Music Business: The Key Concepts

Richard Strasser

• Publisher: Routledge
• Year: 2009
• ISBN:
  9781135845193
• Edition: 1
• Topic: Media & Performing Arts
• Subtopic: Music

Music Business: The Key Concepts is a comprehensive guide to the terminology commonly used in the music business today. It embraces definitions from a number of relevant fields, including:

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• general business

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• marketing

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• e-commerce

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• intellectual property law

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• economics

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• entrepreneurship

In an accessible A-Z format and fully cross-referenced throughout, this book is essential reading for music business students as well as those interested in the music industry.

MUSIC BUSINESS

The Key Concepts

A

ADVANCE

Monies paid by one party to another as an incentive to sign a contract. In a recording or publishing contract, this payment is often a prepayment of royalties from future earnings. In effect, this income is a loan to an artist or songwriter for the production and delivery of one or more recordings or songs. Unless otherwise specified, advance monies are recoupable, which entitles the party who provides the funds to be reimbursed before the artist or songwriter receives royalties. This amount is due irrespective of whether an album or song is profitable or not. For example, if an album does not make a profit, a record label will cross-collaterize the advance against future album sales.

See also: contracts; controlled composition; copyright; independent record label; major record label

Further reading: Halloran (2007); Holden (1991); Krasilovsky (2007)

ADVERTISING

A paid nonpersonal communication used to promote a product, brand, or service by an identified sponsor to a target audience.

This form of communication is transmitted through mass media vehicles such as television, radio, newspapers, and magazines, or by nontraditional forms of advertising such as buzz marketing, social networks, blogs, or user-generated content Web sites. Advertising can be divided into several categories. Product advertising endeavors to sell a specific good or service, such as a new album, by describing a product’s features, benefits, and price. Corporate advertising creates goodwill for a company rather than selling a specific product. By improving its corporate image a company can enhance the consumer perception of their products, which in turn will strengthen their stock value. Covert advertising is placement of products within other entertainment media, primarily film and television. This may involve an actor mentioning, wearing, or using a particular product. Interactive advertising is communication in which a customer controls the type and amount of information received. This form of advertising takes numerous forms, including Web sites, viral marketing, and SMS text messaging. For any advertisement to be successful it must appeal to its target audience. An advertisement appeal falls into one of two categories:

logical and emotional. A logical appeal focuses on a product’s or service’s features, price, value, and data. Advertisement based on price value tends to have a high recall value to a specific market. Emotional appeals function by manipulating a recipient’s emotions and desires. The range of emotions elicited by the advertisement depends often on the product and the outcome of the advertiser. Humor appeals are one of the most commonly used appeals today. Combined in a well-integrated advertisement campaign, humor appeals have been shown to enhance attention, credibility, recall, and purchase intention. Fear appeals draw attention to common fears and risks and then associates a solution using a particular product. Poorly conceived and executed fear campaigns can anger an audience or cause them to block out the message. Celebrity appeals are based on the perception that people will use a product if it is endorsed by a celebrity. Celebrity endorsers often possess characteristics that resemble a product or the image a company wishes to project. These messages are usually part of an overall strategy known as the advertising campaign. Campaigns vary considerably in duration, form, and media. In an integrated marketing system, campaigns comprise of more than one carefully planned and sequenced advertisement in different media vehicles that target specific demographics. A campaign will make use of several desirable qualities in an advertising message to elicit a response from a target audience. This process, known as the AIDA model (awareness, interest, desire, and action), is used as the basis for directing a consumer from awareness of a product or brand to the final stage of purchasing. Each stage has a specific role in developing this process, especially in an age when it is difficult to gain consumer attention. The first stage is creating an awareness of an unknown or new product or service in a target market. The second stage requires the advertisement campaign to develop interest in the consumer by offering features, benefits, and advantages of using the product. If the campaign is successful, a consumer will develop a desire for the product that satisfies their needs, thus leading them to purchase the product or service.

Regulation of advertising is conducted at the national level with each country regulating how messages are transmitted to particular audiences, especially in the areas of child, tobacco, and alcohol advertising. In the United States the Federal Trade Commission (FTC) regulates advertising primarily in the areas of false advertising and health-related products. In 1997, the FTC began an investigation into record distributors’ practice of forcing retailers into setting minimum prices for CDs. Under minimum advertised price (MAP) policies retailers seeking any cooperative advertising funds were required to observe the distributors’ minimum advertised prices in all media advertisements, even in advertisements funded solely by the retailers. The FTC found that MAP violated Federal Law by restricting competition in the domestic market for recorded music.

In the United Kingdom the Advertising Standards Authority (ASA) is a self-regulated organization that has developed a code of advertising ethics. Because the organization does not have regulatory powers, it does not bring legal action against violators. Rather, the ASA posts the information of acts of transgression on their Web site or to Ofcom, the communications industry regulatory body in the United Kingdom. Funding for the organization is generated by voluntary fees levied on advertising costs.

See also: artist; consumer; e-commerce; independent record label; major record label; marketing; music video; public relations (PR); retail

Further reading: Aaker (1998); Agwin (2006); Andersen (2006); Barrett( 2001); Bayler (2006); Dunbar (1990); Jacobson (2007); McCourt (2005); Maslow (1970)

AGENT

A person or organization that acts on behalf of or represents individuals and groups by implied or express permission.

In the music industry, agents are bona fide representatives of an artist (principle) hired to procure employment. When a contract is signed the principle is held legally liable for acts performed by the authorized agent. Agents act as an intermediary between managers and promoters or venue operators. For the procurement of employment, agents are compensated via commissions that range between 10 and 20 percent of an artist’s gross payment. Unions such as the American Federation of Musicians (AFM) and the American Federation of Television and Radio Artists (AFTRA) limit the total compensation amount to 20 percent. Contractual duration last on average three years for musicians and seven years for artists associated with film and television. Several states require agents to be licensed, including New York, California, Illinois, Texas, Minnesota, and Florida. The penalties for unlicensed action include black listing by an artist’s representative union or annulment of all contracts by a state labor commissioner. The consequences of contractual annulment include the reimbursement of all commissions with interest to the artist under the stated agreement in the contract. Licensure is further dependent on the union that represents the artist booked by the agent. Due to complexity of the music industry agencies fall into three categories based on their geographic coverage. Local agents provide employment within in a particular city or nearby cities. They book small venues such as clubs, bars, and at personal engagements. A regional agent’s geographic coverage is somewhat greater than a local agent. Regional agents operate in larger cities, adjoining states, or a larger geographic region, such as the Southwestern United States. A regional agent will procure employment for an artist at large venues or conduct small tours within their geographic realm. National agencies cover entire countries and often international areas. Most national agencies will only work with substantial artists that have...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Acknowledgements
• List of Key Concepts
• Introduction
• KEY CONCEPTS
• Bibliography