Music Money and Success
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Table of Contents
Introduction xxiiiSources of Income xxvi
1. Music, Money, Songwriting, and Music Publishing
Music Publishers and What They Do 2
Singles And Albums 3 / Demo Recordings 4 / Proper Administration 4 / Television and Movie Music 5 / Commercials 5 / Video Games and Ringtones 5 / Foreign Promotion and Collection of Royalties 5 /
The Publisher, Writer/Performer, Record Contracts, and Development Deals 6
Infringement Actions 6 / Home Video 6 /
The Inner Workings of a Music Publisher 7
Chief Executive 7 / Creative Department 7 / Promotion Department 7 / Business and Legal Affairs Department 7 / Synchronization Licensing Department 8 / Mechanical Licensing Department 8 / Finance Department 8 / Copyright Department 8 / Foreign Department 9 / Royalty Department 9 / I.T./Computer Department 9 /
The Acquisition of Rights by a Publisher 9
Individual Song and Exclusive Agreements 10 / Administration Agreement 10 / Foreign Subpublishing Agreement 11
The Songwriter- Music Publisher Relationship 11
Publishing Contracts 11
The Individual Song Contract 12 / The Exclusive Songwriter’s Contract 13 /
Important Provisions of Songwriter-Publisher Contracts 13
Sale of the Musical Composition 14 / Return of Songs to the Writer 14 / The Term 14 / Rights Granted to the Publisher 15 / Exclusivity 15 / Compensation 15 / Sharing of Advances 16 / Minimum Song Delivery Requirement 17 / Advances 17 / Mini-Max Advances 18 / Subfloor Advances 19 / Pipeline Income 19 / Timing of Advances 20 / Writing with Other Songwriters 20 / Motion Picture and Television Theme Exclusions 20 / First-Use Mechanical Licenses 21 / Restrictions on Promotion in Certain Areas 22 / Altering Compositions 23 / Ownership and Promotion of Demo Recordings 24 / Foreign Subpublisher Fees 24 / Audits 25 / Infringement Claims 25 / Writer/Performer Development Deals 27 /
Sources of Income for the Music Publisher and Songwriter 30
Performance Right Payments 31 / CD, Record, and Tape Sales (Mechanical Royalties) 31 / Mechanical Licenses 32 / Television Series 34 / Motion Pictures 35 / Home Video/DVDs/Downloads 36 / Commercials 36 / Broadway Musicals 37 / Video Games 38 / Karaoke/Sing-Alongs 38 / Video Jukeboxes 39 / Lyric Reprints in Novels or Nonfiction Books 39 / Lyric Reprints in Magazines 40 / Monthly Song Lyric and Sheet Music Magazines 40 / Public Service Announcements 41 / Recordings of Hit Songs with Changed Lyrics 41 / Medleys 42 / Promotional Videos 43 / Greeting Cards 43 / Computer and Board Trivia Games 44 / Television Commercials for Motion Pictures 44 / Home Video (Television Programs) 45 / Home Video (Recording Artists) 45 / Foreign Theatrical Royalties (Motion Pictures) 46 / Dolls and Toys 46 / Television Programs and Motion Pictures Based on Songs 46 / Books Based on Motion Pictures (Lyric Reprints) 47 / Books about a Lyricist 48 / Remixes 48 / Novelty and Theme Song Albums 48 / Lyrics on Albums, Cassettes, Downloads, and CD Packages 49 / Sheet Music and Folios 49 / Television and Motion Picture Background Scores 50 / Lyrics and Music on Soda Cans 50 / Lyrics on T-Shirts and Posters 50 / Audio Recordings of Books 50 / Special Products Albums 51 / Television Sale Only Albums 51 / Record Clubs 52 / Key Outlet Marketing Albums 52 / Bonus and Hidden Tracks on an Album 52 / Limited Edition Collectibles 52 / Musical Telephones 53 / Singing Fish 53 / Theme Parks 54 / Ringtones 54 / Compilation Albums/Mechanical Rates Based on Past Success 54 /
Musical Door Chimes 55 / Musical Candles 55 / Musical Flowers 55 / Corporate In-House Videos 55 / Music Boxes 56 / Slot Machines 56 / Downloads 56 / The Internet 56 / Changing Mechanical Rates / 56
2. Music, Money, Co-Publishing, and Adminstration 57
Standard Terms of a Co-Publishing Agreement 59
Sharing of Income 59 / Compositions Covered by the Agreement 60 / Acquiring Songs Written by Other Writers 60 / Transfer of Copyright and Other Rights 61 / Term of Agreement 61 / Album-Based Agreements 62 / Two-Album Firm Agreements 62 / Exercise of Options in Album-Based Agreements 63 / Non-Exercise of an Album Option 64 / Ownership of Songs after the Contract Has Ended 65 / Advances 65 / Release of Recordings 66 / Advances Based on Album Content 66 / Advances Based on Licensing Rates 66 / Commercial Release Definition 67 / Non-Album Based Advances 67 / Advances Based on Sales 68 / “A” Side Single Chart Activity Advances 68 / Reduced Advances If Unrecouped 68 / Unrecoupable Payments 69 / Costs of Demonstration Recordings 69 / Additional Costs 70 / Payment of Royalties to Songwriters 70 / Sharing of Income between the Two Publishers 70 / Administration Charges 71 / The Writer’s Performance Right Income 71 / The Publisher’s Performance Right Income 72 / Reversions and Direct Collection of Income 72 / Reversion 72 / Royalty Distributions to the Writer’s Company 76 / Right to Match an Offer of Sale 76 / Participation Agreement 77 / Signed Deal Memos 77 / Recap 78 /
Administration Agreements 78
Fees Charged for Administrative Services 79 / Duration 79 / Territory 79 / Royalty Statements 80 / Royalty Payment Dates 80 / Cover Records and New Uses 80 / Cover Records 80 / New Uses 81 / Monies Earned during the Term 81 / Advances 82 / Pros and Cons of Administration Agreements 82 / Choosing the Right Administrator 83 / Co-Administration and Joint Administration / 84
3. Music, Money, Co-Ventures, and Joint Ventures 85
Types of Joint Venture/Co-Venture Agreements 86
Term 86 / Co-Publishing 86 / Administration 86 / Advances 87 / Advances to the Co-Venture Partner 87 / Scope of the Agreement 88 / Songwriting Services of the Co-Venturer 88 / Sharing of Income 88 / Deals that Extend Past the Term of the Co-Venture Agreement 88 / Guaranteed Funding 89 / Carry Forward Advances 90 / Exercise of Options for Songwriter Agreements 90 Puts and Calls 91 / Publishing Plus Ventures 91
4. Music, Money, and Copyright 93
Exclusive Rights of Copyright 94
Works Made for Hire 95
Compulsory Licenses 95
The Audio Home Recording Act of 1992 96
Copyright Royalty Judges (The Copyright Royalty Board) 97
Copyright Notice 97
Fees and Forms 98
Duration of Copyright 98
Rules Governing Duration of Copyright 98
Revision of Copyright Renewal Procedures 99
Renewal Claimants 101
Termination Rights 101
Termination of the Extended Copyright Renewal Term 101 / When the Termination Notice Must Be Sent 101 / What the Termination Notice Must Contain 102 / Service of the Notice 102 / Persons Entitled to Terminate the Extended Renewal Term 102 / Termination Rights Under the 1998 Term Extension Act 103 / Termination of Agreements Made During or After 1978 103 / When the Termination Notice Must Be Sent 103
Sound Recordings 103
Infringement of Copyright 104
International Copyright Protection 105
Completing the PA Copyright Form 105
The Digital Performance Right in Sound Recordings Act of 1995
(DPRSRA) and the Digital Millennium Copyright Act of 1998
(DMCA) 107
Conclusion 108
5. Music, Money, and the Recording Artist 109
The Phone Call from the Record Company 109
Inside the Business 111
The Most Important Points in Every Recording Contract 111
The Term 112
Artist Royalty Clauses 114
Recording Artist Royalties 114 / Retail Price Base 114 / Wholesale Price Base 114 / Changes in the Computation from the Retail Price to a Wholesale Price or from a Wholesale Price to a Retail Price 115 / Factors That Determine an Artist’s Royalty 115 / Graduated-Increase Royalty Provisions 116 / Sales Level Increases 116 / Contract Option Year Increases 116 / Royalties for Sales Outside the United States 117 / Album Price Lines and Royalty Rates 117 / Packaging Deductions 119 / Free Goods/Discounted Goods 120 / The 90%/92.5% Sale Provision 121 / New-Technology Royalty Rate Reductions 121 / Wholesale Price Calculations Without Deductions 122 / Cut-Outs and Surplus Copies 122 / Royalty Payments and Accounting Statements 122
Advances 123
Equipment Fund Advances 125
Album Release Obligations 126
Record Company Expenses 127
Videos 127 / Tour Support 130 / Trade Name Searches for Groups 130 / Promotion Expenses 131 / Recording Costs/Recording Funds 131
The Artist’s Obligations 133
The Minimum Recording Obligation 133 / Satisfaction of an Artist’s Delivery Commitment 134 / “Greatest Hits” Albums 134 / Recording Sessions and Studios 135 / Album Artwork 135 / Warranties and Indemnities 136 /
Sideman Provisions 137 / Re-Recording Restrictions 138 / Solo Albums (For Members of a Group) 138 / Provisions for New Band Members and Departing Band Members 139 / Recording and Delivery of Albums 140 / Delivery of the Final Master Recording 141 / Ownership of the Recordings 142
Motion Picture, Television, Video Game and
Commercial Uses 143
Shipping and Return Policies 144
Returned Recordings and the Artist’s Royalties 144
Insurance Policies 146
Confidentiality Clauses 146
Artist-Production Company Agreements 146
Flow-Through Clauses 147 / Publicity 147 / Responsibility for Payment of Producer Royalties 147 / Producer Credit 148 / Producer Advances 148 / Producer Royalties 148 / Producer-Controlled Compositions 149
Controlled-Composition Clauses 149
Mechanical Rates 149 / Sales Plateau Increases 150 / Increased Royalties for Later Albums 150 / Canadian Sales 153 / “Lock In” Rate Date 152 / “Greatest Hits” Albums 153 / Maximum Royalty Cap 153 / Downloads, Singles and EPs 155 / One-Use-Only Mechanical Royalties 156 / Free And Discounted Units 156 / Midpriced, Budget, and Record Club Reduced Royalties 156 / Increased Royalty Rates for Compositions That Are Published By the Record Company 156 / Changing Mechanical Rates 157
Copyrighted Arrangements of Compositions in the Public Domain 158
New Artist /Developing Artist Pricing 158
New Contract Developments 159
Net Profits Deals/Indie Labels 160
Upstreaming 161 / “360” Deals 161
Internet 162
6. Music, Money, and Sampling 163
Overview 163
Format of the Sample Agreement 167
Copyright Registration 167 / Administration of the New Composition 167 / Collection of Monies/Payment of Songwriter Royalties 168 /
Additional Sampling 168
Conclusion 169
7. Music, Money, and Television 171
The Television Industry 171
The Making of a Television Program 172 / The Market 173
Types of Television Music and How Music Is Used 174
The Television Music Budget 175
Television Underscore 176
The Television Underscore Contract 176
Composer Services 177 / Starting and Completion Dates 177 / Composing Fees 178 / Screen Credit 179 / Exclusivity of Composer’s Services 180 / Ownership of the Copyright 180 / Music Publishing 180 / Membership in a Performing Right Society 180 / Suspensions and Terminations 182 / Disposition of the Score 183 / Transportation and Expenses 183 / Share of Advance Payments 183 / Warranties and Indemnifications 184 / Assignments 184 / Royalty Payments 184 / Theatrical Version Release 184
Television Synchronization Rights (Getting Songs into Series, Specials, and Made-for-TV Movies) 185
The Importance of Hit Songs 185 / The Phone Call from the TV Producer 186 / Negotiating the Television License for a Song 187 / Actual Fees Charged for Songs Used in Television Programming 188 / Free Television 188 / Pay or Subscription Television 189 / Basic Cable Television 190 / All Television Media 190 / All Television and Home Video 190 / All Media Licenses Excluding Theatrical 190 / Internet Steaming 191 / Limited Downloads 191 / Ringtones 191 / Educational and Public Broadcasting Television 191 / Short-Term Free TV Licenses 191 / Multiple Use of a Song in a Show 192 / Additional Payment Formulas for Television 192 / Foreign Theatrical Distribution 193 / Television Performance Royalties 193 / Promotional Spots for Television Programs 193 / Airlines and Common Carriers 194 / Songs Used as Episode Title Television Series 194 / Hit Songs Used as Television Show Themes 194 / Hit Songs Used as Television Show Themes 194 / Music Clearance 195 / Sharing of Payments 197 / The Performance Right 197 / Television License Renewals 198 / Blanket Synch Agreements for Old Programs 198 / Why Synchronization Fees Are Low 199 / Music Cue Sheets and Their Importance 199 / Television Programs Produced in Foreign Countries 200 / Motion Pictures Shown on Television 201 / Guaranteed Syndication 201 / The Importance of Written Confirmation 201 / Getting Songs into Television Programs 202 / Producers and the Selecting of Songs 203 / Blanket Sync Agreements for Current Series 204 / Precleared Compositions 204 / The Experience Factor 204
Life after a Song Gets into a Television Program (Where the Real Money Is Made) 205
Option Fees 205 / DVD, Downloads, Personal Use Video, and Discs 207 / Hit Singles from Television Programs 209 / The Television Series Soundtrack Album 210 / Television Commercials Promoting the Program 211 / Sheet Music Folios 211 / Royalties from Motion Picture Theaters (When a Television Program Is Released as a Motion Picture) 211 / Broadcasts of the Series, Special, Made-for-TV Movie, or Miniseries 211 / Television Songs in Commercials 212 / Television Songs Used in Other Television Programs 212 / Television Songs Used in Motion Pictures 213 / Production Music/Library Music 213 / Sample Agreement 213
Conclusion 214
8. Music, Money, and Motion Pictures 215
Overview 215
The Movie Industry 215 / The Making of a Film 216 / The Market 217
Types of Motion Picture Music 218
The Film Music Budget 218
Use of Preexisting Hit Songs in Films 219
The Phone Call from the Film Company 219 / Determining How Much to Charge for a Song 222 / Actual Fees Paid for Existing Songs 222 / Opening and Closing Credits 223 / Multiple Uses of a Song 223 / Lyric Changes 223 / Duration of License 224 / Rights Granted to the Film Producer 224 / Home Video 225 / Territory 225 / Limited Theatrical Distribution 225 / Soundtrack Album Guarantees 225 / Motion Picture Producer Cut-Ins 226 / First-Use Restrictions 227 / Trailers and Advertisements 228 / Indie Films/Step Deals/Deferred Payments 228 / Restrictions on the Use of Songs in Other Films 228 / Exclusive Holds 229 / Reduction of Fees Due to the Use of Many Hit Records 229 / A Publisher Having More Than One Song in a Film 230 / Student-Produced Films/Step Deals 231 / Rescoring and Replacing Songs in a Film Prior to Release 231 / Promotional Television Programs 231 / Nonprofit Films and Free Use of Music 233 / Screen Credit 233 / Music Cue Sheets and Their Importance 233 / Getting Hit Songs into
Films 234 / Websites 234 / Producers and the Selecting of Songs 235 /
Recap 235
The Song Written for a Motion Picture 235
Breaking into the Business 237 / The Song for Film—From Start to Finish 237 / The “Song Written for a Film” Contract 237 / The Writer-Recording Artist Agreement for Creating and Recording a Composition for a Movie 242
Life After the Motion Picture Release (Where the Real Money Is Made) 245
Motion Picture Home Video Licensing 246 / DVD Only Licensing 246 / Hit Singles from Motion Pictures 247 / The Motion Picture Soundtrack Album 247 / Television Commercials Promoting the Film 249 / Sheet Music Folios 249 / Motion Picture Songs in Commercials 249 / Royalties from Motion Picture Theaters 250 / Television Broadcasts of the Motion Picture 250 / Film Songs Used in TV Programs 250 / Film Songs Used in Other Motion Pictures 251 /
Miscellaneous Sources of Income 251
Motion Picture Underscore 251
History of the Field 252 / The Feature Film Score Contract 252
Sources of Income: The Underscore Composer 261
Composing, Arranging, and Conducting Fee 261 / Foreign Theatrical and Other Performance Royalties 262 / U.S. Cable, Network, and Local Television Performances 264 / Soundtrack Albums 265
Conclusion 266
9. Music, Money, and Commercials 267
The Advertising Industry and How It Works 268
The Phone Call from the Advertising Agency 268 / The Advertising Agency and Its Use of Music 269 / The Importance of the Advertising Agency 270 / The Jingle 270 / Creation of a Jingle and the Monies that Can Be Earned 270 / The Independent Writer 271 / The Jingle Production Company 271 / The Writer as Employee of an Advertising Agency 271 / Hit Songs Used in Commercials 271 / Permission to Use a Hit Song in a Commercial 272 / Advantages and Disadvantages of a Hit Song Being Used in a Commercial (From a Publisher’s and Writer’s Point of View) 273
Jingles (Songs Written for Commercials) 274
The Jingle Writer and the Advertising Agency 274 / The Agency and the Production Company 275 /
Negotiating with an Advertising Agency for a Hit Song 275
Parties to the Agreement 276 / Copyright Ownership 276 / Duration of License 276 / Exclusivity Versus Nonexclusivity 277 / Number of Commercials 277 / Payment of Fees 277 / Exercise of Options 278 / Territory 278 / Media 279 / Foreign Countries 279 / Restrictions on Songwriter/Recording Artists 280 / Restrictions on First Broadcast Use by Another Product 280 / Lyric Changes or Instrumental Uses 280 / Confidentiality Agreements 281 / Performance Rights 281 / Alternative Compensation Packages 282
Radio and TV Royalties for Advertising Music 282
Conclusion 282
10. Music, Money, and Performances 283
The Performing Right 284
The Organizations and How to Join 285
ASCAP 285 / BMI 286
Types of License Agreements 287
Writer and Publisher Contracts and Termination Dates 288
Considerations in Making a Decision 289
ASCAP and BMI Income and Distributions 289
Components of ASCAP and BMI Income 290
Domestic 291
Foreign 291 / Special Distributions 291 / Interim Fees 292
Payment Dates and Methods of Payment 293
ASCAP 293 / BMI 294
ASCAP and BMI Payment Philosophy and Rules 295
ASCAP 295 / BMI 297
Payment Changes 297
Co-Written Compositions 298
Removal of Works 299
Services Provided 299
ASCAP Payments and Payment Rules 299
Types of Performances and Their Values 300 / Weights 301 / Payment Formulas/Weights into Dollars 303 / Radio 304 / Network Payment Formulas 306 / Local Television 307 / Highly Rated Shows Premium Payments 308 / Cable 308 / Music and Lyrics in Commercials 309 / Payments 310 / Live Performances 311 / Per Program Distributions 311 / The Internet 311
The BMI Payment Schedule 312
Voluntary Quarterly Payments 312 / Radio 313 / The 1977 Song Bonus 314 / The 1987 and 1998 Payment Schedules 315 / The 2004 Radio Payment Schedule 318 / Additional Criteria For Payment 318 / Survey of Performances 319 / Radio Payment Examples 319 / Television 320 / Types of Performance 320 / Network Television 320 / Payment Schedule Rates 321 / June 2008 Television Payments 322 / Local Television 322 / Cable 323 / Music and Lyrics in Commercials 324 / Live Performance Payments/Internet 325
SESAC 325
Payments 325 / Contracts 326
Chart Songs—What They Earn 326
Future Changes 328
11. Music, Money, and Broadway 329
An Overview of the Broadway Musical 329
Broadway and Road Performances 330 / Broadway Musicals 330 / The Broadway Composer and Lyricist 331 / Sources of Income for the Broadway Composer and Lyricist 331
Rights and Royalties of the Broadway Show Writer: The Dramatists Guild Contract 332
Monies Paid to the Composer and Lyricist Prior to the Actual Production of the Broadway Musical (Option Payments) 332 / Advance Payments 333 / Pre-Broadway Performances 333 / The Broadway Opening 334 / Broadway Writer Royalties 334 / Royalty Pools 335 / The Motion Picture as a Broadway Musical 336
Weekly Costs of a Broadway Musical 336
The Weekly Break-Even Point 337 / Road Performances during or after the Broadway Run 337 / Weekly Costs of a Show on the Road 338
Adjustments in a Writer’s Royalties (Dramatists Guild Contracts) 340
The New York Run (Minimum Weekly Guarantee) 340 / Touring Shows (Minimum Weekly Guarantee) 340
Broadway Shows Produced under Non-Dramatists Guild Contracts 341
Fixed-Dollar Royalty Shows 341 / Percentage-of-Receipts Royalty 341 / Touring Shows with Guarantees 342
What the Producer Must Do to Ensure Rights to a Share of Subsidiary Income from the Broadway Show (Dramatists Guild Contracts) 343
Producer’s Share of Subsidiary Rights 344 / Producer’s Right to Subsidiary Income under non-Dramatists Guild Contracts 344
Life after Broadway (Where the Money Is Made) 345
Hit Singles from Broadway Shows 346 / Broadway Show Music in Commercials 347 / Television Commercials Promoting a Broadway Musical 347 / Television Performances of Songs in the Play 348 / Television Performances of the Play 348 / The Broadway Show Cast Album 348 / Motion Picture Soundtrack Albums 349 / Successful Cover Records 350 / Cover Singles 350 / Sheet Music Folios 350 / Royalties from Motion Picture Theaters 350 / Broadway Songs Used in Television Programs 351 / Broadway Songs Used in Motion Pictures 351 / The Broadway Musical as a Motion Picture 351 / Home Video/DVD/Downloads 352 / Noncast Albums of the Broadway Musical 352 / Catalogue Musicals 353
Conclusion 353
12. Music, Money, Internet,Video Games, Cell Phones, and New Media 355
Main Issues 355
The Laws 356
Rights 356
Ascap, Bmi, and Sesac Internet Licenses 359
Downloads and Online Subscription Services 359
Unilicense 362
Podcasting 362
Ringtones/Cell Phones 362
Term 362 / Territory 363 / Royalties 363 / Co-Written Compositions 363 / Fixation Fees 364 / Most Favored Nations Clauses 364 / Compositions Controlled 364 / Rights Granted by the Music Publisher 365 / Performance Rights 365 / Timing 365 / Royalty Accountings 365 / Other Provisions 366 Master Ringtones/Master Ringbacks 366
Ringtones/Foreign Countries 367
Streaming 368
Licensed Rights 368 / License Fees and Services 368 / Performance Rights 369
Video Games 370
Types of Video Game Music 370 / Songs in Video Games 371 / Video Games Based on Television Series 373 / Video Games Based on Movies 373 / Video Game Underscore Contracts 373
Digital Jukeboxes 375
Grant of Rights 375 / Royalties 375
Record Company Contracts 376
Royalty Calculations 376 / Recording Artist Royalties for Downloading Master Recordings 377 / Escalating Royalty Clauses 378 / Term/Release Obligations/Advances 378 / New Pricing Approaches for Physical Product 379 / Deductions 381
Website Ownership and Control 381
Website Merchandise Sales 383
Dual Disc/DVD Plus/Video Recordings 383
Record Company/Traditional versus Internet 384
Music Publishing Contracts 385
Commercial Release/Internet 385
Conclusion 386
13. Music, Money, and Foreign Countries 387
Overview 387
The Role of the Subpublisher 388
Administration versus Promotion 388 / Worldwide Representation vs. Territory-by-Territory Agreements 389
The Subpublishing Agreement 390
Term 390 / Royalty Percentages 390 / Local Cover Recordings 391 / Increased Fees for Cover Records (Mechanical versus Performance Income) 391 / Print 392 / Compositions Controlled by the Agreement 392 / Advances 393 / How Advances Are Paid 394 / Information That Must Be Supplied to the Foreign Representative 394 / At-Source Royalty Payments 395 / Rights Granted to the Foreign Representative 396 / Rights Reserved by the U.S. Publisher 398 / Royalty Payment Dates and Audit Rights 398 / Retention Rights 399
Foreign Performing Rights Societies 400
Organization and Distribution Rules 400
Mechanical Royalties 402
Ringtones 403 / Downloads/Streams/Subscription Services 403
Conclusion 404
14. Putting It All Together 405
Mechanical Royalties 406
Recording Artist Royalties 407
U.S. Performance Royalties 407
Commercial Use 408
Motion Picture Use 409
Television Series Use 410
Foreign Mechanicals and Performances 410
The Broadway Musical 410
Motion Picture Underscore 411
Additional Income-Producing Areas 411
Conclusion 412
15. Music, Money, and the Buying and Selling of Songs 413
Overview 414
Purchase of Assets 414 / The Purchase Price 415 / Calculation of Net Income (Cash vs. Accrual Basis) 415 / Salaries and Other Costs of Doing Business 416 / Purchase Price Multiples 417
The Prospectus: Its Form and Content 417
Business Summary 417 / Financial Information 418 / Listing of Top-Earning Compositions 418 / Net Income and Earnings History Charts 418 / Current Contracts 420 / Foreign Subpublishing Agreements 421 / Future Commitments 421
The Letter of Intent/Short-Form Commitment-to-Sell Agreement 422
Description of Assets Being Sold 422 / Earnings History 423 / Purchase Price 423 / Warranties 424 / Subpublishing Agreements 424 / Income Cutoff Date 424 / Definitive Closing Date 425
Investigating the Assets Being Acquired 425
Financial Due Diligence 425 / Legal Due Diligence 428
The Formal Purchase Agreement 432
The Aftermath of the Acquisition Agreement 433
Buy-Back Provisions 434 / Income Participation 434
Mergers 434
Securitization 435
Assignments of Writer Royalties 435
Conclusion 436
16. Music, Money, Lawyers, Managers, and Agents 437
Lawyers and Their Role 437
Lawyers’ Fees 438 / Costs and Disbursements 440
Managers and Their Role 441
Manager’s Contracts 441 / Manager’s Fees 443
Agents 443
Conclusion 444
17. Breaking Into the Business 445
Music Websites/Internet 445
Co-Writing Songs with Writers with Publishing Deals 446
Being in a Performing Group 447
Submitting Songs to Music Publishers 447
Demo Recordings 447
Songwriter Conferences 448
Showcases 449
Attorneys 449
Record Producers 450
Managers 450
Agents 450
Music Videos 451
Cable Television 451
ASCAP and BMI 452
PBS/NPR Radio Stations 452
Internet Radio 452
Paying to Get Your Songs Published 452
Finding the Right Publisher 453
Different Types of Publishers 453
Film and Television 454
Music Supervisors 456
Demo Reviews in Magazines 456
Conclusion 456
18. Guide to Music Industry Organizations 457
Academy of Country Music (Acm) 457
Amercian Federation of Musicians (Afm) 458
Amercian Federation of Television and Radio Artists (Aftra) 458
Country Music Association (Cma) 459
Dramatists Guild, Inc. 459
Gospel Music Association (Gma) 460
Harry Fox Agency 460
Nashville Songwriters Association International (Nsai) 461
National Academy of Recording Arts & Sciences (Naras) 461
National Music Publishers Association (Nmpa) 462
Performing Right Organizations 462
Recording Industry Association of America (Riaa) 464
Society of Composers & Lyricists (Scl) 464
Songwriters Guild of America (Sga) 464
SoundExchange 465
U.S. Copyright Office 466
19. Sample Contracts 467
Motion Picture Synchronization License 468
Television Synchronization License 472
Advertising Commercial Synchronization License 475
Digital Download License 479
Video Game License 481
Mechanical License Agreement 485
Index 487