Music Business Glossary

An administrative agreement takes place between a songwriter/publisher and an independent administrator, or between a writer/publisher and another music publisher. In an “admin deal,” the songwriter self-publishes and merely licenses songs to the music publisher for a term of years and for an agreed royalty split.

An advance is a pre-payment of royalties, whether the advance is paid by record company to an artist, a publisher to a writer or a merchandiser to an artist. It is sometimes called a “minimum guarantee.”

A company that specializes in distributing music to online music vendors and streaming services.

A recording made from a radio or television broadcast, often used for demonstration or quality control purposes.

As the name implies, it refers to the royalty payable by a label, including the royalty rates payable to the producers and mixers as well as what is left over for the artist.

This statement summarizes the annual distribution of work licensed under the compulsory mechanical licensing provisions. The notice includes information about the distribution of a project, explicitly as defined in the compulsory mechanical copyright law. It is audited and signed by a certified public accountant. It is due shortly after the end of the year.

An arrangement is developing a new concept of a previously composed work. It may differ from the original work by means of reharmonization, melodic paraphrasing, orchestration, or development of the formal structure.

The American Society of Composers, Authors, and Publishers (ASCAP) is an American non-profit performance-rights organization (PRO) that protects its members’ musical copyrights by monitoring public performances of their music, whether via a broadcast or live performance and compensating them accordingly.

It is the transfer of rights to a song or catalog from one copyright holder to another.

The Audio Home Recording Act of 1992 (AHRA) amended the United States copyright law by adding Chapter 10, “Digital Audio Recording Devices and Media”. The act enabled the release of recordable digital formats by consumers without fear of contributory infringement lawsuits.

Broadcast is the distribution of audio or video content to a dispersed audience via any electronic mass communications medium.

Broadcast Mechanical royalties are generated by the broadcast of music on television or radio in many countries. Because they are technically mechanical royalties, these royalties cannot be paid to writers through ASCAP, BMI, and SESAC who work exclusively with performance royalties. Instead, these royalties are often paid to foreign sub-publishers who then remit the funds back to their publishers.

The Canadian Musical Reproduction Rights Agency is a music licensing collective that represents the vast majority of music publishers and copyright owners doing business in Canada.

The co-publishing deal is perhaps the most common publishing agreement. Under this deal, the songwriter and the music publisher are “co-owners” of the copyrights in the musical compositions. The writer becomes the “co-publisher” (i.e. co-owner) with the music publisher based on an agreed split of the royalties. The songwriter assigns an agreed percentage to the publisher, usually (but not always), a 50/50 split.

A term that signifies that the creator owns and controls their copyrights in both musical works and master sound recordings.

Collection Societies protect the rights of musicians and songwriters, to monitor the performance of musical works and to make sure musicians get paid.

A musician who is an author of music in any form, including vocal music,instrumental music, electronic music, and music which combines multiple forms.

It refers to an original piece or work of music, either vocal or instrumental, the structure of a musical piece. The music and lyrics are frequently referred to as the underlying composition. It is the intellectual content of a musical work.

A compulsory license lets a musician record (and sell) a rendition of a previously recorded song by paying royalties to the original composition artist who is the legal copyright holder of the work.

A license that the owner of a copyright has to issue.

A controlled composition is a song written, owned or controlled by the artist.

Copyright is the exclusive right given to the creator of a creative work to reproduce the work. Music copyright designates the ownership of a particular song or recording.

The Copyright Act of 1976 is a United States law spelling out the basic rights of copyright holders. The first right protects the underlying musical composition, that is, the specific arrangement and combination of musical notes, chords, rhythm, harmonies, and song lyrics. The second right protects the actual recording of a musical composition.

The filing of paperwork with the Copyright Office. If you’re registering your music copyright directly, you’ll file Form PA for a composition and Form SR for a sound recording. And if you want to register both the sound recording and the composition, you can use ONE form (SR) to register, as long as the owner is exactly the same for both copyrights.

The Copyright Royalty Board (CRB) is a U.S. system of a three-judge panel that determine the rates and terms for copyright statutory licenses and make determinations on distribution of statutory license royalties collected by the U.S. Copyright Office of the Library of Congress.

Creative Commons (CC) is one of several public copyright licenses that enable the free distribution of someone else’s copyrighted “work”. A CC license is used when an author wants to give other people the right to share, use, and build upon the work that they (the author) have created.

The term cue originates from theatrical productions and relates to the insertion of music as a prompt for a performer or stage hand to carry out an action or deliver a line.

A cue sheet, or cue file, is a metadata file which describes how the tracks of a CD or DVD are laid out. Cue sheets are stored as plain text files and commonly have a .cue filename extension.

A single song, track, or continuous musical selection on a vinyl record, or a single track on a CD or other recording medium. The term cut comes from the days of audio recording when the sounds were actually ” cut ” with a stylus as a spiral groove into a vinyl disc or wax cylinders.

An expressive creation that includes major copyrightable elements of an original, previously created first work (the underlying work).

Digital Service Providers (DSPs) provide the technologies and services that bring digital content and services to consumer and enterprise end users. Examples are iTunes and Amazon.

A descriptive catalogue of musical recordings, particularly those of a particular performer or composer.

A draw is an amount of money a staff songwriter receives for a given month before his monthly sales figures are calculated.

Digital rights management (DRM) is a systematic approach to copyright protection for digital media. The purpose of DRM is to prevent unauthorized redistribution of digital media and restrict the ways consumers can copy content they’ve purchased.

An extended play record, often referred to as an EP, is a musical recording that contains more tracks than a single, but is usually unqualified as an album or long play (LP).

The right to offer the original or copies of the work to the public or to bring it to the market.

Fair Use is a doctrine in the law of the United States that permits limited use of copyrighted material without having to first acquire permission from the copyright holder.

It is an aspect of copyright law which permits the publisher or copyright owner access over the first use of the work.

Under the Copyright Act, a work is fixed in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.

In essence, “free goods” are a roundabout way for labels to discount records so stores will be more inclined to buy them. So rather than sell Best Buy 100,000 records at the regular wholesale price, the label will sell them for a lower price.

Grand right is the right to perform musical compositions within the context of a dramatic work. This includes stage performances such as musical theater, concert dance, and arrangements of music from a dramatic work.

The Harry Fox Agency is a provider of rights management, collector and distributor of mechanical license fees on behalf of music publishers in the United States.

A hook is a musical idea, often a short riff, passage, or phrase, that is used in popular music to make a song appealing and to “catch the ear of the listener.”

Copyright infringement is the use of works protected by copyright law without permission for a usage where such permission is required, thereby infringing certain exclusive rights granted to the copyright.

Intellectual property refers to creations of the mind: inventions; literary and artistic works; and symbols, names and images used in commerce. Intellectual property is divided into two categories: Industrial Property includes patents for inventions, trademarks, industrial designs and geographical indications.

Interactive or on-demand streaming services allow the listener to select and play any song “on-demand”. This is distinctly different from non-interactive streams. That is, users may choose a specific track or artist they wish to hear, and are typically provided a pre-published playlist, in many cases.

The Interested Parties Information Code (IPI) is an identifying number assigned in the CISAC database to each Interested Party in musical rights management.

A royalty paid to a songwriter whenever a copy of one of their songs is made in foreign territory.

The International Standard Recording Code (ISRC) system is the international system for the identification of recorded music and music videos. Each ISRC is a unique identifier that can be permanently encoded into a recording or music video. Encoded ISRCs automatically identify recordings for PPL payments.

An ISWC (International Standard Musical Word Code) is a unique code assigned to a specific musical work or composition written by the songwriter(s).

A clause that states that if a member of the group who is considered to be critical to the overall sound, style, or identity of the group decides to leave, the record label can claim breach of contract, which can result in its cancellation.

This is a letter written to a collection organization stating that a publisher will take care of the administrative control of a song writer’s catalog on behalf of the song writer.

A license is a document or agreement to allow a person/company use your music, usually in return for a fee. When you “license” your music to someone, it means you keep the rights to the music, you are simply allowing them to use it for a specific project.

License fees are charges for the permission to use a copyright- protected musical work. The types of license fees may be a flat fee (for a defined period of usage) or royalty payments determined by the number of copies of the work sold or the total revenues acquired as a result of its distribution.

A Licensee is the person or entity to whom the work is licensed. That is, the actual person or company who is being granted a license.

A Licensor is the person who is providing someone else with a license or permission.

A master recording is the first recording of a song or other sound, from which all the later copies are made. Master recordings (usually called just “masters”) can be made on discs, tapes, and computer data storage formats. On a master recording, the symbol, ℗ (phonogram) is placed to indicate a master recording copyright.

A master use License is a license in which the copyright owner allows reproductions of master recordings. In most cases, a sync license is usually required along with a master use license.

Mastering is the process of preparing and transferring recorded audio from a source containing the final mix to a data storage device (the master), the source from which all copies will be produced (via methods such as pressing, duplication or replication). It is a form of audio post production.  Mastering requires critical listening; however, software tools exist to facilitate the process.

Mechanical Copyright Protection Society is a UK collection society.which collects mechanical royalties due to the Licensor. They represent songwriters, composers and music publishers. Also  represent their mechanical rights, and collects royalties whenever their music is reproduced as a physical product. This includes CDs, DVDs, digital downloads and broadcast or online.

A mechanical license is an agreement between a music user and the owner of a copyrighted composition (song), that grants permission to release the song in an audio-only format (interactive audio streams, digital downloads, CDs, vinyl). This permission is also called mechanical rights.

The Mechanical Licensing Collective (MLC) was created by the U.S. music publishers and songwriters and designated by the U.S. Copyright Office to handle licensing and administering rights under the Music Modernization Act (MMA), The MLC’s tasks include the negotiation of a budget with the digital streaming services (who, by law, must fund the collective), partnering with a vendor to provide administration and matching services, and development of a user portal through which publishers and songwriters will be able to manage rights and royalties. It is authorized and backed by the National Music Publishers Association (NMPA), the Nashville Songwriters Association International (NSAI) and the Songwriters of North America (SONA).

The “mechanical” right is the right to reproduce a piece of music onto CDs, DVDs, records and tapes. (Non-mechanical reproduction includes such things as making sheet music, for which royalties are paid by the publisher to the composer.)

Mechanical royalties are a royalty paid to a songwriter whenever a copy of one of their songs is made in digital or physical formats.Also,covers any copyrighted audio composition that is rendered mechanically (i.e., without human performers). Such as music videos, downloaded tracks, compact discs, tape recordings, DVDs, computer games, etc. In the U.S., the Harry Fox Agency, HFA, is the predominant licensor, collector and distributor for mechanical royalties, although there are several small competing organizations.

Micro-Sync (i.e. “Friendly Music”) is a service that enables video creators so that they can legally license music for multimedia projects. Micro-Sync is also the term used when selling a license to a YouTube user in order to develop more content for CiD to monetize.

A most favoured nation clause is a contract provision in which a seller (or licensor) agrees to give the buyer (or licensee) the best terms it makes available to any other buyer (or licensee).

Music Modernization Act or MMA (H.R. 1551, Pub.L. 115–264) is United States legislation signed into law on October 11, 2018 aimed to modernize copyright-related issues for music and audio recordings due to new forms of technology like digital streaming.

Music publishing is all about songwriters and copyrights. When music is used commercially (whether sold, licensed, or publicly performed), the songwriter and copyright owner is owed royalties. A music publishing company can offer multiple services for songwriters. As a ‘publishing administrator’, they administer the copyright – protecting the use of songs as well as collecting royalties owed from use. On the creative side, some music publishers focus on the use and exploitation of the copyrights they administer by securing opportunities in the form of ‘sync licenses’ for film, TV, ads, video games, etc. Additionally, these creative teams play an active role in setting up co-writes and pitching songs to artists and labels to be recorded for the first time.

Music Reports  helps songwriters collect mechanical royalties in the USA. Their service allows musicians to better track and manage their music rights, licensing, and royalties. Music Reports serves individuals and organizations seeking expertise and solutions in music rights licensing, administration, royalty accounting, and software development and hosting.

A music supervisor is a qualified professional who oversees all music related aspects of film, television, advertising, video games and other existing or emerging visual media platforms as required. Also, a music supervisor is often responsible for managing a team of music directors working on any number of musical productions.

The term Metadata refers to descriptive information that is attached to a digital files. All digital files have some sort of metadata attached. In the music industry, the metadata that is attached to mp3 files include; song title, artist name, album title, song lenth, and genre. You can also add further information such as producers, songwriters, publishers, ISRCs, UPCs, and more.

Neighboring Rights refer to the right to publicly perform or broadcast a sound recording. The name comes because these are performance rights that “neighbor” the performance royalties that are collected by PROs.

The remaining percentage payable to the artist.

The amount of royalties received by a music publisher, minus any amounts of those royalties that have to be paid to writers, performers and anyone else who receives a share of royalties.

The net receipts is when the label takes the gross receipts for the album and deducts all of the direct costs. The gross receipts are all of the money that the label makes from the album through wholesale sales of the CD. The direct costs include things like:

Studio time and labor costs to record the albumThe costs of producers, technicians, etc. to produce a masterThe costs of pressing and packaging the album shipping costs to get the albums to retailers, Marketing, advertising and promotion.

A notice sent by a proposed user of a song (a non-dramatic musical work) informing the copyright owner of such work that the service (such as a Digital Service Provider) intends to make and distribute a phonorecord “recording” of the work pursuant to the compulsory license.

Copyright-protected works for which rights holders are positively indeterminate or uncontactable. Sometimes the names of the originators or rights holders are known, yet it is impossible to contact them because additional details cannot be found.

These are opportunities for artists to earn passive income through continued royalties or usage fees.

Performance royalties are generated from any public performance like music playing in bars or restaurants, playing a live gig, or when your music is broadcast on radio or TV. Payments are made to the songwriter or publisher for the public performance.

Provides intermediary functions, particularly collection of royalties, between copyright holders and parties who wish to use copyrighted works publicly in locations such as shopping and dining venues. ASCAP, BMI, SESAC, are the three United States performance organizations.

Performing Right Society is the UK’s leading collection society, bringing together two collection societies: the Mechanical-Copyright Protection Society and the Performing Right Society. It undertakes collective rights management for musical works on behalf of its members.

The act or process of getting the attention or audience of a music publisher in a song.

A podcast is an episodic series of digital audio or video files which a user can download in order to listen.

A power of attorney (POA) is a written authorization to represent or act on another’s behalf in business or legal matters.

A record producer or music producer oversees and manages the sound recording and production of a band or performer’s music, which may range from recording one song to recording a lengthy concept album.

To calculate a cost, payment, or price according to the amount of something that has been used, in relation to the fixed rate for a larger total amount. Royalties can be prorated based on the number of recordings that are produced by a particular producer on a record. For instance, when a songwriter, artist, publisher or label is not entitled to earn royalties for every song on an album, the royalties will be prorated.

Public domain music refers to all the music whose rights are expired, that don’t have copyrights or the music whose authors submitted into the public domain. It is all the music that can be shared freely and without any legal consequences.

A song is considered to be a publication only when it has been issued to the general public by a publisher with the aim of generating money.

A music publisher is responsible for ensuring the songwriters and composers receive payment when their compositions are used commercially. Music publishing is the owning and exploiting of songs in the form of musical copyrights.

This is the share of money received by a publisher from the money generated from a publication. It is usually  a certain percentage based on a contractual agreement between the songwriter and the publisher.

A music publishing agreement is an agreement between a songwriter and a publisher in which the music publisher is responsible for finding users for the song, issuing licenses for its use and giving a portion (usually by percentage) of the money generated to the songwriter.

Rate Per Song is a fixed amount of money generated from each minute the song is listened to or number of times a track is played, whichever one is greater.

Recoupment simply means payback. Recoupment is the practice of claiming an advance provided to an artist back from that artist rather than other sources.

Artists are paid based on the number of products sold(not shipped). Recording company withhold or reserve a percentage of the royalty payments as a means of compensation for returned goods.

Retroactive royalties are unallocated royalties that are waiting to be paid out to the copyright owners. This usually arise when songs aren’t registered correctly or the contact information for the songwriter is unavailable.

Returns are excess physical records that are returned by a retailer to a distributor for full refund in case of any unsold records.

A reversion clause is part of a contract between a songwriter and a publisher and dictates the amount of time that a publisher owns the rights to the songwriter’s work.

This agency collects and distributes mechanical royalties and is responsible for the tracking and collection when a song is reproduced or copyrights are violated.

Royalties are payments that go to recording artists, songwriters, composers, publishers, and other copyright holders for the right to use their intellectual property.

Royalty Base Price means all revenues billed or billable from use of copyrighted music content by  Publisher to any third party.

A musical composition written in parts for different musical instruments.

The Society of European Stage Authors and Composers (SESAC) is a Performance Right Organization based in the US. It ensures that people who hold a copyright on a song played in a business or public place, get paid for their work.

A single song agreement is an agreement between the songwriter and the publisher in which the writer grants certain rights to  the publisher for one or more songs. In single song deals, the writer is paid a one-time recoupable advance.

The Society of Composers, Authors and Music Publishers of Canada (SOCAN) is a Canadian performance rights organization that represents the performing rights of songwriters, composers and music publishers.

Soft ticket show has a built in crowd with either free entry or cheap tickets. While hard ticket show is a standalone play that includes a headliner with clear history of selling tickets in the market.

Feedback received from a music professional or another songwriter.

One who works directly with music publishers to promote songs to recording artists or for use in Film and Television.

A professional that writes both lyrics and composes musical compositions for songs.

The electrical, mechanical, electronic or digital inscription of sound waves such as spoken voice, singing, instrumental music or sound effects.

A non- profit performance rights organization that collects and distributes digital performance royalties for sound recordings.

A method of tracking sales of music and music video products in the US and Canada. It is the sales source of billboard music charts, making it the largest source of sales record in the music.

Split represent the percentage of ownership each co-writer has over a specific song.

A written agreement between two or more music creators that identifies each contributor and establishes specific ownership percentages amongst them. It helps determine how much each contributor will be paid when income is generated from their music.

A songwriter who writes lyrics and composes musical compositions for songs, for a single music publishing company, and get paid through an exclusive songwriting contract. A staff writer receives “cash advance” that must be paid back when a song generates royalties from its use.

The Statutory Mechanical Royalty Rate is the rate set forth by the Copyright Arbitration Royalty Panel for compulsory mechanical licenses.

Acts on behalf of the original publisher of a musical work, taking on the role of the agent in a particular territory to collect royalties, monitor copyrights and promotes the works represented.

They are foreign publisher that represents the entire individual copyrights of the original publisher in another country. They focus on administration and do not have any ownership share.

A subscription service offers periodic (monthly, yearly, or seasonal) use or access to a product or service. Rather than selling products individually, the subscription model is used by digital streaming services to offer music on-demand over the Internet.

This is the price that the manufacturer suggests to its retailers to sell a music CD or album.

This is the money paid to a songwriter or music publisher in other to use his/her song to synchronize visual productions.

The use of music in a visual piece such as movies, video games, commercial or other audiovisual production.

This is the right to use a piece of music as a soundtrack with visual images. It is the right to use music in timed relations with other visual elements in a film, video, TV shows, commercials or other audiovisual production.

This is financial support to a touring band. It can be used to cover accommodation, equipment and whatever other expenses come up during the tour.

Not asked for or requested. Not done voluntarily.

A form of media created by an individual user or group of users and then distributed over the internet. It is often created for the purpose of entertainment.

A series of lyrics that tell the main story of the song and keep the thoughts moving forward.  Whatever the number of verses a song has, they take the main idea and explore it in different ways. This section precedes the chorus in a song.

A form of copyright that removes ownership from the actual author of a work. According to the Copyright Act, in the case of work-for-hire, the work belongs to the employer of the actual author, since the work was done within the scope of his/her job. Copyright cannot be legally assigned to the employer without a signed, written contract stating that the author relinquishes the copyright; verbal agreements will not hold up in court.

The percentage of ownership an author or composer has over his or her work.