You’ve done it! You have reached the end of this course – well done for completing it! We hope you now feel you have a comprehensive understanding of the recorded music industry and its set-up. This lesson continues with a glossary, which you can reference to get a quick definition for many of the terms we have learned about in this course.
(Un)recoupable - Expenses that are deducted against the artist share, or not.
Ad-Supported Streaming - A transmission of audio that is made available to users without charge of any kind, directly or indirectly (i.e. not on a subscription basis or any other business model). The user will be seeing/hearing ads whilst using the service, to generate income for the platform
Administrator - A person or company responsible for carrying out the administration of a business or organisation. In publishing, an admin publishing deal between publishers grants one publisher the admin rights to the catalogue of the other publisher
Advance - A payment made ahead of any revenues being generated, to be deducted from future royalties due
Artist - An artist is a person who creates art. This term is often used to describe the recording artist of a song.
Artist Portal - A portal for artists and/or writers to log in to and retrieve their statements as well as potential other datasets
At Source - The amount due to a rightsholder before any commissions or fees have been subtracted
Audit - A royalty or licensing audit is when you examine your third-party licensee(s) to determine whether you are collecting all the royalty income you are contractually owed. A client can also audit their label or publisher to determine whether they have paid through the royalties due to the payee.
Back Catalogue - An artist's back catalogue is the music they recorded and released in the past, rather than their latest recordings. The same logic applies to writers and the works they have written.
Barcode - An image of vertical lines and spaces to affixed to retail items. When image is scanned it returns a unique 12 or 13 digit number to identify the product the barcode is affixed to. In this recording industry this is often used as a unique identifier for a physical product (a CD, vinyl etc).
Black Box - A pool of revenue where the copyright owners of the content generating the revenue cannot be traced. Societies might pay this money out as a pro-rated lumpsum instead
Blanket License - A license which allows the music user to use any or all of the millions of works in a society's catalogue. The license covers the usage for all works under one flat fee. Blanket licenses are often given to TV and Radio stations for certain forms of use
Breakage - The damage or breaking of physical products during transport - usually a clause is included in contracts to cover income loss for the label for any broken items
C Line - Refers to the copyright owner of the sound recording contained
Catalogue Number - A unique identification number assigned to a music release by a record label
Closing Balance - The final balance on a payee's account after calculating all their royalties, costs and other payments
Compulsory License - A compulsory license enables one to use another’s intellectual property without having to obtain the owner’s permission, though availability of the license may be conditioned on the user’s compliance with statutory formalities such as provision of notice and payment of a set fee.
Consignment - A consignment agreement allows an entity to sell goods without having to pay for them upfront through a distribution agreement.
Controlled Composition Clause - A contract term that can be negotiated between a label and artist if the artist is also the composer and their publishing is controlled by the label's publishing arm. Controlled composition clauses have an impact on the calculation of the mechanical royalties the label needs to pay to the artist.
Copyright - The legal right granted to an author, composer, playwright, publisher, or distributor to exclusive publication, production, sale, or distribution of a literary, musical, dramatic, or artistic work. There are two types of copyright in music: master and composition.
Copyright Date - Refers to the date on which the item was copyrighted.
Cover - A new performance or recording by a musician other than the original performer or composer of the song.
Cross-Collateralisation - When an advance has been paid for one product, but the advance can also be recouped with earnings from another product.
DDEX - Digital Data Exchange is an international standards-setting organisation that has set up various standardised formats for data delivery and management in the music industry
Distribute - The term for releasing music onto the DSPs (such as Spotify, Apple Music etc.) and, traditionally, into physical stores. Distributing music is not the same as publishing music and these terms should not be used interchangeably.
Distributor - A company that releases music to the DSPs and, traditionally, physical stores.
DSPs (Digital Service Providers) - These are all music stores such as Spotify, Beatport etc.
EAN - European Article Number. This is a product-related code to identify releases. It enables to identify every release and can be used as barcode. It consist of 13 numbers.
Ephemeral Use - The legal temporary use of copyrighted material without permission of the copyright user and without payment of a synchronization fee. This is legal only as long as certain specific criteria are met.
Escalation - Refers to a clause in a contract that details that when a certain threshold is reached, the rates applied to the income will change. For example, mechanical rates are 80% when fewer than 5000 units have been sold, but escalate to 85% when more than 5000 units have been sold
Exclusive licence - Under an exclusive license, no person or company other than the named licensee can exploit the relevant intellectual property rights. Exclusive licenses can be for a specific time set, after which the exclusivity stops.
Fingerprinting - Term used to describe the usage of music recognition technology to recognise which songs were played on TV and radio, and in some instances in clubs and at events
Freemium - A type of business model that offers basic features of a product or service to users at no cost and charges a premium for supplemental or advanced features.
Full Stat Rate - The statutory rate as set by the relevant authorities, without any deductions or clauses applied to it
Gross Receipts - This is the amount that is originally collected, before any 3rd parties such as distributors have taken a commission
Independent Label - This phrase could be allocated multiple definitions, but is generally used to describe labels that operate independently from one of the three major labels (Universal, Sony and Warner).
Interactive Streaming - A stream generated on a platform where the user can pick the songs they listen to on demand. Spotify is an Interactive Streaming platform, Pandora is a non-interactive platform.
ISRC - The ISRC (International Standard Recording Code) is a unique, permanent and internationally recognized reference number for the identification of a recording
Life Of Copyright - A legal term to describe the period a work is copyrighted and therefore exploitable. In most countries, life of copyright means 70 years after the last author's death, but there are exceptions
Majors - A term commonly used to refer to the three big recording and publishing companies in the music industry (Universal, Sony and Warner).
Master - The official, original recording of a song. This refers to the first recording for that specific version of a song - a cover version of a song has its own individual master recording, as does the original song. Master recordings have so called master rights attached to them - the right holders for a master recording have the right to collect certain royalties
Merlin - Merlin is a digital rights music licensing partner for independent record labels, distributors, and other music rights holders around the world. https://merlinnetwork.org/
Metadata - Metadata usually refers to the song credits including all the information tied to a released song such as titles, songwriter and producer names, the publisher(s), the record label etc. Music services such as Spotify provide access to some meta data for its consumers by showing the song credits
MFN (Most Favored Nation) - This clause is used in synch negotiations and entitles a rightsholder to the same (pro-rated) share as the other rightsholders on the song (across masters and publishing) in case another rightsholder negotiates a higher fee.
Minimum Stat Rate - If a minimum stat rate is referenced in the controlled composition clause, only the minimum stat rate will be paid for a track, regardless of the track's length.
MRT (Music Recognition Technology) - A recognition device installed in venues that recognises the music played by a DJ and sends this information on to the collection society
Neighbouring Rights - Neighbouring Rights are royalties due to right holders of a sound recording when that recording is performed in public. The right holders are the musicians on the sound recording and the master owners
Net Receipts - The money received by the publisher/label after any third parties have taken their cut
NFT - An NFT, or non-fungible token, essentially allows its buyer to say they own the original copy of a digital file in the same way you might own the original copy of a piece of physical art
Non-Exclusive Rights - A copyright non exclusive license occurs when the owner retains ownership of the copyright and/or may license the same right to others, meaning that it is not limited to only one person or organization, or to one group of people or organizations
On-Demand Streaming - Listening to or watching of a product whenever you want to, not as part of a live broadcast
Opening Balance - The balance on a payee's account at the start of a period, before any royalty calculations, costs and payments have been applied
P Line - Refers to the copyright owner of the artwork used in conjunction with the sound recording (ie the album art displayed on DSPs)
Penny Rates - A term used to refer to statutory rates
Performer - Performers record the music in a sound recording and own the master rights
PPD - Stands for Published Price to the Dealer. This is a term commonly used in a physical distribution context. The PPD refers to the undiscounted wholesale price that physical distributors charge the retailers.
Premium Streaming - A stream generated by a premium user of the streaming platform - someone who pays for their subscription
Price Category - The price category a record is sold at, which has an influence on the calculation of royalties
Pro-Rated model - A pay-out model for DSPs where the royalties are calculated by taking all earnings across the platform for a certain period and allocating the royalties by pro-rating the amount across all streams in that period.
Producer - The person that has produced a song or album (and is often due royalties for them).
Production Music - Music that is produced specifically to be licensed for use in film, ads, tv or games. Contractual payment terms are often based around lumpsum or buy-out payments instead of 'regular' royalty terms
Profit share deal - A type of contract between a label and an artist. The label will calculate the sum of all the sales and costs to find the project’s profit. An agreed percentage of this profit is then shared with the artist. Also sometimes referred to as a Joint Venture (JV)
Public Domain - Public domain music are songs and tracks that are not protected by copyright, and can be used without permission or payment. Copyright laws can protect musical composition for 50-70 years after an author's death.
Publisher - A publisher most often refers to a music publishing company. Music publishing companies own composition copyrights. If an artist does not have a publishing deal, then the songwriter(s) is/are self-published.
Record Label - A company that manufactures, distributes, and promotes the recordings of affiliated musicians
Reporting Frequency - The frequency a publisher or labels reports income to their payees and sends them statements. For publishers this is often quarterly or half-yearly, for labels it's often half-yearly
Reserves - Income withheld against sales for which returns are expected.
Retail Price - Mostly used in the context of physical distribution, this refers to the price that retailers charge the end-consumer
Returns - Physical products that were delivered to (online) stores but not sold and are returned to the label.
Royalty style deal - A type of contract between a label and an artist. The artist will receive a percentage of the revenues generated, and the contract will specify which (percentage of) costs can be recouped from the artist's balance.
Sale Date - The date (or period) a recording was used (sold, streamed, downloaded etc)
Sample - The usage of an existing recording in a new song. Samples need to be pre-approved before the new song is released, and the writers of the original song are usually given shares on the new work
Self-Billing Invoice - A feature that allows publishers or labels to include an invoice on behalf of their artist/writer when generating statements for them
Song - A musical composition, often consisting of an instrumental and lyrical part
Sound Recording - The recording of a piece of music
Stat Rate - Statutory Rate: the rate set by the Copyright Arbitration Royalty Panel for physical or digital download mechanical royalties
Subscription Streaming - Streams created by a user that has a paid subscription to the streaming service
Sync - A service where songs are licensed for use with moving images – film, TV series, adverts, games, trailers etc. in exchange for payment.
Telco Stream - A stream generated by a user that is signed up to a streaming platform in conjunction with their phone plans - some phone providers offer a free or discounted membership to a streaming platform as part of their mobile plan
Track Cap - When a track cap is agreed, the label only needs to pay the statutory rate for mechanicals for the agreed amount of tracks, instead of the actual amount of tracks that are on the record. This reduces the pay-out to their artist
Transaction Date - The date a payment was made, often used to capture the date a publisher or label received a payment from a society or licensee
Unit Price - The price per unit that has been paid in a sales file. Often calculated by dividing the total paid royalties for a specific release and format and dividing it by the amount of units.
UPC - A UPC barcode (or Universal Product Code) is used to represent and track your music as an entire physical or digital product, in contrast to an ISRC code which represents individual tracks or sound recordings. Sometimes called Wholesale Price
User-Centric model - A pay-out model for DSPs where the royalties are calculated based on the streams per user, allocating a share of the user's fee only to the songs they have listened to.
Wholesale Price - This is a term commonly used in a physical distribution context. The undiscounted wholesale price that physical distributors charge the retailers, sometimes also referred to as PPD
WHT - Abbreviation for Withholding Tax. See Withholding Tax
Withholding Tax - A set amount of income tax that an employer withholds from an employee's paycheck and pays directly to the government in the employee's name
Work For Hire - An agreement in which a songwriter/artist gives up their ownership and administration rights for a specific work, in exchange for a flat fee. In some countries, this agreement makes the employer the owner of the work and takes away the publishing rights from the writer