Re: Music Business Law

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Producer- Deals
Can get kickbacks

musicians finder’s fees- 10%-20% payed to the producer for finding their talent. These are fees that are off the books, the record company usually does not usually know about them. They might hide the fees are class them other things to obscure what it is. This isn’t really an approved method of doing things. Producer might ask for a stipend for the band or the artist for living expenses to be taken out of the recording budget. There can also be kickbacks for vendors with studios/engineers for being hired for a job. Sometimes the producer ask for 15% of performance royalties depending on what the producer has done. This is not usually an acceptable idea but it would normally be negotiated in the record contract.

DMCA- Digital Millennium Copyright Act
-Only for Digital Transmission (internet radio, etc)
-Record companies are getting 2-3% of performance royalties

Record Companies point of View
-2008 downloaded sales = 10%
-most popular music is adult contemporary (country, like rock). Second most popular is Rap and Rock

Inde- 20% Sales goes to Distributors. Usually they like use large distributors to assure they will get paid for their sales. Smaller distributors run a risk of going out of business.
Major- Own distribution companies and pay nothing.

Aggregation Fees- goes to the aggreagator, who deals with digital downloads. The aggregator is the middle man to the digital distributor (Naptster, iTunes). The digital distributor takes around 33% and then and then the aggregator takes about 10%.

Singles- used to be popular. A new artist would release a single and if it did well they would release another one then maybe a third. If they did good on these then they would release an LP. CD singles were not that popular. The singles are thought as promotional items now and digital downloads have probably replaced them.

Charts- Billboard tracks sales and uses Sound Scan- with tracks barcodes. This includes only larger retailers not Mom and Pop shops. The College Music Journal (CMJ) tracks what is played on College Radio stations. Many of these artist are Indie artists. Records and Radio (R+R) tracks sales of individual songs this is very expensive for a subscription. There are also online charts.