Music Industry Terminology Series; (part 2) Music Publishing

Advances: The lump sums payable to the author on signing the agreement and at the points any options are taken up by the publisher. These sums are recoupable from royalties.

Author: The person or entity who creates a work. This can be the creator of the musical composition, the musical arrangement or the lyrics, or a combination of any of them. In some countries, interpreters of lyrics may also qualify as an author.

Boiler plate: The legal detail and standard provisions to be found in an agreement.

Cleared: When the rights in a work or a performance have been authorized for use by the legitimate rights holders.

Contract period: Each option period in an agreement.

Copyright: The right to authorize or prohibit the making of copies of a work. (also used in reference to the copying of recordings in some common law countries).

Cover: A performance by a performer who is not the author of the musical work.

Cure Period: A provision in a contract which allows a defaulting party to correct the default within a defined time period after being notified by the other party.

Equitable remuneration: Fair (usually equal but not necessarily) remuneration between two rights holders who are entitled to share a single payment.

Exclusive right: The holder of an exclusive right has the power to authorize or prohibit certain actions or use

Exclusive: Not divided or shared with others.

Heads of agreement: A brief summary of the main points of an agreement without the legal detail (boiler plate).

Home Copying Levies: a levy or tax that is placed by national governments on recordable media (such as recordable CDRs, DVDs and tape) and/or recordable hardware (such as computer hard drives/analogue and digital recording devices) to compensate rights holders for music copied by consumers within the domestic environment. The income is usually distributed to the rights holders (authors, performers, publishers and phonogram producers) via CMOs.

In perpetuity: Something that lasts for life or forever. In copyright terms, it refers to the full length of copyright protection permitted by law, i.e. life of copyright.

Intellectual property (IP): A non-tangible product of the intellect that has commercial value, including copyrighted property such as literary, musical or artistic works, and ideational property, such as patents, business methods, and industrial processes.

License/licensing: When rights owners authorize the use of their rights to third parties under certain conditions, whilst retaining ownership of the right.

Licensee: A person or business that licenses a right from a right owner (the licensor) under certain conditions.

Licensor: A right owner who licenses the use of the right under certain conditions to another person or business (a licensee).

Lyrics: The words of a work.

Making available: The exclusive right for authors, performers and phonogram producers to authorize or prohibit the interactive use of their works or recordings by wire or wireless means via the Internet, such that members of the public may access a work or recording from a place and at a time individually chosen by them.

Mechanical license: The license issued by the copyright owner of a musical work (or a CMO representing the copyright owner for mechanical rights) to a phonogram producer, which permits the phonogram producer to exploit recordings containing the work.

Mechanical rate: The rate set or recommended in a country as a percentage of PPD, or as a rate per track, payable by phonogram producers to copyright holders of works (or a CMO representing the copyright owner for mechanical rights) for each record sold.

Mechanical royalties: Royalties paid by owners or licensees of sound recordings to the copyright owners of musical works (or a CMO representing the copyright owner for mechanical rights) for the right to record, copy and distribute works in such recordings.

Minimum commitment: The minimum number of works or recordings required to be submitted or released during each contract period.

Minimum Commitment: The minimum number of works required to be released or written by the author within each option period. If the option period is based on an album being released, there may be a provision that there must be a minimum percentage of works written by the author on the album. This is often in the 70 – 90 per cent range. If the author does not manage to achieve that percentage, the publisher may be able to reduce the advance on the next option period pro-rata or to extend the current period.

Music supervisor: A person who has the responsibility to find and clear suitable music and manage the music for a film, television production, video game or an advertisement.

National treatment: A principle in international law wherein a member state grants equal treatment and rights to foreigners as it does to its own citizens, provided that the two countries are both parties to the same relevant international agreement or treaty.

Options: The point in time in the agreement when the publisher has the right to decide whether to continue with the agreement and pay a further advance or to terminate the term of the agreement.

Overage: Any additional sums payable over and above the guaranteed sum in an agreement.

Point: A percentage point. 3 percent of PPD is sometimes referred to as ‘3 points’.

PPD: The published price to dealers of a recording as published by a phonogram producer or distributor. (Sometimes referred to as the wholesale price)

Publisher: A person or business that commercially exploits the works created by authors.

Publishing agreement: An agreement whereby an author licenses or assigns the works they create to a music publisher for commercial exploitation of those works.

Reciprocal agreements: When one organization in a country has an agreement with another organization in another country to pay through royalties to authors or performers resident in either country, from one to the other.

Recoupable cost: A cost that can be offset against royalties earned by a performer or author, by a phonogram producer or publisher.

Recoupment: The point at which the royalties earned under an agreement equal the advances and other recoupable costs.

Related rights: Intellectual property rights granted to performers, broadcasters and phonogram producers.

Remuneration right: The right to receive a payment every time a work or a recording is used without the ability to authorize or prohibit such use.

Retention period: The period after the term of a publishing agreement has expired whereby the works covered in the agreement continue to be exercised by the publisher.

Royalties: Compensation payments made to an author, performer or other entity for each use or sale of a work, recording or merchandise item by a publisher, phonogram producer, computer game manufacturer or merchandiser etc. A royalty is expressed as a percentage of receipts or as a payment for each unit sold.

Royalties: The different royalty rates for mechanical income, public performance income, covers, synchronization licenses, sheet music sales etc. payable to the author.

Royalty Basis: ‘Receipts’ or ‘at source’. ‘Receipts’ means the amount received by the publisher after costs, including the sub-publisher’s commissions etc. ‘At source’ means the actual gross amount paid on behalf of the author’s works from the CMO or phonogram producer to the publisher in each part of the territory. From the author’s point of view it is far better to be paid ‘at source’.

Royalty rate: The percentage at which royalties are paid.

Sample: The use of a portion or part of an existing recording or work (or both) and the integration of this into a new recording or work (or both).

Sheet music: Musical notation of a work printed or written down, which usually shows the notes, chords, lyrics and other musical information for the performance of the work using voice, piano, guitar and/or other musical instruments.

Synchronization license: The license issued by a publisher or an author when the author’s work is synchronized with visual images, usually moving images.

Term: The time period wherein the agreement is effective. This could be a specified period of time, a number of albums or a combination of both. All works written by the author during the Term and sometimes also written prior to the start of the Term are controlled by the publisher for the Rights Period (see below).

Territory: The geographical area in which the publisher is entitled to collect publishing income. This is usually the world, but it could be limited to certain countries or continents.

The Rights Period: The period of time in which the publisher has the right to collect publishing income for works controlled during the Term.

Track: A single recording of a performance of a work. There are typically 10 to 14 tracks on an album. Each track often comprises many sub-tracks which are recorded individually and which are then mixed to create the finished track.

Trademark: The registered name or symbol identifiable with goods or services to ensure exclusivity and protection from others using the same name or symbol for commercial benefit.

Work: Any author’s musical creation, including the musical composition and/or lyrics, and/or the musical arrangement. In some countries, those that translate the lyrics may also have rights in a work.