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Legal music industry terms

Exclusive Rights

A clause in a contract that grants one party the sole right to use, distribute, or exploit a specific work, product, or service. In a music industry contract, exclusive rights may be granted to a record label or publisher, preventing the artist or songwriter from entering into similar agreements with other parties during the term of the contract.

Term

The duration of a contract, typically expressed in months or years, during which the parties are bound by the agreement’s terms and conditions. In a music industry contract, the term may be defined by a specific length of time, a certain number of album releases, or other milestones, depending on the nature of the agreement.

Option

A contractual provision that allows one party (typically a record label or publisher) the right, but not the obligation, to extend the term of a contract or to require the delivery of additional works or services. Options are commonly used in recording and publishing contracts to provide the label or publisher with the flexibility to continue working with an artist or to terminate the relationship based on the artist’s performance or other factors.

Advance

An upfront payment made by a record label, publisher, or other party to an artist, songwriter, or producer as part of a contractual agreement. Advances are typically recoupable, meaning they are considered loans that must be repaid from the artist’s future royalties before the artist starts earning income from their music.

Recoupment

The process by which a record label, publisher, or other party recovers the costs and advances associated with producing, promoting, and distributing an artist’s music. In a music industry contract, recoupment provisions outline how and when the artist’s royalties will be applied to repay these expenses before the artist begins earning income from their music.

Royalty Rate

The percentage of revenue or sales that an artist, songwriter, or other copyright holder is entitled to receive under a contractual agreement. Royalty rates can vary based on the type of rights, usage, and other factors, and are typically negotiated as part of a recording, publishing, or licensing contract.

Escalation Clause

A provision in a contract that allows for an increase in an artist’s royalty rate, advance, or other compensation based on specific criteria or milestones, such as sales thresholds, chart performance, or other indicators of success. Escalation clauses are often used as incentives for artists to achieve higher levels of commercial or artistic achievement.

Termination Clause

A provision in a contract that outlines the conditions under which the agreement may be terminated by either party before the end of the term. Termination clauses may specify grounds for termination, such as breach of contract, non-performance, or mutual agreement, and may include notice requirements and other procedures for ending the relationship.

Grant of Rights

A section of a music industry contract that specifies the rights being granted by the artist, songwriter, or other copyright holder to the record label, publisher, or other party. Grant of rights provisions may include exclusive or non-exclusive rights to reproduce, distribute, perform, or otherwise exploit the copyrighted works, as well as the duration and territory of these rights.

Territory

The geographic area in which a record label, publisher, or other party is granted the rights to exploit an artist’s music under a contractual agreement. Territories can be defined broadly (e.g., worldwide) or more narrowly (e.g., specific countries or regions) and may impact the scope of distribution, promotion, and other activities related to the artist’s music.

Indemnification

A clause in a contract that requires one party (typically the artist or songwriter) to protect and compensate the other party (typically the record label or publisher) against any losses, damages, or legal claims that may arise from the artist’s actions, representations, or breach of contractual obligations. Indemnification provisions help to allocate risk and responsibility between the parties in a music industry contract.

Warranty

A statement or assurance provided by one party in a contract (typically the artist or songwriter) that certain conditions or facts are true, such as the originality of the work, the ownership of the copyrights, or the absence of legal claims or encumbrances. Warranties serve to protect the receiving party (typically the record label or publisher) from potential liabilities or disputes that may arise if the warranted conditions are found to be untrue.

Mediation

A method of alternative dispute resolution in which the parties involved in a contract dispute work with a neutral third party (the mediator) to facilitate communication and negotiation, with the goal of reaching a mutually acceptable resolution. Mediation is often included as a contractual provision for resolving disputes before resorting to litigation or arbitration.

Arbitration

A method of alternative dispute resolution in which the parties involved in a contract dispute submit their case to a neutral third party (the arbitrator) who reviews the evidence, listens to the arguments, and renders a binding decision. Arbitration is often included as a contractual provision for resolving disputes as an alternative to litigation, as it can be more efficient, private, and cost-effective.

Confidentiality

A provision in a contract that requires the parties to keep certain information, such as financial terms, proprietary knowledge, or trade secrets, confidential and not to disclose it to third parties. Confidentiality clauses are commonly used in music industry contracts to protect sensitive business information and maintain privacy in the artist’s and label’s or publisher’s relationship.

Non-Disclosure Agreement (NDA)

A Non-Disclosure Agreement (NDA), also known as a confidentiality agreement, is a legally binding contract in which one or more parties agree not to disclose confidential information that they have shared with each other as a necessary part of doing business together. NDAs are commonly used in many business settings, as they offer a mechanism by which information (like trade secrets, proprietary systems, and client insights) can be shared, but still protected.

Non-Disclosure Agreement (NDA) for Video Production

Force Majeure

A clause in a contract that allows the parties to suspend or terminate their obligations in the event of unforeseen circumstances or events beyond their control, such as natural disasters, war, terrorism, or labor strikes. Force majeure provisions help to protect the parties from liability and potential losses resulting from circumstances that are not their fault.

Assignment

A provision in a contract that allows one party (typically the record label or publisher) to transfer their rights and obligations under the agreement to another party, such as a subsidiary, affiliate, or successor company. Assignment clauses can impact the artist’s or songwriter’s relationship with the original contracting party, as well as their ability to negotiate new terms or exit the agreement if the contract is assigned to a different entity.

Non-Compete Clause

A contractual provision that prohibits an artist, songwriter, or producer from engaging in certain activities or entering into agreements with competitors during the term of the contract and, in some cases, for a specified period after the contract ends. Non-compete clauses are used to protect the record label’s or publisher’s investment in the artist and to prevent conflicts of interest that could undermine the parties’ relationship.

Cross-Collateralization

A provision in a contract that allows a record label or publisher to apply an artist’s or songwriter’s royalties from one project to recoup the costs and advances from another project, even if the projects are unrelated or released under separate agreements. Cross-collateralization can impact an artist’s ability to earn income from their music, as it may take longer to recoup multiple projects before royalties are paid out.

360 Deal

A type of music industry contract in which a record label or other party receives a percentage of an artist’s income from multiple revenue streams, including record sales, touring, merchandise, and endorsements, in addition to their traditional royalty payments. 360 deals are designed to provide the label with a more comprehensive return on their investment in the artist, while potentially offering the artist additional resources and support across various aspects of their career.

Co-Publishing Agreement

A contract between a songwriter and a music publisher in which both parties share ownership of the copyright in the songwriter’s musical compositions. Under a co-publishing agreement, the publisher typically administers the copyrights, licenses the songs for various uses, and collects and distributes royalties, while the songwriter retains a percentage of the copyright ownership and royalty income.

First Right of Refusal

A contractual provision that grants one party (typically a record label, publisher, or producer) the right to be the first to review and potentially acquire or license new works, products, or services offered by the other party (typically the artist or songwriter) before they are offered to other parties. First right of refusal clauses help to maintain a business relationship between the parties and ensure that the contracting party has priority access to the artist’s future output.

Controlled Composition Clause

A provision in a recording contract that limits the royalty rate paid by a record label to an artist or songwriter for the mechanical reproduction of the artist’s own compositions. Controlled composition clauses typically reduce the mechanical royalty rate to a lower percentage of the statutory rate, and may also limit the number of songs or compositions that qualify for mechanical royalties. This provision can significantly impact an artist’s or songwriter’s income from the sale or distribution of their music.

Reserves

A contractual provision that allows a record label or distributor to withhold a percentage of an artist’s royalties to cover potential future returns, discounts, or other adjustments related to the sale or distribution of their music. Reserves are typically held for a specified period and are then released or applied to the artist’s account, subject to the actual sales and adjustments experienced by the label or distributor.

Most Favored Nations (MFN)

A clause in a contract that ensures that one party (typically the artist, songwriter, or producer) receives the same or better terms, conditions, or compensation as any other party in a similar position or capacity. Most favored nations clauses are used to maintain a level playing field and prevent preferential treatment or disparity among artists or other parties involved in a project or agreement.

Creative Control

A contractual provision that defines the extent to which an artist has the authority to make decisions about the artistic direction, production, and presentation of their music, including song selection, production style, album artwork, and marketing materials. Creative control clauses can vary, with some artists retaining full creative control while others may be required to collaborate with or defer to the record label, producer, or other parties involved in the project.

Net Receipts

The portion of income or revenue that remains after all deductions, expenses, and costs have been subtracted. In a music industry contract, net receipts clauses outline how income from various sources, such as record sales, licensing, or merchandise, will be divided between the parties after accounting for costs, fees, and other expenses.

Marketing Commitment

A provision in a recording or distribution contract that specifies the amount of money a record label or distributor agrees to spend on promoting and marketing an artist’s music. Marketing commitments can include advertising, public relations, radio promotion, and other activities aimed at increasing the artist’s visibility and generating sales or streams. These commitments may be subject to negotiation and can impact an artist’s overall success and career trajectory.

Delivery

A requirement in a music industry contract that specifies the format, quantity, and deadline for the submission of completed works, such as recordings, compositions, or other materials, by the artist, songwriter, or producer. Delivery clauses ensure that the parties meet their obligations under the agreement and provide a basis for recoupment, royalty payments, or other compensation tied to the successful completion of the project.

Pay or Play

A clause in a contract that requires a party (typically a record label, publisher, or producer) to either fulfill their obligations under the agreement, such as releasing an album or producing a certain number of songs, or to pay a specified amount of compensation to the other party (typically the artist or songwriter) if the obligations are not met. Pay or play provisions help to protect the artist’s interests and ensure they are compensated for their work, even if the project does not proceed as planned.

Reversion

A contractual provision that allows for the return of certain rights, such as copyright ownership or control, to the artist, songwriter, or another copyright holder after a specified period, event, or condition. Reversion clauses can be important for artists and songwriters seeking to regain control of their creative works, particularly if the original contract terms were unfavorable or if the work has gained value over time.

No Oral Modification

A clause in a contract that stipulates that any changes or modifications to the agreement must be made in writing and signed by both parties, and that oral agreements or understandings are not enforceable. No oral modification clauses help to maintain clarity and consistency in the contractual relationship and prevent disputes based on misunderstandings or informal negotiations.

Master Recording

The original or final version of a recorded song or performance, from which all subsequent copies, reproductions, or derivatives are made. In a music industry contract, the ownership and control of the master recording may be granted to the artist, the record label, the producer, or another party, depending on the terms of the agreement.

Sync License

A contractual agreement that grants a party (such as a film or television producer, advertiser, or video game developer) the right to use a specific song or recording in synchronization with visual media, such as a movie, television show, advertisement, or video game. Sync licenses typically involve the payment of a fee to the copyright holders of the musical composition and the sound recording, as well as a negotiation of the terms and conditions governing the use and exploitation of the music.

Mechanical License

A contractual agreement that grants a party (such as a record label, distributor, or streaming service) the right to reproduce and distribute a specific musical composition in the form of a physical or digital recording. Mechanical licenses typically involve the payment of a royalty to the copyright holder of the composition, based on a statutory or negotiated rate per unit sold or streamed.

Performance Rights Organization (PRO)

A company or organization that collects and distributes royalties on behalf of songwriters, composers, and music publishers for the public performance or broadcast of their musical works. PROs, such as ASCAP, BMI, and SESAC in the United States, monitor radio, television, live performances, and other sources to track the usage of their members’ music and ensure they are compensated for their work.

Digital Rights Management (DRM)

A system of technology, policies, and measures used by copyright holders, record labels, and digital content providers to control the access, copying, distribution, and sharing of copyrighted works, such as music, films, and software. DRM can be included in a music industry contract as a means of protecting the parties’ intellectual property rights and preventing unauthorized use or infringement.

Clearing Samples

The process of obtaining permission from the copyright holders of a previously recorded song or sound recording to use a portion or sample of the work in a new recording or composition. Clearing samples typically involves negotiating a license or agreement with the copyright holders and may require the payment of a fee, the granting of a share of the new work’s royalties, or other forms of compensation or acknowledgment.

Split Sheet

A document that outlines the ownership shares and royalty percentages for each contributor to a musical composition, such as songwriters, producers, and featured artists. Split sheets are used to establish and document the parties’ rights and interests in the work, and may be required by music publishers, performance rights organizations, or other entities involved in the administration and exploitation of the music.

Neighboring Rights

A set of rights related to the public performance and broadcast of sound recordings, as distinct from the rights associated with the underlying musical compositions. Neighboring rights are typically administered by collecting societies or organizations, such as SoundExchange in the United States, and provide royalties to the performers and producers of the recordings, as well as the record labels that own or control the master recordings.

Work For Hire

A contractual provision in which a creative work, such as a song, recording, or design, is considered to be legally owned and controlled by the party that commissioned or paid for the work, rather than the individual creator or artist. Work for hire agreements are commonly used in the music industry for producers, session musicians, and other collaborators, and may impact the artist’s or creator’s ability to retain copyrights, royalties, or other benefits associated with the work.

Collective Bargaining Agreement (CBA)

A contract negotiated between a labor union representing a group of workers, such as musicians, performers, or technical staff, and their employers, such as a record label, live event promoter, or production company. Collective bargaining agreements typically establish terms and conditions of employment, such as wages, hours, benefits, and working conditions, as well as procedures for resolving disputes and grievances.

Notice of Termination

A formal, written notification from one party to another that they intend to terminate a contract, agreement, or other legal relationship, as provided for by the terms and conditions of the contract. Notice of termination may be required to be delivered in a specific format, within a certain time frame, or accompanied by certain documentation, depending on the nature of the agreement and the grounds for termination.

Music Licensing Collective (MLC)

A designated organization responsible for administering the mechanical licensing, royalty collection, and distribution activities for digital audio streaming and other uses of musical compositions in a specific territory or jurisdiction. The MLC serves as a centralized point of contact for streaming services, music publishers, songwriters, and other stakeholders to ensure that the appropriate licenses are in place and that royalties are accurately collected and distributed to the rightful copyright owners.

Digital Millennium Copyright Act (DMCA)

A U.S. federal law that strengthens the penalties for copyright infringement, establishes specific safe harbors for internet service providers (ISPs) and other online intermediaries and implements certain provisions of international treaties related to copyright protection and enforcement. The DMCA impacts the music industry by providing copyright holders with additional tools and remedies to address online piracy, as well as establishing rules and procedures for the takedown of infringing materials and the liability of ISPs and other third parties.

Common music industry terms

A&R (Artists and Repertoire)

A&R refers to the division of a record label that is responsible for talent scouting, artist development, and overseeing the creative process of recording music. A&R representatives help musicians with song selection, production, and career guidance.

Advance

An advance is an upfront payment given to an artist or songwriter by a record label or publisher. It is usually recouped from future royalties earned by the artist.

Album

A collection of recorded music tracks, typically released together by an artist or a band, often sharing a common theme or sound. Albums can be released in various formats such as vinyl, CD, or digital download.

ASCAP (American Society of Composers, Authors, and Publishers)

A performing rights organization (PRO) in the United States that collects royalties on behalf of its songwriter, composer, and publisher members for the public performance of their copyrighted musical works.

BMI (Broadcast Music, Inc.)

Another major performing rights organization in the United States that represents songwriters, composers, and music publishers, collecting and distributing royalties for the public performance of their copyrighted works.

Copyright

The legal protection granted to creators of original works, including music, lyrics, and sound recordings. Copyright owners have the exclusive right to reproduce, distribute, perform, and create derivative works based on their original creations.

Demo

A demonstration recording of a song or collection of songs, usually produced in a simple, inexpensive manner, intended to showcase an artist’s talent or a specific song to potential producers, labels, or other music industry professionals.

EP (Extended Play)

A shorter release than a full-length album, typically containing 3-5 songs. EPs are often used by artists to showcase their work in between full-length album releases or to experiment with new styles and sounds.

Indie (Independent) Label

A record label that operates independently of the major record labels, often specializing in specific genres or focusing on regional or niche markets. Independent labels can be more flexible and artist-friendly than major labels, often allowing greater creative control for the artists they sign.

Major Label

A large, multinational corporation that dominates the music industry through its market share and distribution network. Major labels typically have the resources to sign, promote, and distribute a wide range of artists and genres. The three major labels are Universal Music Group, Sony Music Entertainment, and Warner Music Group.

Mechanical Royalties

Royalties paid to songwriters and publishers for the reproduction and distribution of their copyrighted musical works in physical formats (such as CDs or vinyl) and digital downloads.

See a typical mechanical license agreement.

Performance Royalties

Royalties paid to songwriters, composers, and publishers when their music is publicly performed, either live or through broadcast media such as radio, television, or streaming services.

Publishing

The business of managing the copyrights and licensing of musical compositions, separate from the actual sound recordings. Music publishers work with songwriters to exploit and monetize their works through synchronization, mechanical, and performance royalties.

Contracts for Music Publishers.

Record Label

A company that discovers, signs, promotes, and distributes recorded music by artists. Labels are responsible for the production, manufacturing, distribution, and marketing of an artist’s music, as well as for negotiating contracts and collecting royalties on behalf of the artist.

See contracts for record labels here.

Recording Contract

A legal agreement between a recording artist and a record label, outlining the terms and conditions under which the artist will create and release music. This includes the division of royalties, the length of the contract, and the artist’s obligations to the label.

See our Recording Contract here.

Royalties

Payments made to artists, songwriters, composers, and other copyright holders for the use of their music, based on various licensing agreements and revenue streams. Royalties can be derived from mechanical, performance, and synchronization licensing, as well as from sales, streaming, and other forms of distribution.

SESAC (Society of European Stage Authors and Composers)

A performing rights organization that represents songwriters, composers, and music publishers in the United States, collecting and distributing royalties for the public performance of their copyrighted works. SESAC is smaller than ASCAP and BMI but operates similarly.

Single

A standalone song released by an artist, often to promote an upcoming album or to generate interest in the artist’s work. Singles are typically accompanied by a music video and are often released to radio stations for airplay.

Sync (Synchronization) License

A license that grants the rights to use a musical composition in synchronization with visual media, such as films, television shows, commercials, or video games. Sync licenses are negotiated between the copyright holder (usually the songwriter or music publisher) and the producer of the visual media.

See sync license agreement.

Touring

The act of performing live concerts in various cities or countries as a means of promoting an artist’s music and generating income. Tours can range from small, intimate club shows to large-scale stadium concerts, and often involve a significant amount of planning, logistics, and financial investment.

See touring agreements here.

Master Rights

The ownership and control of the actual sound recordings of a musical work, separate from the underlying composition. Master rights are typically held by the record label or, in some cases, by the recording artist.

SoundExchange

A non-profit organization in the United States that collects and distributes digital performance royalties on behalf of recording artists and sound recording copyright owners for the use of their music on satellite radio, internet radio, and other digital platforms.

DIY (Do-It-Yourself)

An approach to creating, promoting, and distributing music without the involvement of traditional record labels or music industry intermediaries. DIY artists typically rely on self-funding, grassroots marketing, and digital distribution to build their careers independently.

Streaming Platforms

Online services that provide access to a vast library of music for users to listen to on-demand, such as Spotify, Apple Music, Amazon Music, and Tidal. These platforms have become a significant source of revenue for artists and labels through streaming royalties.

Actors within the music industry

Artists

An individual or group who creates, performs, and often records music. They may write their own songs or perform those written by others. Their work is typically distributed and promoted through various platforms, and they often perform live at concerts or events. This career also often involves collaboration with other industry professionals such as record producers, managers, and music labels.

See contracts for Artists here.

Music Producer

An individual who oversees the creative and technical aspects of recording music, working closely with artists to shape the sound and direction of a song or album. Producers may also contribute as songwriters, musicians, or engineers, depending on their skill set and the project’s requirements.

See contracts for music producers here.

Sound Engineer

A professional who works with audio equipment to capture, manipulate, and balance the sound of a recording or live performance. Sound engineers can specialize in various areas, such as recording, mixing, mastering, or live sound reinforcement.

Mix Engineer

A specialist in the process of blending and balancing individual recorded tracks to create a cohesive, polished, and professional-sounding final mix. Mix engineers use a variety of tools and techniques to shape the sound, dynamics, and spatial relationships of the various elements within a song.

Mastering Engineer

An expert who applies the final sonic adjustments and enhancements to a completed mix, preparing it for distribution across various formats and platforms. Mastering engineers ensure that the music sounds consistent and optimized for playback on different devices and systems.

Booking Agent

A professional who secures live performance opportunities for artists, negotiating contracts, fees, and logistics with venues and event promoters. Booking agents play a crucial role in an artist’s touring strategy, helping to build their fan base and generate income from live shows.

See contracts for Booking Agents here.

Music Manager

An individual who oversees and guides an artist’s career, acting as a liaison between the artist and various industry professionals. Managers handle various aspects of an artist’s business, including contract negotiations, marketing, financial planning, and day-to-day logistics.

See contracts for Music Managers here.

Music Distributor

A company or service that delivers an artist’s music to retail stores, digital platforms, and other outlets, ensuring that the music is available to consumers for purchase or streaming. Distributors can be physical, digital, or both and may also provide additional services such as marketing and promotion.

Playlist Curator

An individual or team responsible for creating and maintaining playlists on streaming platforms, selecting and organizing tracks based on genre, mood, theme, or other criteria. Playlist curators can influence the visibility and success of a song or artist on streaming platforms, as being featured on popular playlists can significantly increase streams and exposure.

Music Supervisor

A professional who selects and licenses music for use in film, television, advertising, video games, and other visual media. Music supervisors work closely with producers, directors, and music publishers to find the perfect songs to enhance the visual content and create an emotional connection with the audience.

Music PR (Public Relations)

The practice of promoting and maintaining an artist’s public image, generating positive media coverage, and creating a strong brand identity. Music PR professionals work with artists, labels, and other industry stakeholders to develop and execute publicity campaigns, secure interviews, reviews, and other media placements, and manage an artist’s online presence and reputation.

Music Publisher

A business that managing the copyrights and licensing of musical compositions, separate from the actual sound recordings. Music publishers work with songwriters to exploit and monetize their works through synchronization, mechanical, and performance royalties.

See Music Publishing Contracts here.