Music Business Essay Summary Example For Students

Music Business Essay Summary Music Business Exam Number OneQuestion 1. The music publishing industry at a glance would seem to be those who print sheet music, method books, lead sheets, and all of the texts or notated music that musicians (and those aspiring to be musicians) use. Years ago, this was what most music publishers did, but as the industry has evolved the process that become much more complex. Music is not just ink and paper, intellectual material and property to the individual who writes it. Therefore the song does not become â€Å"a song† when it is written down. This is not an easy concept to grasp because the song by itself has no physical makeup. A song could exist once it is played for the first time, and songs can even exist inside the mind of a songwriter. This concept is why the publishing business can be so complex; we are dealing with intellectual property. The heart of the music publishing business lies in the rights to the original music. After the music is successful enough to financially support itself the music is printed in mass quantities in a variety of ways. This could be everything from guitar tabs to choral arrangements for a junior high choir. The publisher’s main source of income is through record royalties, performance royalties received from companies like the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music Incorporated (BMI), and the Society of European Stage Authors and Composers (SESAC) for performances of music copyrighted by the publisher. These royalties could be from many different types of performances but most are though radio and songs on television. The success of a songwriter lies in the greatly in the hands of his/her publisher. Normally we hear of a band’s success when they are â€Å"signed† with a record deal, but most record companies not only produce and promote an album, they also act as the publisher who, when contracted, owns the rights to the music. When a publisher own the song it is put in to their catalog. Merchandise retailers have catalogs of their goods just like publishers have a catalog of songs that they own rights to. Publishing firms such as Warner/Chappell, BMG Music, MCA Music, and Sony music have catalogs of many styles of music. These companies are referred to as â€Å"full-line companies.† A broad repertoire allows them to market their music to many audiences. Most of these full-line company’s roots can be traced back to the music of Hollywood and the show music of Broadway. Publishers today may have thousands of songwriters in its catalog including all styles of music from around the globe. Representative Warner/Chappell owns, administers, or sub-publishes more that a million copyrights here and abroad. Today’s full-line publishers have many different divisions to their company. Large publishers handle virtually every aspect of a writer’s music, it’s recordings, distribution, sales, promotion, advertising, touring, and legal affairs. This figure lays out all the divisions a full-line publisher may have. The administration division is the division that handles the operations of the firm. All business affairs go through administration. When money is received from or paid to customers the firm the accounting divisions keeps all the financial records of these kinds of operations. The accounting division also would handle loans given to artist that are signed to the firm under the publisher’s record label. When a band records an album under a label they become a liability to the label because money has to be spent to record, produce and promote a artists music. Full-line publisher’s front this money and all profits from the artist come back and are split 50-50 with the publisher and the writer. If the artist maintains the rights to their songs the record contract will include a controlled composition clause that calls for a reduced mechanical royalty paid to the artist by the record label. This clause may reduce the royalty split to 75-25, the larger portion going to the re cord label. This clause would not be insisted to artists who place the full rights to works in the hands of the record company’s publisher. The artist remains a liability to the publisher as long as the artist has not made as much money as was invested into them by the publisher. An accountant usually handles the royalty department, which is money received from performances of the copyrighted music. This financial person will also handle normal operations such as payroll, accounts payable/receivable, insurance, purchasing and other financial operations. The copyright department may have one or more people in this division. This department is responsible for a number of tasks. Some of these important tasks are to:1. Conduct a title search. The copyright department first determines who owns the work. Just because an artist claims to have written a song does not give him rights to it. This may be a complicated process, which is why many publishers stay away from music that is se nt blindly to them for review. Legal disputes between the publisher and the writer could result and end up in court, which can be a long and costly process. Other issues that add to the complication are co-authors to the music, previous publishers, revision to music or lyrics, and many more. When the copyright department has performed this research, a copyright attorney can answer remaining questions. Depending on the demand of this type of attorney to the firm, the firm may hire one full time for these affairs. 2. Registering claims of copyright. This is done to make the copyright official, which may cost about twenty dollars for a song. 3. Handle the mechanical, and synchronization licenses of the music. Mechanical licenses are issued to artists for the recording of a copyrighted work. Synchronization licenses are issued for the use of copyrighted works in firms. This may be done through the Harry Fox agency, or may be handled through the copyright department. 4. Keeping current records of all copyrights owned by the publisher. This includes the renewal, extensions, sales, or abandonment of existing copyrights. Copyrights do have a time limit, so the need to watch where they stand in time is important to the life of the work. There may be a specific department for business affairs that deal with the legal operations of the firm. The publisher may have staffed lawyers and attorneys in this department that study the copyright laws and take legal action for the breaking of copyright laws, or the negotiating of new laws. If the publisher does not have the demand for a full time lawyer or attorney, they may be hired from outside firms. The acquisitions division is responsible for contracting writers and purchasing other catalogs. A representative from the publisher may travel the country to find artists that would bring more business to the firm. Like â€Å"scouts† this person is in charge of artists and repertoire (A R). The A R representative may attend a major event by an artist to see them perform and evaluate whether they would be profitable for the firm. Remember that the publisher splits all profits 50-50; millions of dollars may be at stake at the success of one artist. The acquisitions department is responsible for the purchasing of catalogs of smaller firms. This makes the music publishing industry and oligopoly; an industry controlled by a few large firms. The print publishing division is responsible for task such as editing, engraving, artwork, copying, and the printing of its catalogs music. The signed artists may meet with the editors, and arrangers in this department to prepare the music for printing in a number of different ways. The music would simply be transcribed to a lead sheet, or an entire album could be published in a book with all the chords and guitar tabs for aspiring musicians to purchase. After the music is printed it is then distributed. The promotion division is often the largest of all the divisions in a full-line publishing company. The success of a work is held in the hand of the promotion of the artist and their music. Even artists that do not have outstanding talent or abilities, but have excellent promotion will have more fame than the talented unadvertised artist. The people incharge of these artists success are the producers, managers, and musical directors for not only the records they produce but also the performances they give. Producers in the recording studio deal with the quality of the music and how it sounds the its audience. The musical director may also be present to make decisions about the arranging of music during the recording project. The artist’s manager is responsible for the personal well being of the artist. The other departments involved in promotion are responsible for print ads, store displays for the album, direct mail to retailers and fans, and any other special events. After all the acquisions, administration, print production, and promotion divisions have performed their responsibilities, the distribution division takes control and begins to put this intellectual, funded, copyrighted, recorded, printed, promoted music into the hands of consumers. The distribution and sales division distributes the CD’s, tapes, sheet music, T-shirts, and other merchandise to wholesalers and retailers of the products. These vendors buy in large quantities at wholesale prices. Another distributor of sheet music known as a rack jobber deals with small quantities of music usually less that one hundred at a time. Other distribution may be done through direct mail, catalog and online sales. The final division of the full-line publisher is the subpublishers and licenses. Most publishers will contact different tasks to other publishers who may specialize in print or other services necessary to the artist but not provided by the primary publisher. The most common ser vice performed by subpublishers is printing. Companies like Hal Leonard, Inc. and Warner/Chappell are two of the largest print publishers. In these kind of contracts the printer acts as the licensee and bare the full cost of printing and distributing while the licensee pays the licensor a royalty on sales of up to twenty percent of the wholesale cost. In this situation the licensee acts as selling agent. Individual Retirement Accounts: Why Bother? EssayIn this subject we also include the fair use of copyrighted material. The law gives guidelines to what is considered fair use for this material. The act list the criteria for a fair use that includes:1. The purpose or character of the use, including whether such uses is of a commercial nature or is for nonprofit educational purposes. 2. The nature of the copyrighted work3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole4. The effect of the use on the potential market for or value of the copyrighted workThere are exceptions to certain performances that are included in the fair use portion of the act. (1) The performance or display of a work by instructors or pupils in the course of face-to-face teaching activities of a nonprofit educational institution. (2) Performance of a nondramatic literary or musical work, display of work, by or in the course of transmission. These two uses allow students to study music for more that a hobby, but for a preparation for their careers upon graduation. This is a great resource for colleges to be able to teach and perform music and art for free as a fair use. Question 4. In the music industry there are three organizations that dominate the performance rights collection. These organizations are responsible for collecting royalties from clubs, concert halls, stadiums, bars, colleges, airlines, or any business or group that uses music to promote business for themselves. The money collected from these businesses is dispersed to publishing companies that split the profits with the songwriter. These performance rights organizations will take legal action against the venues that do not purchase the appropriate licenses for the uses of the copyrighted music. Some examples of licenses include mechanical, performance, special uses, synchronization and grand rights. The first performance rights organization established in 1914 is the American Society of Composers, Authors, and Publishers (ASCAP). ASCAP’s income is derived from the following places in the music industry:1. 20% to 25% from reciprocating foreign licensing organizations. 2. About half from television stations and networks3. Radio generates about 25%4. Annual fees are figured on a small percentage of the adjusted gross incomeMembership of ASCAP is comprised mostly of composers and lyricists of Broadway shows, movie musicals, and pop songs. To become a member of ASCAP you must have at least one song commercially recorded, available on rental, or performed in media licensed by the society. ASCAP has a board of twelve writers and twelve publishers. In weighting performances ASCAP takes into account the following: 1. The medium in which the performance takes place2. The weight of the station on which the performance is carried3. The weight of a television network4. The type of performanceThe organization pays its members on the basis of census and sample surveys of performances. These are usually done at random at places that have commercial airplay. The data is then figured on an average and royalties are paid based on the average. Broadcast Music Inc. is set up different from ASCAP in its financial structure. BMI is owned by stockholders. It’s board of directors consists of those who own shares in the company; several hundred people. The affiliates of BMI are songwriters from genres including jazz, rhythm and blues, country, rock, gospel and much more. Unlike ASCAP, BMI has no members, but has writer and publisher affiliates. BMI accepts those who have written a musical composition and have recorded or performed the work commercially. BMI pays higher for songs that originate in a Broadway show or feature film. As the song is play or performed more the copyright owners receive bonus payments of up to four times the minimum rate. BMI has many foreign writers and publishers in Europe and relays on income from overseas greatly. BMI does withhold 3.6% for servicing foreign accounts. BMI deals with most licenses, as does ASCAP. The Society of European Stage Authors and Composers (SESAC) is the third of the pe rformance rights organizations. SESAC is the smallest of the three organizations. They believe that by being a smaller organization they can meet the needs of their writers and publishers better then the bigger organizations. The other side to this is that it is much more costly to the copyright owner to join with SESAC. SESAC is the technological leader among these organizations. They have a state-of -the-art tracking system which allows them to accurately track the performance and recording of works by its owners. SESAC uses a chart payment system, which makes royalty payments based on chart positions in major trade publications. Unlike ASCAP they do not have a weighing system. The success of the song is based on how high up on the chart it is. ASCAP and BMI operate under court consent decrees; SESAC does not. Each of these organizations has their own strength, and all three are important to the industry. Question 5. Working musicians can become members of unions and guilds that are respected around the nation. There are many benefits to being apart of these organizations. At a glance one may not like the idea of paying yearly dues to a group of musicians, but the benefits can be immeasurable in the right parts of the country. The American Federation of Musicians (AFM) is a trade union. It is the oldest union in the United States representing musicians that are active in their professional career. Over the year this union has seen decease in numbers because of difficulty in attracting new young members and state and national laws restricting certain kinds of collective bargaining. The union dues can range from one to five percent of union scale wages earned by its members. These dues are used to finance activities all over the nation and locally. The Union provides these musicians with the proper treatment and paid work. Most symphonies are made up from union players. Other organizations include the American Guile of Variety Artists. The AGVA represents singers, dancers, comedians, ice skaters, jugglers, magicians, and others who perform live. The AGVA provides membership to all types of performers from the struggling to the world-famous. The AGVA will negotiate with the venues of its performers. The Screen Actors Guild is made up for actors, singers and even on-screen instrumentalists. All of these organizations are very specific to its members and who can join. A musician may have to be a part several unions or guilds to get the attention he need to succeed. Some of the benefits to being a part of a musicians union are laid out in a â€Å"Bill of Rights† fashion including how union musicians are to be paid:1. The right to enjoy a minimum wage, whether derived from live performance, royalties, or reuse, that is sufficient to provide a standard of support proportional to the entire investment of time and resources required to secure and perform said gainful employment. 2. The right to safe and healthy working conditions including protection from health threatening theatrical devices, demeaning and exploitive costumes or uniforms, excessive sound pressure levels, substandard travel arrangements, ingestion of second hand tobacco smoke, irrelevant recorded music before performances and during intermissions and the right to reasonable rest periods. 3. The right to equal employment opportunities based on musical qualifications and/or entertainment value regardless of race, ethnic background, age, gender, religion, cultural diversity or political affiliations. 4. The right to negotiate fairly on ones own behalf with universal recognition and legal enforcement of resulting contracts on agreed terms. 5. The right to ownership of all intellectual property rights as applied to compositions, performances, and recordings by all players and singers as well as leaders and publishers who are already protected. Minimum wage from gainful employment must be sufficie nt to pay all necessary costs for life, shelter, and health care in the proportion of 100% for 40 hours weekly invested and directly proportional for fewer hours. This investment of time includes, in addition to hours of actual live performance, those hours spent in practice, rehearsal, preparation, post-production and (when required by the employer) promotion of the event. In absolutely no instance shall this total work investment be compensated for less than federally mandated minimum wages. We can see that union protects and serves the musicians and gives them freedom to pursue their own careers in the performing arts. These organizations create stability for the pursuit of full-time jobs in many different areas of the arts, not only in music but also in the world of theatre and visual arts. Music Essays