What They'll Never Tell You About the Music Business, Third Edition The Complete Guide for Musicians, Songwriters, Producers, Managers, Industry Executives, Attorneys, Investors, and Accountants

by Thall, Peter M.

• ISBN13: 9781607749745
• ISBN10: 1607749742
• Edition: 3rd
• Format: Paperback
• Copyright: 2016-08-23
• Publisher: Watson-Guptill

Summary

The completely revised and expanded edition of What They’ll Never Tell You About the Music Business is a must-have reference. You’ll learn:

-  How many musicians have seized do-it-yourself internet opportunities to create successful business models, 
-  How the royalty pie is sliced—and who gets the pieces, 
-  How the fundamentals of music publishing, producing, managing, touring, and the record industry apply more than ever, 
-  Why this book is the indispensable guide to the worldwide music industry, 
-  How corporate general counsels can educate their employees (and themselves) to understand the strictures of copyright law and to avoid trouble, 
-  And much more.

Author Biography

PETER M. THALL has practiced law for more than 40 years and has represented many of the world’s greatest artists, from The Cars and Barry Manilow to ABBA and Pat Benatar, and such companies as Gucci, EXPRESS, and Victoria’s Secret for their music needs. He is a regular contributor to music journals, International law publications, and a frequent guest on national and international radio and television programsas an expert on the music business.

Table of Contents

Contents
Preface x 
Acknowledgments xiv


1 • Introduction 1
Selecting the Right Attorney 2 
Personal Representation 3 
Deal Makers: Why You Need Them 4 
Deal Blockers: How to Get Past Them 5  
Staying the Course or Calling It Quits 6


2 • Investors  The High Costs of Low Finance  8
The Costs of Being Heard 8 
Of Investors and Investment Agreements 9 
Finding the Money 9 
Internet-Specific Offerings 12 
The Safe Harbor Disclaimer 12
Getting the Right Advice 13
Paying It Back 13 
Overcalls and Conversions 14 
Commissions 15 
Crowdfunding 15 
Should He Who Pays the Piper Call the Tune? 16 
A Backer Who Knows What He’s Doing 16


3 • Advances  Why They Seem a Lot Like Loans (and Vice Versa) 18
A Sad Story and a Happy Story About Advances 19 
 Is One Person’s Money Another Person’s Motivation? 21


4 • Royalties  Some Unvarnished Truths 22
How the Royalty Pie Is Sliced and Who Gets the Pieces 23 
Recording Costs 24  
United States CD Album Royalty Calculation 25 
Payment on Less than 100% of Records Sold 26 
“New” Technology? 26 
“Special” Categories 27
 Two Diabolical Deduction Devices 30
Reducing Mechanical Royalties 31 
 Special Issues Regarding Controlled Compositions 32 
The Beat Goes On: Other Important Deductions 33 
Prepayment of Royalties 36 
The Myth of Royalty Escalations 37 
Free Goods 37 
Lost or Misplaced Royalties 39 
Chipping Away at Post-Term Royalties: Synchronization Licenses 39 
Accountings, Audits, and the Statute of Limitations 40 
How Responsible Should Record Companies Be? 42 
The Effects of Digital Downloading on Pricing and Royalties 43  
360 “Deals” 50 
The Digital Evolution 57


5 • Personal Management  The Whys, Wherefores, and Watch Outs 65
What a Personal Manager Should (and Should Not) Be Expected to Do 66  
Managing the Five Stages of an Artist’s Career 67  
Remakes 70 
KMMA: Keep My Music Available—At All Costs 71 
Choosing Your Manager 74 
The Question of Clout 75 
Paying Your Manager 78 
The Term of the Agreement 82 
Extending or Terminating an Artist-Manager Relationship 83  
Breach of Contract in Artist-Manager Agreements 87


6 • Managing Your Business and Your Financial Future 88
 When “Show Me the Money” Isn’t Enough  89 What a Business Manager Does 90  
Finding the Right Person 90 
Certified Public Accountants 90  
Auditing the Auditor 92 
What Kind of Business Is Being Managed? 92  
Should You “Do Business as” or Form a Partnership? 93 
Money Means Options: Resisting the “Keep ’Em Poor” Philosophy 98 
Managing Your Money 99 
Investing: Is Anyone in Charge Here? 100 
Making It and Saving It 103


7 • When Your Job Is More than a Gig Employment Agreements and Disagreements  108
Term of Employment 108 
 Duties 108 
 Reporting Lines 109  
Confidentiality and Competition 110  
Stock Options 112  
Perks 113 
Termination 114 
Working in a Foreign Land 117  
Relocation and Re-Relocation 118 
Visas 118 
Disability and Death 118  
Provisions That Survive Termination 119  
Vacations 119  
Release and Settlement 120 
Employment Issues Specific to the Music Industry 120 
Variations of Royalty Calculations 122 
Employment Agreements with Celebrities and Others Otherwise Engaged 125  
Mail 126 
The Ownership of Ideas 127


8 • Record Producers  Are They as Sharp as Their Points?       128
How 25% Can Equal 100% 128  
Cross-Collateralization: It Does Not Apply to the Producer 130  
Producers’ Royalty Provisions: The Basics 131 
The Producer as Author of the Sound Recording 138 
Producers and Neighboring Rights 138


9 • Getting Your Record Heard A Practical Guide to Marketing and Promotion  141
Marketing Tools 141  
The Goal-Oriented Campaign 143 
The Record Contract 145 
Do Record Companies Know What They Are Doing? 149
 Victim or Victor? 149
Television Campaigns 150
Radio Promotion 151
Airplay and Payola 152
The Same Old Song (Only the Coda Is New) 156  
The Beginning of the End? 157 
A Brief Look at the Promotional Picture—from the Artist’s Point of View 159


10 • Touring Concerns  Trials and Tribulations    161
The Club Tour 162 
The Grand Tour 163 
Sample Tour Budget 164 
Private Charter 172 
Elements of Touring Agreements: Commonalities and Idiosynchrasies 177


11 • Merchandising  Your Band, Your Brand 181
Tour Merchandising 181 
Retail Merchandising/Web Merchandising 189 
Confidentiality 193 
Compliance with Local Laws 194 
End-of-Term Inventory and Sell-Off 194 
Artwork and Photographs 195 
Coupling 195 
Life and Disability Insurance 196 
Piracy 196 
Audits 197


12 • Audits Truth or Consequences   198
Examining the Audit 198 
The Flow of Money 201 
Access to Registration
Information 202 
The Black Box or “Something Is Abyss Here” 202 
Television Campaigns 203 
Interest Charges 203
 Statutes of Limitations 204  
Conducting Audits in Foreign Countries 205 
A Few Practical Suggestions 206 
The Right to Audit: A Contract Issue 208


13 • Music Publishing  The Odyssey of the Song   210
What Is a Music Publisher—and What Does It Publish? 210  
Copyright: A Bundle of Intangibles 212  
Financial Secrets and Realities 215 
 Mechanical Royalty Rates Outside of the United States 219 
Top Gun—a Top Buyout for Paramount 219 
The Administrating Function 221  
Family Ties (Too Close to Sue) 222 
When Your Publisher Forgets You 223 
Foreign Taxes 224 
At-Source Versus Receipts Deals 225 
The Black Box Revisited 226 
Copyright Reversions 227


14 • When Rodgers Meets Hammerstein Determining Songwriter Credits   229
Cowriting Agreements 229 
Cowriters Who Are Band Members 231


15 • Being Your Own Music Publishing Company  Pros and Cons  234
Self-Publishing 234 
Getting in Touch with the Copyright Office 235 
Why Bother Doing It Yourself? 239 
Acquiring Copyrights 239 
Reversion of Copyrights 240
The Value of the Copyright 241 
The Impact of Administrating Costs on True
Earnings 243 
The Cost of Giving Away a “Piece” of the Publishing 243


16 • Internet Entrepreneurship  Doing It Yourself    245
Competing with the Big Boys 245 
Artist, Songwriter, Performer—and E-Commerce
Expert? 246 
Making a Living 247 
Stealing and Protecting Against It 248 
Dos and Don’ts of Internet Entrepreneurship 248 
Manufacturing and Distribution 250
Kickstarting Your Career 251 
Podcasting 252 
Instantaneous Dissemination of Live Performances 253 
Creating a Website 253 
Which People Should Do It Themselves? 254 
A Word of Warning—and Encouragement 255


17 • Lost, Misplaced, Neglected, and Abandoned Royalty Opportunities You Were Never Told About  257 An Introduction to Neighboring Rights 257 
Broadcast Mechanicals 259 
Neighboring Rights in Our Own Backyard: Canada 259 
Lost, Misplaced, Neglected, or Abandoned: Which Category Are Your Royalties In? 260 
Show Me the Money 263
Two Neighboring Rights–Friendly Countries: The UK and the Netherlands 263
Neighboring Rights Collections Agencies 264 
Performing and Other Obscure Rights in Sound Recordings 266


18 • Urban Music  The Beat Goes On    269
Roots 269 
The Milieu 270 
Urban Music: The Producer’s Cosmos 271 
 Different Strokes for Hip-Hop Folks 271 
Rap as Protest 274 
The Importance of the Mix: Mixtapes 274 
Career Ceilings 275  
Hip-Hop and Pop Culture 275  
Business Management and the Management of Business 275 
The Changing Image 276
Contractual Issues 277 
The Rap Coalition: Self-Help Exemplified 278 
Hip-Hop Rules 279


19 • Classical Music  Dead or Alive?     281
A Little History 281 
Demise or Rejuvenation? 282 
The Metropolitan Opera 286 
An Essential for Success: Spirituality 287 
New Life for an Old Genre 289 
The CD Arrives: Both a Blessing and a Curse 289 
The Internet: Is It the Answer? 290
The Role of Record Companies 292 
The Composer-Artist: Special Considerations 296 
Classical Composers and their Publishers: Some Pitfalls and Some Options 297 
Classical Management 301 
Presenting the Singer 304 
Music Education 305


20 • Termination of Grants of Copyrights For Every End, a Beginning       308
Basic Term of Protection 308 
“K-K-K-Katy” 309 
Termination of Grants 309
Duration of Copyright: Subsisting Copyrights 309 
Who Can Terminate 310 
The Control of Termination Decisions 310 
The Rights Granted 310 
The Windows for Termination 311 
When Automatic Renewal Applies 312 
The Sonny Bono Term Extension Act 312 
Keeping Records 312 
The Technical Requirements for Termination 313


21 • Compliance With Copyright Laws Hints for the Corporate Counsel   317 Intangible Rights and the Internet 317 
Licensing From Music Publishers and Sound Recording Owners 318 
Copyright Provisions Applicable to the Internet 320 
Term of Copyright 322 
Sampling, Borrowing, and Stealing 322 
Rights Management 323
Dangerous Language Alert 323 
Music Clearance: The Music Industry’s Revenge 324 
International Issues: One-Stop Shopping 325 
So Your Corporation Has Also Decided to Become Adventurous? 326


22 • Catalogue Valuation  How to Improve Your Odds at Winning Big   327
Factors in Valuing Catalogues: An Overview 328 
Satellite Radio, Internet Radio, Mobile Phone Streaming, and HD Radio 329 
Evaluating Data 331 
Who Owns the Catalogue? 336 
Termination Issues 337 
The “Trunk” 337 
Who’s Sorry Now? The Blackbird 338


23 • Copyright Issues  A Sampler    339
Changing Copyright’s Image 339 
Copyright Infringement 341 
Sampling 346 
The Impact of the Internet on Recording and Publishing Agreements 348 
How the Internet Has Provided Context for Songwriters’ and Publishers’ Search for Equitable Treatment 350 
The Internet Is Global: So What? I’ll Tell You What 352 
What Is to Be Done? 354 
The Fairness in Music Licensing Act 356 
The Copyright Term Extension Act: A Lesson in Leverage 356
 MP3: How Two Letters and a Numeral Terrorized an Entire Industry 357 
Napster and Post–Napster 357 
The More Things Change, the More They Remain the Same (or Do They?) 358


24 • Copyright  Can’t Live with It—Can’t Live Without It   360
Battles or Battle-Axes 361 
Copyleft (aka Copy Wrong), But Not Copyright 362 
The Clearance Nightmare 366 
Copyright and Personal Property 369 
Misuse of Copyright 371 
Some Suggested Solutions 371


25 • Solving Piracy in the 21st Century How to Avoid a Greek Tragedy     376
Illegal Downloading 377 
When an Apple Boomerangs 382 
When Culture Trumps Commerce 383 
Copyright Owners: Power (Not) to the People 384 
What Would the Greeks Do? 388
 
Conclusion 389 
Index 391