Key Music Industry Terms: 5 Every Artist Should Know (Pt. 2)
- SiX EiGHT ONE
- Nov 29, 2024
- 3 min read
Industry-specific language and specialist terminology is commonplace within particular fields and can include technical terms, acronyms and other forms of jargon that is unique to that industry.
The music industry is no different, it has a language of its own and whether you’re an industry veteran or a newbie, an artist or an executive, the CEO or the intern, it is important to have some basic understanding of industry terms that are commonly used in day-to-day business.
Following on from part 1, here are 5 more key music industry terms that every artist should know or be aware of:
#1 - Recording Royalties
This is the money that an artist receives when their recorded music is played – downloaded, streamed or bought physically. It is a type of payment made (usually periodically – monthly, quarterly, annually etc) to an artist for the ongoing use of their copyrighted works.
#2 - Key Man Clause
Also referred to as a ‘Key Person’ clause, it is a term within a contract that states that if a person who is intrinsic to the success of an artist leaves the company (label or publisher) that signed the said artist, the artist can either go with that person or leave the company all together. It protects an artist’s relationship with a particular individual who may be the only reason an artist is deciding to sign with that company.
#3 - NAR
An abbreviation for the term ‘Net Artist Rate’ aka ‘Net Artist Receipts’, you would receive a percentage of the revenue that is left over after deducting expenses. The releasing label artist will usually be paid as a percentage of Net Income where Net Income represents the money received by the label derived from the exploitation of the recording, minus VAT and shared costs (where shared costs are the costs incurred in connection with the exploitation of the recording).
#4 - PPD
An abbreviation for the term ‘Published Price to Dealer’, it is the wholesale unit price of a recorded work. A PPD royalty pays an artist a percentage of the price that the record label 'sells' the release to a dealer.
#5 - Recoupment
The act of recovering the equivalent of an amount of money invested in an artist and/or project etc. It is a repayment of any advances, recording costs and other expenses incurred by a music company for creating and marketing an artist’s musical work, essentially, whatever royalties you earn on recordings sold, will not be paid to you until you have recouped.
Summary
As we mentioned in part 1, as is the case in pretty much all industries ranging from Film & TV, to Agriculture, to Construction and more, in order to function confidently and have a chance at success, it’s a good idea to equip yourself with some basic knowledge of the terminology used by people within that industry.
Whilst it is of course important for executives on the business side of music to understand these terms and more, contrary to popular belief, it is also essential for artists (including producers, musicians and other creative talents) to be aware of at least some of these terms.
This information will help you to make better and more informed choices that can have a massive impact on the trajectory of your career – even if you have an amazingly trustworthy management team to take care of things, be sure to stay up-to-date on industry changes and developments so you can stay at the forefront and be ahead of the game.
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SiX EiGHT ONE
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