Navigating Music
Industry + Contracts
NIC BURGER
TWITTER : @BURGERNIC || GOOGLE.COM/+BURGERNIC
“I’m Going Through Changes”
Ozzy Osbourne

Physical product is no longer the biggest format.

Record Labels no longer sell the product direct.

Live makes up to 57% of an artists income these days.

The price of music is “free”

Streaming is surpassing digital.

Vinyl is making a small comeback.

Music is becoming social again.
Physical // Digital Income
“Write it, cut it, paste it, save it” – Daft Punk


The physical world survived on Published Price To Dealer – PPD

Record industry controlled the PPD in CD/Vinyl world.

Margins could be changed dependant on product development costs.

Royalties paid on % of PPD.
Digital World – Record Labels don’t control End User Price.

Digital whole sale prices substantially lower than Physical.

Less room for margins

Labels get “Minimum Guarantee's” not always linked to income to artist.

Digital is paid out at normal rates instead of 3 rd Party or Specific Digital
Clauses.

Singles rule over albums. (lower margins)
What is a record label?
“right round like a record, baby” – Dead Or Alive

Marketing Staff

Radio/Print/Media Team (PR)

Video Department (PR)

Digital Partner Relationships

Sync Partnerships with agencies

Distribution Channels ie Music Retailers.


Digital Direct or via Aggregation Firm
Financially Stable to manage all above services/staff.
Types of Agreements
“What’s your flavour” – Craig David

Artist Deals

Sync Deals

Co Writer Deals

Producer Agreements

Band Agreements

Investment Agreements

Music Video Production Agreements

Sync Management (Rep) Deals

Merchandising Agreements

Performance Agreements
What’s In My Contract?

Contracting Party

Term

Royalty Rates

Neighbouring Income

Needle Times

Territory

Recoupment

Ownership

Termination

Accounting Periods
Contracting party
 Are
you a Group?
 Are
you a legal entity?
 Do
you have the capacity to sign?
Term
 What
type of agreement are you signing?
 Licensing for
a term (years)
 Licensing for
Albums/Release Quantity?
 Ensure
you understand this clause as well as crosscollateralisation.
Royalty Rates
 PPD
– Published Dealer Price - Generally used on
physical product.
 Check
 Nett
for deductions. (ie Packaging Deductions).
Receipts – The income receipted by record label.
 Check
 Other
for deductions.
Income?
 Neighbouring Income (Radio,
Performance)
 Sync
Needletime, Public
Licensing, TV Appearances.
Recoupment &
Cross-Collateralisation
 Video’s
 Third
PR).
Party Services (ie some labels outsource
 Ensure
you understand cross collateralisation.
Albums/projects vs track etc.
Ownership
 Ensure
 Who
you understand ownership of masters?
is paying for recording
 Outright
purchase or license of masters?
 If
you own it are you geared up to collect all the
income?
 Cross
Country tax laws?
 Copyright Laws of
your country.
Accounting Periods
 Account
Periods traditionally were January
and December 90 Days.
 With
change to Digital some labels now pay
Quarterly and smaller labels even monthly.
 Ensure
you understand when labels get paid.
Not understanding the flow of money can
severely damage your relationship with labels.
Termination
 Understand
are.
what Termination clauses there
 Be
aware that something like a 3 album deal
doesn’t mean licensor will release 3 albums
and can terminate after first one as example.
 There
will always be more tempting deals, so
make sure you make the right decision. It’s
YOUR future and you are marrying a
label/distributor.