Online Music Business Resource

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Contents

Just Published – “Where do you want to be? – a business planning manual for jazz music students and musicians.”

1 Online Music Business Resource

Where Are You Now?
What Do You Have In Place?
What Do You Need?
How Do You Take The Next Step?

2 Marketing & PR

3 Finance

4 Law

5 Copyright

Just Published – Where do you want to be?

“Where do you want to be – a business planning manual for jazz music students and  musicians.” by Chris Hodgkins has just been published and is available as a free download – just fill in the form below.

Where Do You Want To Be 5 001 “Whether you are a musician, a representative or a music student you will find this manual to be a valuable guide and companion on your journey through the ever changing and evolving music business.  And as a teacher… I shall definitely be using this manual with my students.”

Debbie Dickinson, Senior Lecturer Creative Practice, BA Programme Director, Culture & Creative Industries Centre, Department of Sociology, School of Arts, City, University London, 17 April 2017

“This manual provides a comprehensive guide to structuring the day-to-day work load and of managing personal development with a strategic approach to building a successful musical career.

The book raises the question of “How the broadening of our own industrious skills can enhance our creative opportunity”. Put so succinctly, as Hodgkins does within this clear and methodical guide, we’re left inspired to be more efficient with our time – there’s no reason why the pursuit of a creative and artistic journey, shouldn’t lead to a prosperous outcome.”

Jamil Sheriff, Curriculum Leader for Jazz, Leeds College of Music.

“When I retired from Jazz Services one of the first items of work on my action programme was to write a business planning manual for jazz music students, jazz musicians and musicians generally that would be free and available online.”

Chris Hodgkins MBA, DipM, FCIM.

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1 Online Music Business Resource

At Jazz Services Chris Hodgkins set up the Online Music Business Resource with Debbie Dickinson of City University. Jazz Services restructured and changed its name to Jazz UK and has since been wound up and its remaing assets transferred to Musictank.  Jazz Services commissioned Debbie Dickinson of City University to develop a definitive guide to managing your career. With help from Noel Dennis of Teeside University Business School and Mykaell Riley of Westminster University and financial support from the Arts Council England’s lottery funding, the Online Music Business Resource (OMBR) was able to draw on a wide breadth of professional insight and experience, in order to generate a wealth of information and materials relevant to the current climate.
The OMBR contains detailed information and advice on Finance, Law, Marketing & PR, Recording and Copyright and much more, but before you get bogged down in the detail, it’s worth spending some time considering where you are now and what you already have in place:

  • Where Are You Now?
  • What Do You Have In Place?
  • What Do You Need?
  • How Do You Take The Next Step?

In order to figure out what you might need to do to move your career forward, it’s always worth looking at what you have achieved to date and what resources you have available to you.

Apart from making you feel better about what you have done it also helps to identify the areas that need some development or input. Most of us find that we have lots of resources in some areas and less in another. Take a moment to think about where you are now in the following key areas –

  • Creative output
  • Writing music
  • Live work
  • Promotion
  • Financial

What Do You Have In Place?

In order to focus on what you need next to develop your career it’s a good idea to look at the strengths that you have and what you have in place in the different key areas of your work.

  • Creative output – do you have a regular outlet for your music and recordings?
  • Writing music – do you have musicians to play your music?
  • Live work – what gigs have you done and do you get re booked?
  • Promotion – do you have a regular fan base that you are able to contact easily?
  • Financial – what resources do you have?

It’s also useful to identify where you are on your journey:

Starting out – maybe you are learning your instrument and playing with some friends
Semi pro – you may have a part time job and doing some local gigs, as well as some functions, weddings
Professional – you may have quite an established following and feel like you want to move onto the next level
Music student – you may be at college and wanting to develop some contacts in the music business
Other – maybe you are playing an instrument and drawn to jazz but not sure if you want to get involved in playing only, maybe you have interests in the organisational side of the music business.

What Do You Need?

These can be more tools or contacts – at this point its useful to just list the tools that you need, not worrying about how you are going to achieve it.

There are questions by each heading to help you think about the different areas and there will of course be things that you think of which are not listed.

  • Creative Output – are you happy with the music that you are performing and the outlet that you have for it? Or are you thinking that you may need a new project or band or a new recording?
  • Writing Music – have you copyrighted your music if you are a writer? Do you have a publisher? Are you getting royalties for the use of your music? Could you pursue commissions? Could you write library music? Are you stronger as a lyric writer or music writer?
  • Live Music – Do you want to expand your circuit and do more national or international work? Do you need to get an agent in different territories? Are you building on the gigs that you do? Choose a scenario – what is your ideal gig? How will you go about getting it? What contacts would you need to make it happen? How would you find them? How would you approach them? How would you negotiate? What are the tools you’ll need for getting the goals? What’s the next goal? What do they need that you can provide? How do you build on this achievement?
  • Promotion – Do you have a website? Do you have a Twitter account or Facebook page? Do you have an EPK (electronic press kit)  with biography, good photographs and flyers or posters to send to promoters? Do you have reviews?
  • Financial – Work out how much money you need in the short, medium and long term (ie 1,3 and 5 years). This is helpful to do as it focuses the mind on how much income you need and can help you to decide on which areas of your career you need to focus on to help you achieve your financial targets. Do you have a good system for keeping your financial records.

How Do You Make The Next Step?

These can be more tools or contacts – at this point its useful to just list the tools that you need, not worrying about how you are going to achieve it. There are questions by each heading to help you think about the different areas and there will of course be things that you think of which are not listed.

Creative Output – Are you happy with the music that you are performing and the outlet that you have for it? Or are you thinking that you may need a new project or band or a new recording?
Writing Music – have you copyrighted your music if you are a writer, do you have a publisher, are you getting royalties for the use of your music, could you pursue commissions, could you write library music.
Are you stronger as a lyric writer or music writer – Further information can be found in the Setting up a record label section.
Live Music – do you want to expand your circuit and do more national or international work. Do you need to get an agent in different territories? Are you building on the gigs that you do. Choose a scenario, what is your ideal gig, how will you go about getting it, what contacts would you need to make it happen, how would you find them, how would you approach them?

2 Marketing & PR

Promotion

There is loads of stuff out there on marketing and publicity. In this section we are looking at promotion in the context of being jazz musician. There are promotional tools that are important to have in your armoury but also it’s important to remember that your key area of promotion is when you are on stage. Are you and your musicians rehearsed, do you have an agreed set list and all know what you are playing, do you arrive on stage on time or do you keep the audience waiting, do you speak to the audience, do you have records for sale and invite people to join your mailing list, do you announce yourself so that people who arrive during the set know who you are. All of these things are promotion and give out messages as to who you are and where you sit in the jazz universe and on your own trajectory.

This section looks at developing your promotional EPK (electronic press kit), developing your website with download potential and running a digital marketing campaign.

Developing a promotion pack

Look at the tools that you need and how best to develop them. Like everything in life you can have the Rolls Royce of promotion packs or you can have a more modest model that does the same job and have the same components but maybe isn’t quite as all singing and all dancing as another model. In this section we will outline the key components of different parts of the promotional tools that you are likely to need – the packaging that you decide to put around them will be determined by your needs, budget and taste. For more information about marketing you can download the Where Do You Want To Be and Marketing Your Band

Here are the key components of an EPK – electronic press kit, particularly for overseas work.

Key components of your EPK

Physical press kits with hard copies are a thing of the past and have been replaced by the electronic press kit. The EPK, as it is called, is a traditional promo package in digital form that is held on a musician’s band’s or their band manager’s website. You can create your own EPKs, with the free programs and widgets available and you will find them on sites like SonicBidshttps://www.sonicbids.com/electronic-press-kit/and ReverbNationhttps://www.reverbnation.com/band-promotion/press_kit

What to include in an Electronic Press Kit (EPK)?

An electronic press kit should always contain the musician’s biography and details about CD or online music releases. The EPK can also include press photos, videos, upcoming tour dates, online box office details, backline requirements and other marketing and gig information. The content in EPKs is geared to providing the press or promoter with all information to include in a program, review, or article. Here are a few of the things you should consider including in your EPK.

  • Biography and Discography – the bio should command a reader’s attention and communicate the band’s music.
  • A separate section should contain a discography or details of the latest recording with reviews. Just cherry pick the odd sentence from each review that puts the band in a good light. Do not include the whole review. Samples of Your Music – The EPKs should include complete tracks of music.
  • Your gig listings – If people do not know when and where you are playing they cannot turn up. Your gig listings will help you build your audience. The gig listings should be kept up to date.
  • Stage plan – If you are playing at venues, festivals, or gigs that feature more than one band, the stage plan gives the stage crew and sound engineer the information they need and will save time on the gig.
  • Technical specification –  it’s also useful to send a tech spec for the band as well, giving information about which bass and guitar amps, drum kits, piano requirements and any mic requests. Also particularly if a festival, it’s useful to send along any rider the band have, for example, soft drinks, bottles of beer, wine, any back stage food or nibbles etc.
  • Photographs – A picture paints a thousand words and helps to tell a musician’s story in addition to the music. EPK photos may include headshots, band and promotional shots, CD cover art and liner graphics. Photographs are important for two reasons. The first is that newspapers, magazines and periodicals may print them or at least hold them on file for future use. Secondly venues, festivals etc. will, if the quality is good enough, print them in their brochures. The photographs should be interesting, not too posed and need to be close up shots. They must be in electronic format, of a decent file size. There are a number of good photographers out there that are reasonably priced.
  • Videos- Promotional videos give your current and new supporter and promoters or other fans a chance to watch a live performance. They will also provide reporters and other media outlets with shareable material they can post.
  • Press and media reviews – Your EPK gives you the opportunity to present any press coverage including reviews and interviews along with endorsements from blogs, radio and if you are lucky, television stations.
  • Summary sheet – the summary sheet should précis all the information onto one page.
  • Your contact information – It is essential that all your contact information is on every section of the EPK

How to build an effective website with downloads

You can design a web site so consumers can find it quickly, navigate it easily, find the product they’re looking for, sample it quickly, buy it securely and recommend the whole experience to someone else with ease and incentive. As a trader assume that all consumers have a zero second patience threshold when online….we’re all consumers so ask yourselves what you like about other sites and why – and more importantly what you don’t like about other sites and why.

If you have the financial resources you can find good developers by looking at web sites you like and searching for the “powered by” link which is normally at the bottom of the page or in the about section. Then go to their web site. Or you can look at free sites such as WordPress which are relatively easy to build

Good developers will have a large portfolio of like-minded clients available to see on their site. This is also good news for you because good developers also file and reuse their web site templates to customers who don’t want to spend too much money and don’t mind a site that’s redesigned from an existing template.

If you don’t have much money (eg: £300-£500) you might be able to persuade a good developer to reconfigure the font and colour scheme of an existing template and then send them a well written site map with all your content so its easy for them to upload it and get it made.

A good site map means a 3-4 page documents that literally has headings like HOME PAGE, REVIEWS, SHOP, ABOUT and then the exact text that you want under each section (developers don’t write, they develop, so don’t expect them to). The mor e detail a developer has from you the less time he needs to develop and the less changes he needs to make – and time and changes = £££).
Key elements to consider when building a web site are:
The right name. Choose a clear and succinct url (www.jazzservices.org.uk). Keep it as simple as possible and avoid misspelling a name just so you can have it sound like the name when you say it. Search engines like to find names and ifthey can’t find your name because you misspelled it then it simply won’t find it with the result that less people will find you.

Clear navigation.

Registration. Give your visitors an incentive to give you their name and email address. This could be through a backstage area membership with a free track, a video, an exclusive remix, a podcast interview, a competition, a signed CD and poster, numbered limited edition album artwork prints, etc etc.

Quick loading samples. Keep audio and video samples Kbps light, easy to find, quick to load and fast to reselect. Test this when it’s up and running off numerous PCs and Macs via friends and at Internet cafes before you start spreading the word. A streaming audio player. Your home page (and other pages) can contain an embedded audio player that streams your tracks while the consumer browses. This offers you a good self-marketing platform without threatening your download sales. The stream cannot be downloaded and the streamed content can be clipped versions of each song as opposed to full versions. In addition you can title each track and embed a link behind each title that clicks through to the track available for sale as a download.

Reviews and live dates. When you get them put them into the site and link them to the venue site or the review site (magazine, fanzine, paper or TV/Radio show). If you do, email the reviewer or listing agent and ask them if they’ll do the same and link back to you from their site. Not all will but every one that does is another free signpost out there towards your site. Always look to maximize the amount of external links on other sites to your site. Do this forever, all the time.

The download shop. You can either do this on your own or pa someone to set it up  or do it for free with other sites that will do it for you and them just link to them. Here’s how to do both:

Online Promotion

The Internet has revolutionized the independent music industry no matter what genre and now, more than ever, the DIY ethic of music distribution and marketing plays an essential role in reaching, maintaining and growing a targeted fan base.

Prior to the Internet all marketing was by and large known as “interruptive” marketing by the trade. This word referred to marketing strategies and tactics that “interrupted” the daily life of a consumer – Tescos style of marketing.

Digital music distribution

See above in the web site section for a more detailed breakdown but you can either digitize your content and give it away for free as MP3s on your site, pay a company like Emusu to create and manage your own download store, or do non-exclusive deals with as many download providers as you can who offer free upload and service with a %age of sale per download accounted monthly or quarterly (ie: Tune Tribe, Bandwagon, IODA, Uploader, etc).

You can also explore some of the major labels, who all have digital departments, as they may do a label deal with you to get all your content and future releases on to iTunes, Napster and some of the bigger players for a percentage in addition to the percentage taken by iTunes etc. This can have its benefits in the early stages of a label because your content does get on to iTunes etc quickly but later on, when the label has grown more, you may wish to deal directly with the big stores in which case keep the deal with the major label annual and under review.

Copyright cleared promotional photos

Digitize the photos you want to use and upload them on to the web site – some for consumer use and some for press use only. For press use only create a password protected page of the site that has a separate url eg www.freda.bloggs/press. Once there the journalist can input a username and password unique to them and access an entire electronic press kit (EPK) that just sits there being updated by you as and when. This can include press release, high and low resolution photos, full length review tracks, video clip interviews, band logos, album art work etc.

Video and Podcasts

Sites such as Youtube are incredibly popular. Not only can you upload your music videos for all to see and link to you can add any sort of video (within reason) so if you’re in the studio creating new music take an hour out and home video some acoustic versions of your tracks and the band mucking around so you have lots of additional video material that fans love later one.

The same goes for podcasts which are audio programmes made available for free to iPod users via the podcast site. When recording, or after, conduct an audio interview with the artist/s and play a few clips of tracks and additional acoustic noodlings and then assemble it all into a 20-45 minute audio programme that can be uploaded for free on to www.podcast.org and made available to anyone with an iPod. The trick, after it’s there, is to link it to and from your fans as you would any new piece of worthy band information.

Digital Marketing campaign

A digital marketing campaign for your release can be a free / low cost and reasonably easy exercise in the beginning for an artist.

It entails you making a list of all the online Jazz lifestyle and fanzine sites that you can find. Then do the same for similar genres (blues, folk, acoustic, rnb, swing, bluegrass, country etc). Then, when your site is ready and working, send out the CD press release to each site for review. When the reviews come in cut and paste them into your review section, link to their sites from yours and vice versa, and then tell your fans about the reviews and ask them to do the same.

Also offer each site the same track of yours as a free download or stream on their audio player / lifestyle chart that they might have on their homepage. They love that and will promote you more by using it.

Include free digital banners or buttons with the CD / press release if you have them as some sites may include it with a review. If you do this remember to ask them to embed the url for your home page behind the button or banner so when people click on it your site comes up.

Do the same thing with other exclusive content like podcasts or video interviews.

Beyond that there are numerous digital marketing companies who will do the same thing for you and take a fee but in addition the good ones will ensure that your buttons, banners, photos, reviews, exclusives and free downloads all make the home pages of major and independent retail and lifestyle websites at the same time. This is where campaigning becomes an art form in its own right and a good example of such a company would be Hyperlaunch based in Bristol although there are several other big players.

Shop for them as you would anything else of worth to you…shortlist a few, visit, compare, request references, value price over service and see if you can agree performance benchmarks to the service promised then go for it. It’s all risk remember – just try to minimize your risk to reward ratio as much as you can at every turn.

E mailing lists and fans

Your email lists and the means to keep in contact with your fans are central to developing an audience and being attractive to promoters, record companies and agents. Nowadays the emphasis is on what’s called ‘permission marketing’ – here is a little background and explanation of what these terms mean.

Prior to the Internet all marketing was by and large known as “interruptive” marketing by the trade. This word referred to marketing strategies and tactics that “interrupted” the daily life of a consumer – Tesco’s style of marketing.

While marketing companies worldwide sought new and inventive ways to interrupt our daily routines they were continually aware that “interruptive” marketing had its limitations. It was difficult to quantify how many people saw the advert and it was even more difficult to interact with them and build a commercial relationship. One just hoped that because they engaged the interruptive ad during a subconsciously susceptible moment that the message delivered would translate into a future sale at a later date.

Then along came the Internet…

All of a sudden marketing could not only find and reach a targeted audience on a world wide level it also knew who their consumers were socially, geographically and demographically and, through the collection of email addresses, companies could finally strike up a meaningful, two way, commercial relationship with their consumers…the holy grail of marketing!

Costly and restricted “interruptive” marketing campaigns gave way to “Permission” marketing campaigns using the tools of the Internet mixed with cross-media incentives to use the Internet. The name “Permission” marketing was coined because the brand continually seeks “permission” from the consumer to interact or sell to them via a newsletter or exclusive backstage / fan area or competition incentive or option to get new products or services before anyone else etc.

Permission, if granted, is normally done so through name and email registration or the input of additional consumer information – “If you give me your mobile number I’ll send you text alerts of the band’s UK tour diary”. The term, Permission Marketing, was originally coined by the US Internet marketing guru Seth Godin who wrote a book of the same name which is highly recommended.

When it came to permission marketing techniques music, and the music industry, were ideally suited to take advantage. Music could travel over the internet with ease but, more importantly, “interruptive” marketing was costly, restricted and largely ineffectual when it came to cross selling music catalogue (ie: “bought this artist did you?… how about this one then?”). Permission marketing radically changed this for labels.

Record labels, publishers and music retailers worldwide had little or no knowledge about the consumer that walked into a high street music store, spent 25 minutes browsing, selected three products from three separate genres, paid for them anonymously and then walked right out of the shop door. Walking, talking, living goldmines of consumer information and future sale opportunities breezed in and out of record stores worldwide on a daily basis without leaving any consumer identity or product feedback. What a waste!

  • With the Internet, digital music stores could tell so much about you it was hard to take it all in:Who you were (register your name and email for an account)?
  • Where you lived (where shall we send the CD to when you’ve bought it)?
  • Were you male or female?What day was your birthday (we’ll send you a voucher)?
  • How long did you spend in our store (in seconds) and what made you leave so soon?
  • What did you look at (every product you clicked on and in what order ie: did one product subconsciously trigger you to search for another similar or did you read a consumer’s review and look for it)?
  • What did you buy in the end?
  • Do you want to join their fan clubs and get exclusive access to important new stuff from them in the future before anyone else can?
  • Seeing as you bought that don’t you want to go and see them live too because you can get £x off their next show that visits your town right here?
  • If you bought that, that and that, perhaps you might like this and wouldn’t you just like to know that you can also buy recently re-mastered back catalogue or new live performance CDs? Did you like the in-store experience (because if you can recommend a friend via email to us we’ll give you some more vouchers in return for their email)?
  • If you forget to come back or remember where you found us can we drop you a reminder of how great we are to shop with every month or so?

“Permission” required for all of the above – hence “permission” marketing….and the cross selling upside – huge! So keep those lists up to date.

3 Finance

It’s important to set yourself up with a good financial record keeping system that you keep up to date. I always recommend that musicians have 2 bank accounts one for their personal income and expenditure and one for their business expenses and income. This way it keeps things clear and also helps you to see that you are a business, regardless of how small or large that income is. This is particularly important if you are getting into recording and selling a CD or receiving gig fees and paying out musicians as you need to be able to run a separate budget for these activities.

What are financial records?

  • Annual accounts
  • Income and expenditure records Receipts and invoices
  • Annual Self assessment tax form Bank records
  • Credit card records
  • VAT

Self employed or employed?

You can be employed in one job and self employed in another. For further information contact: https://www.gov.uk/browse/business/setting-up

When you are self-employed, you’re responsible for paying your own tax and National Insurance contributions. Keeping full and accurate records from the start will make it easier to work these out. Broadly speaking, after your first year in business, the tax you have to pay will be based on your profits for the previous tax year.

National Insurance contributions

Most self-employed people pay two classes of National Insurance contributions

You usually pay 2 types of National Insurance if you’re self-employed:

  • Class 2 if your profits are £6,025 or more a year
  • Class 4 if your profits are £8,164 or more a year

You work out your profits by deducting your expenses from your self-employed income.

How much you will pay:

Class Rate for tax year 2017 to 2018
Class 2 £2.85 a week
Class 4 9% on profits between £8,164 and £45,000
2% on profits over £45,000

Exempt and special groups Some people are exempt from Class 2 contributions. These include anyone with a Small Earnings Exception certificate.

Tax year

A tax year runs from 5 April to 6 April.  You can complete a  self assessment form online which will work out your tax bill.

After the first year the tax office will ask you to make some payments on account for the next year’s profits. These are based on the previous year’s accounts and you can ask them to be reduced.

You need to register within 3 months of finishing college.

VAT

Should you register for VAT? You will probably have to register for and charge VAT if your taxable turnover reaches, or is likely to reach, a set limit (over £85,000 in 2017)

4 Law

In this section we’ll look at contracts:

The 3 main types of contract are between musicians, managers, record companies and publishers.

All musicians during the course of their careers with have to enter into music industry contracts at one time or another. Indeed managers, performers, promoters, record companies and publishers also enter into contractual arrangements. The law governing music contracts is the same as the law governing all other contracts.

All that is required from a music industry point of view is an understanding of what is needed in such contracts, how they work and the affect on the contracting parties careers.

There are three main contracts in an artist’s career, namely:

  • Management contract
  • Record contract
  • Publishing contract

There are also a number of subsidiary contracts, namely:

  • Merchandising contracts
  • Sponsorship agreements
  • Agency agreements
  • Band agreements

Management Contracts

  1. Who is the manager?

You will need to investigate the identity of the manager, his/her expertise, financial status and standing in the industry. A good manager is worth their weight in gold, a bad manager can end up doing a lot of damage to an artist’s career. Talk to the other artists that have been represented by the manager find out what their experiences have been. If relationships have turned sour, find out why.

  1. How long is the contract for?
  • Consider the term of the agreement, do not lock yourself into an agreement which could prove to be unproductive.
  • Impose conditions on the manager to ensure s/he obtains a recording agreement with a major record company within say, the first twelve months of any management term, check if s/he has a clause that gives you the opportunity to get out of the contract if you want to.
  • After the second year ensure that a reasonable income level has been reached so that if you are not earning a certain sum of money you can again get out.
  • Do not enter into a long term agreement. Three years is usually right and in some cases up to five years may be acceptable. Do not agree to a roll over term as this may lead to bad habits. The management situation should be reconsidered at some point from both the artist’s and the manager’s point of view.
  1. How much money does the manager get paid?

Consider the percentage payable to a manager. Twenty per cent is the norm although established artists often agree to pay only fifteen percent.

  1. How does the manager calculate his/her commission or wages?

Understand the basis upon which commission is calculated.

Managers should not commission recording costs, video costs, producers’ advances and royalties, recoupable tour support and the like. Managers should not commission live work on a gross basis (before costs have been taken out) but on a net basis (after costs have been taken out) so that the artist does not make a greater loss than he or she is making in the normal course of events, due to the management commission. Always limit live management commission to income earned after the cost of PA, lights and agents have been paid.

  1. What happens when the contract ends?

Consider how management commission is considered after the end of the term. Managers should only earn income after the end of the term on recordings made and compositions composed during the management period and there should be a cut off point at some point in the future. In any event full management commission should no longer apply after the end of the management agreement, there should be a reduction tailing off at some time completely.

  1. Who keeps track of the money?

Consider the accounting provisions. Make sure that if the manager does collect your money s/he keeps proper books and records, s/he keeps personal money in a separate back account from that of the artist which bears interest and that the artist has the right to inspect the manager’s books.

  1. Who is employing whom?

The manager is employed by the artist and not vice versa. You can consider the manager having all of the artist’s income paid to the artist or their accountant who will then pay the manager.

  1. How can the artist keep artistic control or get out of the contract?

Put in clauses obliging the manager to do certain things on the artist’s behalf which would enable the artist to break the contract if the manager did not comply. Clauses such as full consultation clauses, abiding by the artist’s wishes and aspirations clauses and the like are important.

  1. Whose Lawyer should the manager use when negotiating on behalf of the artist?

Ensure that the manager is in liaison with the artist’s professional advisers, accountants and solicitors so that the artist retains control over the artist’s affairs.

  1. What about the manager’s expenses?

Consider the question of expenses. Managers should not have carte blanche to spend the artist’s money, there should be a financial limit on expenses and the manager should not be able to spend money unless it is reasonable, necessary and exclusively incurred on the artist’s behalf.

Record Contracts

  1. Who is the record company?

Make sure you know the company with whom you are contracting. Major companies are well known but many productions companies and smaller independent labels are not. Full investigations should be made of production companies, particularly to see how records are distributed and to ensure that there is a proper cash flow from the distributor through to the artist.

  1. What will be produced?

Ascertain the product commitment. It is better to have a commitment for an album than a single, as the company will spend more money on making and breaking an album than they would on a single, which of course increases your chances of success as an artist and means your publishing income is likely to be higher.

  1. When will it be released?

Consider the release commitment. It is no good having a product made and not released for sale; there should be a firm commitment in your home territory and in the major preferably in the major territories of the world.

  1. How much will the artist be paid in royalties?

Royalty is the term used for the amount of money that the artist will receive from the record company for each record, CD or cassette sold. The royalty is normally defined in terms of a percentage of the amount that the record is sold for. Royalties should be paid on 100% of all records sold, not 90% as some companies attempt to do and the artist should be careful to ensure that the royalties are on net retail as opposed to publisher dealer price. If they are based on published dealer price then they should be scaled up (increased).

Consider how record companies will take away the royalties already given, such as reductions for twelve inch singles, TV advertised albums, club sales and CDs and DCCs. These items should be gone into most carefully as on many occasions there is no validity for reducing artists’ royalties by record companies, all they are doing is increasing their profit base at the artist’s expense.

  1. What about advances paid by the record company?

Deal with the question of advances and recording costs carefully as all of these items are recoupable (taken out of earnings) from royalties. Advances should be sufficient to ensure that the band can work at their recording career and survive and should enable the band to purchase whatever equipment is needed in the first years of their career.

Recording agreements should be subject to budgets mutually agreed between the record company and the artists. Control should be imposed to ensure that the record companies do not allow the budgets to run away, which eats in to the artist’s royalties.

Publishing Contracts

  1. Who is the publisher?

Research who the publisher is, remembering that publishing income is far more difficult to collect than record income. It is vitally important that your publisher is a reputable company able to continue paying income over many years.

  1. How long is the contract for?

Do not enter into a publishing agreement for a period longer than five years. The terms of an agreement will need to be reconsidered every so often in view of the writer’s success. If possible only enter into an agreement for a period of three years although this will in effect, be one year plus two one year options.

  1. What sort of publishing advances can the songwriter or composer expect to be paid?

The advances should reflect an accurate estimate of the income due to the artist normally over the next 12 months. If an artist has secured an album deal it will be higher than if the artist had secured a singles deal. The publisher is effectively advancing the income that will be expected on royalty payments to the artist through the release of recorded material.

  1. How much money will a publisher take in royalty income?

The royalties should be a fair and accurate split; the norm today is 75% for the writer and 25% for the publisher. Royalties split 50-50 is not acceptable and are a hangover from a less regulated era.

Understand fully how royalties are calculated at source it means that when £1 is earned throughout the world the writer receives 75p.

However, if royalties are calculated on a receipts basis and the publisher has entered into a 75/25 split with its sub-publisher (even if it is a company the publisher owns completely) then the songwriter will receive is 75% of 75% – that is 56.25p in the pound.

  1. When will the writer get the full rights to her/his music back?

Consider the retentions. Songs last for the writer’s life plus 70 years and it is very important that writers get their songs back at some point so that they can enter into new agreements and maximise potential income. Songs are a writer’s pension. Many songs which seem to have no real value after their initial success come back years later and are of considerable value. A 10 to 15 year retention period is fair, some publishing companies require longer, but you should not agree to a life of a copyright deal.

  1. What control does the writer have over her/his work?

Deal with creative controls in a publishing deal as you have in a record contract. You want to ensure that the writer’s work is not altered, amended or modified without permission. Ensure sync licenses (the right to put the music on film, TV) are not granted without the writer’s permission. Impose controls on the publisher to ensure they register each song in each territory in order to protect them

  1. How can an artist ensure the right to the debut performance of his/her own song?

Contractual controls make sure that the publisher abides by any control composition clause and requirements for the granting of sync licenses imposed by the record company and that the publisher will grant to the writer’s own record company a first mechanical license without the writer’s permission. This will ensure the writer always has his or her own work available to him/her.

  1. Who keeps track of the money?

Deal with accounting provisions as per the record company – it is very important in publishing agreements that the source of all income is easily identifiable.

Other Types of Contract

Agency contracts

These are contracts that are entered into with agents, which deal with the live work of any band. It is advisable to ensure that the agreement includes a key man clause, so if a particular agent inside an agency leaves the artist is free to go with the agent. Agents are very personal and it is not easy for an agent to ‘inherit’ somebody else’s artists and have the same level of enthusiasm. Agency contracts for North America require a different expertise from the rest of the world and the UK agents should not be granted world-wide agency rights.  The usual going rate is 12% commission in the UK and 15% commission on any non-UK gigs/tours. These days Agents tend to send on all the EPK’s, and any other information that is required by the promoters and they also spend a lot of time ‘advertising’ live gigs/tours etc on social media. This in theory should all take a lot of pressure of the bands so that they can focus more on the music.

Sponsorship or endorsement contracts

Sponsorship contracts concern the association of a product with the artist and usually require the artist who attends certain parties to meet certain people, to have the products name appear at venues, on programmes, to appear in adverts and to generally sponsor the product.

Endorsement contracts do not usually provide for payment of moneys but provides artists with products used in performances such as keyboards, cymbals.

Merchandising contracts

These agreements concern the sale of merchandise and are split usually betweentour income and retail/wholesale income.

Tour income is usually tied into the number of tickets sold for the concerts. Thirty per cent of the sale price is a reasonable split, bearing in mind the merchandiser has to manufacture as well as sell.

Artists should ensure that they are reported to daily on tour by the merchandiser as failure to do so often leaves accounting procedures open to abuse.

On Wholesale and Retail deals, the percentages are much less, between ten and fifteen per cent. The artist should always make sure that he or she has creative control so that products and designs not approved by the artist cannot be sold.

Band agreements

Bands often require agreements between themselves to ensure that all income is split in accordance with their agreement and that matters such as ownership of the band’s name and who has overall control of the band’s activities are agreed.

The issue of copyright ownership in the songs are often an issue that needs consideration. Often members of the band other than the songwriter, will consider that they should be entitled to a share in royalties because of musical.

5 Copyright and Music Publishing

In this section we look at the concept of copyright in the UK as related to musical works, the royalty system and how it works, what a publisher does.

KNOW YOUR RIGHTS AS THE WRITER OF A MUSICAL WORK

The writer of a musical work is the creator (and the original owner) of a piece of copyright material.

It does not matter whether that musical work is a song with a lyric and melody or simply a rhythmic instrumental piece without words or tune. Provided that work is in some way a musical composition the writer of it is the owner of its copyright.

There are  the basic qualifying criteria:

  • Originality – the work must be new and unique

  • Set down in a permanent form – recorded on magnetic tape, saved on a computer disc, written, drawn or painted

What is copyright?

Copyright is:

  • the right to copy a work and the right to prevent the unauthorized copying of a work

  • a property right – it can be treated in the same way as any other type of property (bought, sold and hired)

  • an economic right – the creator and the owner have the right to earn money from its exploitation

Once a work has fulfilled these criteria it is automatically in copyright. There are certain precautions that can be taken to safeguard copyright status but there are no formal copyright registration requirements in the UK (there are in the US). To some this seems unsatisfactory, they may want a copyright registration office where they can lodge their cassette/sheet music in case their music is ever plagiarised or pirated. But international copyright conventions, to which the UK is signatory, preclude such formalities.

In the UK copyright is governed by the Copyright, Designs and Patents Act 1988.

However, there are certain precautions a writer can take:

    • S/he can send a copy of the tape or sheet music to him/herself by registered post and then leave the envelope unopened or s/he can lodge a copy with his or her bank manager or solicitor and take some sort of dated receipt.

S/he can register the title of the work with the copyright societies (MCPS  & PRS).

S/he can make sure that any copies of the works which leave his/her possession go by a letter ( of which s/he keeps a copy)

Even though none of these precautions will do much more than establish a date, they can be useful supporting evidence in the event of a court case.

In the event of legal action over a work, a court might have to establish who has prior evidence of ownership and whether (in cases of claimed plagiarism) the infringing party had access to other work.

The above precautions might help in such eventualities. It should be noted that piracy/plagiarism situations are uncommon and a sense of proportion and precaution is the most appropriate attitude when considering protecting your rights.

Many disputes over works occur in cases of multiple authorship and it is important to understand how co-writer situations work. Without agreement/understanding to the contrary an original work is initially shared: 50% lyrics writer-50% music writer and individual writers can exploit their share individually.

It is quite normal, however, for co-writers (especially in bands) to consider all song writing to be a co-operative effort and to agree to equal shares, regardless of writing situations and a simple letter to the effect that ‘it is hereby agreed that the writer shares the work ‘Love My Baby’ ( Smith/Jones) are 66.6% Smith and 33.3% Jones, Signed … is quite sufficient.

A person who rearranges an existing copyright work (e.g. a musical arranger or a remixer) cannot have any claim to a share of the copyright in that work. But  a person who rearranges non-copyright work (e.g. an old work that has gone out of copyright or a traditional work that never was in copyright) may claim a new copyright in their arrangement.

Copyright  allows the copyright owner to give permission (or to restrict permission) for commercial exploitation of the  musical work, that permission will normally be granted in consideration for royalties.

Know Your Royalties

Copyright legislation defines two basic areas where a copyright owner can restrict exploitation of his/her work: 

  • The making of copies
  • Public Performance

These are the two areas where a copyright owner can earn a living by allowing exploitation in exchange for royalties.

The Making of Copies

This creates  sheet music royalties and mechanical royalties. Sheet music (for most types of popular music) is now just a tiny part of the music business and sheet music royalties need not concern us here.

Mechanical royalties are a different matter – these mostly arise from the following types of mechanical reproduction:

Recording musical works onto disc/tape/CD

for sale as records

recording musical works into films or TV programmes for subsequent performance or broadcast

recording musical works into videos for sale to the public (or transferring existing TV/film programmes onto video for sale to the public)

      • any use of a musical work  where a recording is made for commercial exploitation may also generate a mechanical royalty, such as recording music into a video game, a storyteller cassette tape for children or recording music onto a karaoke system.

Where multiple copying is involved, it is normal for royalties to be calculated as a percentage of each copy. In other cases a flat fee for specific area of use is more appropriate.

Most mechanical royalties throughout the world are collected by mechanical societies. These will either administer industry agreed rates or will help negotiate specific rates on behalf of the copyright owner. MCPS (Mechanical Copyright Protection Society Ltd.) is the UK mechanical society.

Public Performance

Public performance royalties are paid from the following types of uses:
  • Radio & TV use of music
  • The playing of music (usually off records) in clubs and discos
  • The playing of music (usually off films) in cinemas
  • The playing of music (usually off radio) in shops, pubs and restaurants

Live music performed in music venues

All performance royalties (except certain opera/ballet uses falling under a specialist ‘grand rights’ category) are collected, processed and paid out by Performing Rights Societies. PRS (The Performing Rights Society) is the UK performing rights society.

Performing rights societies have always handled performance moneys. In certain areas (notably in the UK, USA Canada and Australia)  mechanical royalty income could be negotiated and collected by the copyright owner. Since 1989 in the UK these opportunities have diminished dramatically as the music copyright owners have chosen to pool the rights in the mechanical society in order to negotiate more strongly on an industry level.

How Royalties Are Calculated

SHEET MUSIC ROYALTIES

In the UK there are now only two or three music publishers specialising in the printing of sheet music. Typically, these will pay the music copyright owner 15% of the retail price (excluding VAT) of each printed copy of sheet music sold. In the case of albums or folios, the 15% will be split between all works in the album.

There is a ‘graphic’ right which is the right to print the lyric of the song in, say, a newspaper or a book or magazine. There are no typical fees and each use would be negotiated by the copyright owner. Sheet music royalties and royalties from graphic rights are not handled by any copyright society and would be negotiated/collected directly by the copyright owner.

MECHANICAL ROYALTIES

Record Royalties

The copyright tribunal in 1991 set the record royalty rate for musical works at 8.5% of the Dealer Price (excluding VAT) of every record.

This can, alternatively, be expressed as 6.5% of the Retail Price (excluding VAT)

The following example calculation is based on dealer price:

The published dealer prices of a chart album are as follows:

CD – £7.49

8.5% of this price gives the MCPS royalty per record.

CD – £0.64p

If there are 12 tracks on the CD the song-writer will get about 5 pence (4.9p) per track and if there are 10 tracks on the cassette then the song-writer will get about 4 pence (4.2). This is assuming that all tracks are of equal length since the royalty per track is normally divided between tracks according to their individual track timings (to the nearest second).

So, if 10,000 copies of the compilation CD and 10,000 copies of the cassette were sold and if you wrote one of the tracks you would get in the region of £490 from the  CD and £420 from the cassette.

Record royalties are accounted quarterly on sales by major record companies. Smaller record companies are invoiced on pressings immediately the pressings are made.

In the UK and in most territories of the world  (except Canada, USA and Australia) all record royalties are handled by the local mechanical copyright society.

Video Royalties

The industry agreed rate calculates video royalties from a maximum royalty of 8.5% of dealer price (the same as the record royalty), to the total video running time. So three minutes of music in a 90 minute film  is 0.28% of dealer price. There is a cap at 7% of dealer price for music videos. BPI member companies (video companies who are members of the record industry trade organisations) enjoy preferential rates of 7.5% ( with 6% cap for music videos).

Television/Film Royalties

These royalties cover the recording of music onto television film productions. The subsequent broadcast or performance generates another royalty also. Where a TV programme is made by the BBC or ITV companies, all royalties come out of an annual lump sum paid by the BBC/ITV to MCPS. 1994 allocations for recording music into TV programmes were BBC – £31.20 per minute featured (£23.40 background) and ITV – £20.16 per minute featured (£15.12 background).

Where the production is made by an independent TV production company (even if it is for eventual showing on BBC or ITV) a fee has to be negotiated. This may be in the region of £60 – £200 per 30 seconds and may be negotiated by MCPS or the copyright owner.

Feature film and TV commercial uses are very lucrative and substantial moneys (e.g. £2,500 per second for a feature film or £15,000 per seconds for a TV commercial) can be generated.

These can be negotiated by MCPS or the copyright owner.

Performance Royalties

These are all administered by the PRS (Performing Rights Society) in the UK  from annual lump sum fees charged to broadcaster and music venues.  These fees might range from £100 – £150 per year for a typical pub, to £400 for a small music club to £23 million for the BBC.

A club/disco pays  £50 per 1000 people a year.

Live music events (concerts and variety shows) would be licensed by PRS on the basis of  a percentage of gross box office.  Music shows often pay 4% of box office .

These royalties are paid directly to the PRS on all box office takings by the promoter.

Example of PRS airplay royalties for a 3 minute song. Please note these royalties are for the year 2011

Radio 1,2,3,4 and 5 – £39.46

Capital Radio London GLR – £6.05

GMR (Greater Manchester Radio) – £1.42

BBC TV Network – £226.71

ITV Network – £309.54

Do You Really Need A Publisher?

Historically, a music publisher was the person who published (i.e. made available to the public) copies of a songwriter’s works. Now this role has been largely taken over by record companies.

Even after the sheet music industry was superseded by the record industry as the maker of multiple copies of music, the publisher still played a major part in the music industry which recognised two separate talents: that of the artist and that of the songwriter.

Up to the 1960s it was unusual for an artist to be a songwriter or a songwriter to be an artist. Since the 1960s it has become more and more the normal for an artist or band to be a combined performing/song writing creative entity, so the continuing song writing/music publishing side to the music business is now largely based on historical practice.

Music publishers, nowadays, fulfil three basic roles:

  • Agent
  • Promoter/Fixer /Administrator
  • Banker

The first role is the most questionable, though music publishers will stoutly defend their creativity in getting covers for songs, in getting TV commercial uses.

Administration plays  a  major part, as their corporate effort is geared towards copyright documentation, royalty collection and royalty distribution.

Bankers,  they certainly are since most major publishing deals will be on the basis of a royalty advance paid by the publisher to the copyright owner in exchange for the right to administer/control the copyright owner’s work for a period of time and for a certain percentage.

To a great extent it is the willingness of the music industry to pay advances that has guaranteed their continued existence.

Nowadays, the main bulk of royalties is administered by the copyright societies (MCPS & PRS) in this country and by their affiliates abroad) according to music industry-agreed rates and conditions. The front-line administrators,  are the societies.

Music publishers are members of these  societies and receive their royalties from them. But songwriters can/should become members and there is nothing to stop a songwriter dealing directly with societies and not having a music publisher. This is becoming more common.

Established songwriters will tend to create their own music publishing catalogue identity and work through that. If they have the necessary administrative expertise (or can call on a consultancy expertise) and if they do not need advances (which are recoupable in any case) they can hold all their rights and receive their royalties without having to pay a middle-man a percentage.

What is a publishing deal?

A publishing deal is made between a copyright owner (usually a songwriter) and a music publisher.  The publisher  will be entitled to receive royalties on these works and  will not deduct a percentage before passing over the balance to the copyright owner.

In exchange, the copyright owner will benefit from an advance payment (possibly), the promotional power (possibly) of the publisher and the administrative expertise of the publishers.

Types of publishing deals

  • The administration deal
  • The sub publishing deal
  • The single song assignment
  • The exclusive publishing agreement

An Administration deal

Popular for songwriters who have a small but potentially lucrative catalogue, or for established composers or songwriters, or for small labels. It is a deal where one party manages the day-to-day running of another party’s publishing catalogues. It is usually exclusive (and thus precludes appointment of other publishers for the term of agreement).

Typical deal 10-15% to the publisher  with no advance for administering the songs and grants no rights of ownership.

The sub publishing deal

This is a mixture of administration deal and an exclusive publishing agreement.  The owner of the copyrights sub licences some or all of these rights to a publisher.  The original owner keeps copyright so it’s a licence not an assignment of rights.  It appeals to songwriters who want to keep control of the copyright or smaller publishers who don’t have an established system overseas.

Typical deal 15-20% to the publisher of gross income with an advance

The single song assignment

The rights of a song go to the publisher.  This could be for the life of copyright or it could be for a shorter RToghts or Retention period.

Typical deal 20-25% of the gross income to the publisher and a small advance.

Exclusive Publishing agreement

This is considered to be the holy grail for most pop songwriters.

Subject to the same restraints for trading as any exclusive agreements.  The length of the term is limited and the publisher has to do something with the work or it reverts to the original copyright owner.

Typical deal 20-30% to the publisher with an advance.

Terms of contract

Normally shorter than a record contract.

Maybe an initial period of one year and then options in the music publishers’ favour for a further two or three option period.  Or it may be a rolling term – this is fixing the period up front rather than options ie 3-5 years.  The fixed period can be extended until you’ve fulfilled the minimum commitment as agreed.

The single song ASSIGNMENT is a transfer of ownership.

It is usually between a composer and a publisher and transfers ownership of the copyright to the publisher. It is usually on a specific song-by song basis. An assignment will often be the consequence of an Exclusive Songwriter Agreement (ESA) where the composer gives ownership of all written work during a specific period of contract (plus, usually all works written up to the date the contract started). An ESA is a composer/publisher arrangement.

An assignment must be signed by the composer and contain an element of valuable consideration on exchange for the assignment.

A LICENSE (or sub-publishing) agreement

It is usually a publisher/publisher deal. It grants ownership to rights but limited by time (e.g. three years) and by territory (e.g  Europe) and sometimes by type (e.g. not including video or broadcast rights.