Glossary of Music Business Terminology

Here is a list of music business terms you may encounter. While this list is extensive, it does not cover every term. Feel free to add any that are not on this list in the comment section below:

Artist and Repertoire (A&R):
The division of a record label responsible for scouting, signing, and developing talent.

360 Deal:
A type of recording contract in which a record label receives a percentage of an artist’s income from all sources, including record sales, touring, merchandise, and endorsements.

Advance:
A payment made to an artist, songwriter, or producer by a record label, publisher, or other party, typically recoupable from future royalties or income generated by their work.

Assignment:
The transfer of rights or ownership of a copyright or intellectual property from one party to another.

Backend Deal:
An agreement that provides an artist or rights holder with a percentage of the net profits generated by a project, such as a film, TV show, or commercial, in addition to any upfront fees or royalties.

Backend Royalties:
Income earned by an artist or songwriter from the sale, licensing, or streaming of their music after recouping any advances or other expenses.

Backend:
The portion of a deal, such as a synchronization or endorsement contract, that provides ongoing royalties or income to an artist or rights holder, in addition to any upfront payments or fees.

Blanket License:
A type of license issued by Performance Rights Organizations that grants a user, such as a radio station or venue, the right to publicly perform or broadcast any song in the organization’s catalog for a set fee.

Booking Agent:
A professional who represents artists and negotiates live performance engagements on their behalf.

Booking Fee:
A fee paid to a booking agent for securing live performances or engagements for an artist, usually expressed as a percentage of the artist’s earnings from the show.

Breakage:
An outdated term referring to a percentage of physical record sales withheld by a record label to cover potential losses from damaged products. It’s less relevant in the digital age but may still appear in some contracts.

Buyout:
A one-time payment made to an artist or rights holder in exchange for the rights to use their music or other intellectual property, often without any ongoing royalties or backend income.

Catalog:
The collection of copyrighted musical compositions or sound recordings owned or controlled by a songwriter, publisher, or record label.

Compilation:
A collection of songs or recordings by various artists, typically curated around a specific theme, genre, or time period, and released as a single album or playlist.

Compulsory License:
A legally mandated license allowing anyone to record and distribute a copyrighted musical composition, provided they pay a set royalty rate to the copyright holder.

Co-publishing:
An agreement between a songwriter and a music publisher where they jointly own the copyright of a song or group of songs, typically splitting royalties.

Copyright:
The legal protection granted to creators for their original work, including music compositions, sound recordings, and other creative works.

Cover Song:
A new recording or performance of a pre-existing musical composition by an artist other than the original songwriter or performer.

Co-writer:
An individual who collaborates with another songwriter or composer in creating a musical composition, typically sharing copyright ownership and royalties proportionally to their contributions.

Creative Commons:
A non-profit organization that provides alternative licensing options for creators who wish to share their work more freely, allowing for various levels of use, distribution, and adaptation by others.

Cross-collateralization:
A contractual clause that allows a record label or publisher to recoup advances or expenses from one project or album using the royalties earned by another project or album by the same artist.

Derivative Work:
A new creative work that incorporates or adapts elements of a pre-existing copyrighted work, such as a remix, sample, or translation.

Digital Performance Right:
The right to collect royalties for the public performance of sound recordings via digital platforms, such as internet radio and streaming services.

Digital Service Provider (DSP):
A company that provides access to digital music through streaming or download services, such as Spotify, Apple Music, or Amazon Music.

Distribution:
The process of getting music from the artist to the consumer, through physical or digital means.

DIY (Do-It-Yourself):
An approach to the music business in which artists independently manage, produce, and distribute their music, often using digital platforms and social media for promotion and distribution.

Exclusive Contract:
An agreement between an artist and a label, publisher, or manager that prevents the artist from working with other parties during the contract term.

Exclusivity:
A contractual provision requiring an artist, songwriter, or producer to work exclusively with a specific label, publisher, or manager for a specified period or number of projects.

Featured Artist:
The primary artist or group responsible for a recording, usually receiving the most prominent credit and royalties associated with the work.

First Use:
The first commercial release of a song or sound recording, usually requiring the permission of the copyright holder.

Front-End Fee:
An upfront payment made to an artist or rights holder for the use of their music in a synchronization or licensing deal, separate from any ongoing royalties or backend payments.

Gross Revenue:
The total income generated from a specific source or activity, such as ticket sales, merchandise, or music sales, before deducting any expenses, fees, or taxes.

Independent Label (Indie Label):
A record label that operates without the financial backing or distribution of a major label, often focusing on niche markets, genres, or emerging artists.

Infringement:
The unauthorized use or exploitation of copyrighted material, such as music, without the permission of the copyright holder.

Instrumental:
A musical composition or recording without vocals or lyrics, often used as background music or in synchronization licensing.

ISRC (International Standard Recording Code):
A unique identifier assigned to individual sound recordings or music video recordings, used to track sales, streams, and radio airplay for royalty accounting and reporting purposes.

Label Services:
A range of services provided by a record label or third-party company to support an artist’s career, such as marketing, promotion, distribution, or production, often without the artist signing a traditional recording contract.

Letter of Direction:
A document instructing a third party, such as a record label or distributor, to pay a specific percentage of an artist’s royalties or income directly to another party, such as a manager or producer.

Licensing:
The process of granting permission to use copyrighted material, such as a musical composition or sound recording, for specific purposes, usually in exchange for a fee or royalty.

Live Nation:
A large entertainment company specializing in live music events, including concert promotion, venue management, and ticketing services.

Major Label:
A large, established record label with significant resources and influence in the music industry, often part of a larger media conglomerate. The three major labels are Universal Music Group, Sony Music Entertainment, and Warner Music Group.

Master Rights:
The ownership and control of the original sound recording, usually held by the record label, producer, or artist, depending on the terms of their agreement.

Mechanical License:
A license that grants the right to reproduce and distribute a copyrighted musical composition in the form of a sound recording, usually in exchange for a set fee or royalty per copy.

Mechanical Licensing Collective (MLC):
A non-profit organization responsible for administering and distributing mechanical royalties generated from digital streaming platforms in the United States.

Mechanical Royalties:
Royalties paid to the songwriter and/or publisher for the reproduction of a musical composition in physical or digital formats, such as CDs, vinyl, or downloads.

Medley:
A musical arrangement that combines multiple songs or compositions into a single continuous performance or recording.

Music Metadata:
Information attached to a digital music file, such as song title, artist, album, release date, and genre, that helps organize, identify, and track music across various platforms.

Music Supervisor:
A professional responsible for selecting and licensing music for use in visual media projects, such as films, TV shows, commercials, or video games.

Neighboring Rights:
Rights related to the public performance or broadcast of a sound recording, separate from the copyright of the underlying musical composition, which generate royalties for performers and record labels.

Net Revenue:
The income remaining after deducting all expenses, fees, and taxes from gross revenue.

Non-Exclusive Contract:
An agreement between an artist and a label, publisher, or manager that allows the artist to work with other parties concurrently.

One-Stop:
A music library or catalog where all the necessary rights and clearances for a song or recording are available in one place, simplifying the licensing process for users.

Option:
A contractual provision that grants a record label or publisher the right to extend or renew an agreement with an artist for a specified number of additional projects or time periods.

Packaging Deduction:
A reduction in an artist’s royalties to account for the cost of manufacturing and packaging physical music products, such as CDs or vinyl records.

Payola:
The illegal practice of paying radio stations or other media outlets to favor specific songs or artists, often in exchange for airplay or other promotional consideration.

Performance Rights Organization (PRO):
An organization that collects royalties on behalf of songwriters and publishers for the public performance or broadcast of their music, such as ASCAP, BMI, SESAC, or PRS for Music.

Performance Royalty:
Income earned by songwriters and publishers from the public performance or broadcast of their music, collected and distributed by Performance Rights Organizations.

Plugging:
The promotion of a song or artist to radio stations, playlist curators, or other media outlets with the goal of securing airplay, playlist placements, or other exposure.

Points:
A term used to describe the percentage of royalties an artist, producer, or other party may receive from the sale or licensing of a sound recording, usually expressed as a fraction of one percent.

Press Kit (Electronic Press Kit or EPK):
A collection of promotional materials, such as biographies, photos, press releases, and music samples, used to pitch an artist to media outlets, booking agents, or other industry professionals.

PRO Royalties:
Income earned by songwriters and publishers from the public performance or broadcast of their music, collected and distributed by Performance Rights Organizations.

Promoter:
An individual or company responsible for organizing, marketing, and producing live music events, such as concerts, tours, or festivals.

Public Domain:
The status of creative works that are no longer protected by copyright, either due to the expiration of the copyright term or other factors, allowing them to be used freely by anyone without permission or payment.

Publishing:
The business of managing and exploiting the copyrights of musical compositions, typically involving licensing, collecting royalties, and promoting songs.

Recoupable Expenses:
Costs incurred by a record label or publisher on behalf of an artist, such as recording expenses, marketing, or advances, which must be repaid from the artist’s royalties before any additional royalties are paid.

Recoupment:
The process by which a record label, publisher, or other party recovers any advances, expenses, or debts owed by an artist before paying them any additional royalties.

Remix:
A reworking or adaptation of a pre-existing sound recording or musical composition, often involving the addition, subtraction, or modification of elements such as beats, instrumentation, or vocals.

Residuals:
Ongoing payments made to artists, performers, or other rights holders for the use of their work in visual media, such as films, TV shows, or commercials, usually based on usage, sales, or other factors.

Retention Period:
The length of time a party, such as a record label or publisher, maintains ownership or control of a copyright or other intellectual property rights after the termination of an agreement.

Reversion:
The return of copyright ownership or other intellectual property rights to an artist or creator after a specified period or under certain conditions, as outlined in a contract or agreement.

Rider:
An addendum to a performance contract outlining an artist’s specific requirements for a show, such as technical equipment, catering, or accommodations.

Royalty Audit:
A formal examination of an artist’s royalty statements and accounting records, usually conducted by an independent auditor or accountant, to verify the accuracy of royalty payments and identify any discrepancies or underpayments.

Royalty Rate:
The percentage of revenue paid to an artist, songwriter, or rights holder for the use of their copyrighted works, such as music sales, streaming, or licensing.

Sample Clearance:
The process of obtaining permission and negotiating terms for the use of a pre-existing sound recording or musical composition in a new work, typically involving the payment of a fee or royalty.

Side Artist:
A musician, vocalist, or performer who contributes to a recording or performance but is not the primary artist or featured performer.

SoundExchange:
A non-profit organization in the United States responsible for collecting and distributing digital performance royalties for sound recordings played on non-interactive digital platforms, such as internet radio, satellite radio, and cable TV music channels.

Split Deal:
A type of publishing agreement in which a songwriter or composer retains a portion of their publishing rights and assigns the remaining portion to a publisher, typically resulting in a 50/50 split of royalties and ownership.

Split Sheet:
A document that outlines the percentage of copyright ownership and royalty shares for each collaborator involved in the creation of a musical composition, typically signed and agreed upon by all parties involved.

Streaming Royalties:
Income earned by artists, songwriters, and rights holders from the streaming of their music on digital platforms, such as Spotify, Apple Music, or YouTube.

Sub-publishing:
An arrangement in which a music publisher partners with another publisher, usually in a different territory, to represent and exploit a catalog of songs.

Sync Agent:
A professional who specializes in securing synchronization licenses for artists, connecting their music with opportunities in visual media such as films, TV shows, commercials, or video games.

Synchronization License (Sync License):
A license granting permission to use a musical composition or sound recording in conjunction with visual media, such as films, TV shows, commercials, or video games.

Term:
The length of time an agreement or contract is in effect between parties, such as an artist and a record label, publisher, or manager.

Territory:
The geographic area(s) in which a contract, license, or agreement applies, such as the United States, Europe, or worldwide.

Tour Manager:
A professional responsible for coordinating and overseeing the logistics of an artist’s live performances and tours.

Touring Rider:
A document outlining an artist’s specific requirements and preferences for live performances, including technical equipment, stage setup, accommodations, and catering.

Trademark:
A legally registered symbol, logo, or name used to identify and protect a brand, company, or product.

Underlying Composition:
The original musical work or song, including the melody, lyrics, and chord structure, as opposed to the specific sound recording or performance of the work.

Upstreaming:
The process of an artist moving from an independent or smaller record label to a larger or more established one, usually as a result of increased success or recognition.

Venue:
A physical location where live performances take place, such as a concert hall, nightclub, or festival.

White Label:
A promotional or limited-release version of a sound recording, often pressed on vinyl records with plain white labels, used for DJ play, radio airplay, or other promotional purposes before the official release of the recording.

Withholding Tax:
A tax deducted at the source of income, such as royalties or performance fees, often applied to foreign artists or rights holders earning income in another country.

Work for Hire Agreement:
A contract between an artist or creator and a party commissioning a creative work, such as a music composition or sound recording, in which the creator relinquishes their copyright ownership in exchange for payment or other consideration.

Work for Hire:
A legal term describing a creative work, such as a musical composition or sound recording, created under a contract in which the creator relinquishes their copyright ownership to the party commissioning the work.

John Kwisses