In this article I will be discussing the 4 most important areas of the music industry:
- Live Performance
- Record Companies
- Music Publishers
- Artist Management
Within each of these areas I will be discussing the main elements that help make them achieve their function in the music industry successfully.
Record companies help produce and sell recordings and this is what makes them one of the most important areas of the music industry. There are 2 main types of record labels within the industry, Major labels and Independent labels.
Major labels are often owned by a parent company, for example Columbia records is owned by Sony. This gives major labels are greater financial backing than independent labels. Whereas true Independent labels are independently funded and aren't connected to any major labels. This is the main negative of an indie label as they can't afford the marketing campaigns major labels can. This can lead to smaller record sales, leading to the band making less income. (McDonald, 2017)
Major labels also have departments within them that are necessary to release albums. Due to this major labels have more of a structure to their work whereas independent labels are more free flowing. Indie labels have more freedom to pick and choose artists they work with, and are less likely to insist on changes to sound or image. They work with fewer artists, so they give more attention to promoting the bands they have. Whereas major labels often give certain bands more attention than others, leading to some bands opting to leave the major label as they feel as if they are being mistreated. (McDonald, 2018)
Both major and independent labels have their own advantages, however if I had the choice between both I would choose a major label. This is due to the larger budgets that would be put behind promoting and making an album.
The decline in record sales, due to the popularity of streaming, means bands have to tour more in order to make the majority of their income. This has led to live performance becoming one of the major areas in the music industry.
The main area within live performance is the setting up and promotion of a gig. In order to book a gig, the artist, or booking agent, contacts the promoter that puts on gigs at the selected venue. Concert promoters often work for multiple venues in the same area, this makes it easier for circumstances of which the venue has to be changed for the gig, as the promoter can often move it to a concert in the same area of town with little hassle. From here a hire fee for the venue and sound engineer is agreed. The promoter usually helps out with organising the gig at the venue and sorting out online ticketing. They can also be the main way for the artists to notify of any change to the gig, for example a band pulling out of the concert. (Voogt, 2018)
Concert promotion is mainly done online and through social media. It is important when promoting a concert to recognise which social media platform the artists fan-base uses the most, otherwise the concert will fail to meet as many people as it could have. Facebook has become arguably the most important platform for this, thanks to the events page creator. This allows the artist to create a page for the gig and invite people to the event who can then share the page, which overall helps spread awareness of the event.
Due to live performance becoming the main source of income in the modern era for artists, it is important that social media platforms are used correctly for the gig to be successful.
Artist management is the area of the industry that should have the artists' best interests in mind. They are to be the way of communication from potential business partners and the artist, and developing the band as a brand.
It can be pivotal in a bands career to choose the right artist management, as they can often help make a bands career easier. The personality of the artists' manager can often determine this, as they have to constantly be chasing, and pitching opportunities for the band. They have to be used to being told no but still continuing on and trying to make things happen for the artist.
This is not the only type roles of an artist manager though, as they often believe in the band they can often help out with choosing what tracks should go on an album and what to release as a single. This is important as it is the artist management that will contact radio and TV for promotion opportunities, so it is key everyone agrees on everything regarding the music.
Artist management often start work for the band for free as a trial like period. After this a commission agreement is often made of around 20% of all income. Part of the contract is an expectation of what the artist and manager will achieve during the length of the contract, which is normally 3 years. (Voogt, 2018)
Music publishing is the area of the industry that helps promote, protect and value compositions of the artist. However, publisher do not own the recordings of a composition, this is normally owned by the artists and record label, but the words and music.
This is done by the artist and publishing company agreeing a contract that states, what works are going to be covered, how long the company will issue licenses for, the rights each party has, and any advances and how the royalties will be split.
Good music publishers will have many industry connections, as this will allow maximum business for the agreed compositions, due to more potential license holders. Music publishers will license compositions to other areas of business, such as:
- Record labels
- Radio Stations
To each of these areas a different license is issued depending on the use of the composition. A performance license is issued when work is broadcast or performed live. Mechanical licenses are issued when a copy of work is made, for example a composition being put on a singles compilation. Synchronisation license is used when a composition is used with a visual, for example in movies, in this license it is important the platform the work will be on is specified in the contract. (Michaels, 2006)
In this task I will be giving an in depth look at contracts within the live performance area of the music industry. I will be looking at specific contracts promoters deal with within their field and commenting on key areas that these roles must focus on in these contracts. I will also look at a merchandising contract, as this is part of the ways a band can make money on tour.
Promoters are often given a performance agreement contract from musicians to sign.
In this contract the artist defines the details of the performance, this can prove to be key in making sure a performance runs smoothly and all aspects, such as cancellations, are covered so both parties know what to do.
Here I have attached a typical performance agreement contract template. The first 2 sections of the contract are self-explanatory, they outline the main details of the performance, such as:
• Time and date
• Stage times
These are obviously key parts of the contract as, for example stage times, are important otherwise the venue could get in legal trouble if concert goes past curfew time, or cost the band and venue money.
Section 3 is where the more specific areas of a contract, often areas that can go wrong, that to come in to play. In this contract the band are asking for compensation for the show, this can often be to cover travel etc. for the concert. Here the artist states that 50% of the required fee is due upon signing the contract, otherwise the negotiations will not go further ahead. In my opinion this is a key area to consider in a performance agreement contract as it helps with covering costs for the concert, making it more financially viable.
The cancellation area in this contract seems to act as if a way of securing the payment before the gig. The section states that if the full payment is not made prior to the bands show, as only 50% is paid upon signing, the band have the right to cancel the show. It also says if the cancellation is made by the venue and promoter, 48 hours before the show, the 50% is non-refundable. But if the show is cancelled under 48 hours before performance, the full payment still has to be made to the band. This proves as a way of making sure the performance is confirmed, as the promoter and venue will not want to pay the band the desired fee without the performance taking place, so It acts as a good way for the band to make sure they do not get double booked by the venue.
The next few clauses are more in depth agreements of the opening sections. They cover an agreement for sound-checks and parking near the venue. The next key area is the security, health and safety and indemnification. These areas makes sure that the venue is sufficient for the concert to take place, making sure it is big enough for the crowd and has a stable construction. It takes care of making sure the venue has security and emergency staff ready in case of any emergencies, such as an injure fan etc. In this case the artist has made sure that the venue holds injury and property insurance to cover any claims if someone was to be injured, or if damage occurs to the property. In my opinion it is a good idea to include this clause in the contract, as it helps keep the band out of any legal issues, which often cost money. This idea is continued in the Arbitration settles disputes section. This basically means that any disputes between both parties are settled outside of court. This again keeps the artist out of court, and the venue in this case, preventing money being spent on a court case.
In my opinion a performance agreement contract is important for larger touring artists, as they are often booking tours across weeks to months. So for them it can help make sure everything is organised and all legal areas are covered in one document.
Bands are often approached by merchandising companies when they start playing larger venues. These contracts obviously talk about sale through both live performance and retail, however I am going to focus on the clauses within the contract that effect the live performance area of the industry.
The definitions clause is the first clause in the contract. It determines the members of the band and that their licensed property can be used on merchandise, logos etc., and that previous property rights are not assigned to this deal. This means that the merchandise company can use any images to do with the band without having to solve copyright issues. The next area of definitions I will talk about is the merchandising rights. This right is that the company has exclusive rights to sell merchandise by the following ways:
- Live performance sales – rights for sales of merchandise to do with a bands' live performance
- Mail order – sales which include the use of the mail system, such as online sales through bands' website
- Sub licenses – This gives the company the right to allow third parties to sell products to distributors, this creates multiple retail companies with the rights to sell the merchandise.
The terms of a merchandising agreement are often based on a bands tours, so the term for the rights starts at the beginning of the tour and ends when the tour ends. This particular contract also has the option for the contract to end when advance is paid back. In my opinion this is an area smaller bands need to look out for. I would agree with the company to recoup the amount of advance the band have when the term ends. This would help prevent the band from being in a contract they could not get out of. This could lead to the company having the rights for longer without paying anymore advances.
The next clause of the contract that is relevant to the live performance area is the royalties clause. This area has a specific agreement for live performance sales. This states that 80% of the net profit received, from a specific area of the world, on the sale of merchandise at a live performance must go to the licensor, and 70% from all other areas of the world. Here the merchandising company will choose an area that the band are likely to sell lots of merchandise in, in order to make as much money as possible. Although it seems like 80% and 70% are high amounts, this is not the case as it is from net profit. This means that all expenses from the tour are covered, it is important for bands to make sure this is in the contract so they can make sure expenses are covered.
Abts, M. (2018). Band Performance Contract - PDF and Word Download. [online] Docracy.com. Available at: https://www.docracy.com/5972/band-performance-contract [Accessed 2 Jun. 2018].
McDonald, H. (2018). Here Is a Look at How Indie Record Labels Work. [online] The Balance Careers. Available at: https://www.thebalancecareers.com/signing-with-an-indie-label-2460744
[Accessed 4 Jun. 2018].
McDonald, H. (2018). The Record Label's Role Within the Industry. [online] The Balance Careers. Available at: https://www.thebalancecareers.com/what-is-a-record-label-2460614 [Accessed 3 Jun. 2018].
Michaels, T. (2018). What Does A Music Publisher Do, Anyway? [online] Theodoramichaels.com. Available at: http://www.theodoramichaels.com/articles/publisher.php [Accessed 4 Jun. 2018].
Musiciansunion.org.uk. (2018). Specimen Merchandising Agreement. [online] Available at: https://www.musiciansunion.org.uk/getattachment/b7de693e-c766-470e-8adf-ace67e95c8a1/.aspx [Accessed 4 Jun. 2018].
Voogt, B. (2018). Understanding the Music Industry: Artist Managers and Booking Agents - what they do and why you need them. [online] Heroic Academy. Available at: https://heroic.academy/understanding-music-industry-artist-managers-booking-agents/ [Accessed 4 Jun. 2018].
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