iv) Performance of a concert version of a “dramatic-musical work.”

The term “dramatic-musical work” includes, but is not limited to, a musical comedy, oratorio, choral work, opera, play with music, revue or ballet.

Film Music: Music and recordings for film can be licensed from publishers and record labels. Unlike licenses for normal broadcasting or performance, rates for these master use and sync licenses are not fixed, so film (video, advertising, etc.) makers negotiate a price. Library and catalogue music providers offer ready made, pre-cleared recordings for a wide range of video (and other) applications.

Independent (Indie): Independent normally means record labels that are not “majors” or artists that are not signed with a major publisher or label.

Lead Sheet: A hand-made (usually) reproduction on paper of a newly-written song.

Library: A collection of musical compositions that are licensed by the publisher or administrator for use as background, theme, or score music, on radio, broadcast and cable television, films, or video productions.

License, Music: The right, granted by the copyright holder, for a given person or entity to broadcast, recreate, perform, or listen to a recorded copy of a copyrighted work. See also Mechanical Rights, Performance Rights Sync Rights and Print Rights Licensing.

Licensor: The owner of the licensed work

Licensee: The person or entity to whom the work is licensed

Master Use License: A phonographic copyright license to pay recording owners for music used in film, video, or TV soundtracks. There is no fixed fee for master use licenses.

Mechanical Rights: A mechanical right is the right to record and distribute (without visual images) a song for private use. Mechanical rights or a mechanical license must be obtained in order to lawfully make and distribute records, CD’s and tapes.

Music Publisher: A person that is authorized to license the reproduction of a particular musical work in a sound recording. (USC 17) More broadly, the publisher typically licenses mechanical, print, synch and performance rights on behalf of itself and any of its rightful co-writers and/or co-producers.

Per-Program License: A license similar to the blanket license in that it authorizes a radio or television broadcaster to use all the works in the ASCAP repertory. However, the license is designed to cover use of a PRO’s music in a specific radio or television programs, requiring that the user keep track of all music used. Also, the user must be certain to obtain rights for all the music used in programs not covered by the license.

Performance: The live performance of a musical piece, regardless of whether it’s performed by the original artist or in the manner it is best known

Performing Rights Licensing: The “blanket” licensing rights the “PRO”s administer with radio stations, television stations, clubs, restaurants, stores, digital streaming services, etc. Songwriters and publishers normally belong to one if they have any exploited songs. For the price of these blanket licenses (which vary depending on the size of the broadcaster) the broadcaster can play all the BMI, ASCAP or SESAC songs an unlimited number of times for a measured period of time. These ‘plays’ are tracked and the pool of blanket license money is divided in proportion to the number of plays and the value of plays.

Performing Rights Organizations: In the U.S. these societies (known as “PRO”s) include ASCAP, BMI, and to a lesser extent SESAC. Their fundamental job it is to keep track of every single performance or broadcast of all works protected under copyright.

Pre-Cleared Music: Music that is ready to be licensed for various commercial uses including video, film, advertising and the like. See also Film Music.

Print Rights Licensing: Sheet music, song folios, scores or notation in any printed or digital form released for sale. Once sold, printed music earns royalties from the print rights license which the publisher negotiated.

Production Music: See Film Music.

Public Domain: Refers to the status of a work having no copyright protection and, therefore, belonging to the world. When a work is “in” or has “fallen into” public domain it means it is available for unrestricted use by anyone. Permission and/or payment are not required for use. Except with respect to works eligible for restoration of copyright, once a work falls into the public domain (“PD”) it can never be recaptured by the owner.

Public Performance Rights: A public performance is one that occurs “in a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.” A public performance also occurs when the performance is transmitted by means of any device or process (for example, via broadcast, telephone wire, or other means) to the public. In order to perform a copyrighted work publicly, the user must obtain performance rights from the copyright owner or his representative.

Publisher’s Share: When publishers acquire (purchase) a copyright, they are acquiring the publisher’s share. Depending on the agreement, this is the share of the song ownership that can be bought, sold or sub-licensed. (see Sub-Publishing) The writer’s share always stays with the original author of the song or musical composition.

Publishing Administration: Publishing administration is limited to royalty collection. The publisher will not get additional customers for the compositions. The rate for administration is normally about 10%.

Record Label: A record label (or company) makes, distributes and markets sound recordings (CD’s, tapes, etc.) Record labels obtain from music publishers the right to record and distribute songs and in turn pay license fees for the recordings. Record labels may also invest in artists, promote recordings and collect earnings from phonographic copyrights.

Retransmission: A transmission of a performance is one that is sent by any device or process (for example, radio, TV, cable, satellite, telephone) and received in a different place. A retransmission is a further transmission of that performance to yet another place.

Registration: You or your music publisher registers your songs with a performing rights organization (ASCAP, BMI or SESAC) to get the song details in their database so the correct percentages of performance royalties can be attributed and paid to the correct party.

Your music publisher registers your songs with a ‘local’ publisher in a foreign territory so they can, in turn, register the songs with their local mechanical and performing rights societies (mechanical and performing rights organizations) so the correct percentages of foreign mechanical royalties and the publishers side of performance royalties are attributed and paid to the correct party.

Royalties: Royalties are fees paid to rights owners (normally record labels, publishers, writers and performers) for the use of their work. Royalty collections provide ongoing earnings of licensed songs from each sale or broadcast.

Sampling: Sampling or sample licensing requires record label and publishing clearance. There is no fixed rate for clearance so licensing costs can be negotiated with the publishers.

Score: The music that is used in synchronization to an audio/visual work, or the body of music composed for a dramatic-musical work.

Sound Recording: A sound recording refers to the copyright in a recording as distinguished from the copyright in a song. The copyright in the song encompasses the words and music and is owned by the songwriter or music publisher. The sound recording is the result of recording music, words or other sounds onto a tape, record, CD, etc. The copyright encompasses what you hear: the artist singing, the musicians playing, the entire production. The sound recording copyright is owned by the record label. The copyright in the musical work itself is owned by the music publisher, which grants the record label a “mechanical” license to record and distribute the song as part of the record.

Sub-Publishing: A contractual arrangement between a primary publisher of a song and a secondary or co-publisher to handle the exploitation, licensing and collection for the song in, for example, a specialty, private label or foreign territory market.

Synchronization Licensing or Sync Rights: Synchronization (or sync) license is the licensed right for a film or other audiovisual medium to use music to synchronize (match) to recorded images in an audio-visual product. It can be a commercial, video game, film, TV show, music video, DVD or website, etc. A synch license usually produces a negotiated fee for certain rights depending on the usage. Synchronization rights are licensed by the music publisher to film and video producers, ad agencies or other program or product producers.

Work For Hire: As defined in Section 101 of the 1976 Copyright Law, this is a work prepared by an employee within the scope of his/her employment, or a work specially ordered or commissioned for use by another person in accordance with a written document as a contribution to a collective work, motion picture, audio/visual and other certain types of works, the nature of which is specifically defined in Section 101 of the Copyright Law. In the case of a work made for hire the employer is considered the author of the work under the Copyright Law (and unless the parties agree, otherwise owns all the rights in the work).

Writer’s Share: The writer’s share represents the authorship of the song. While a copyright can change ownership many times; the writer’s share remains the property of the author. See Copyright for more details.

So now that you have the resource to better understand the music industry and some of the terms you may come across, you will be better armed to protect yourself in any contract dealings with labels, distributors, promotors, etc. We at DNB◉UNITED RECORDS want to thank you for taking the time to visit our site and read this post. Keep checking back for more great tips and tricks to better help you build your musical career! Remember, knowledge is power!