Today's episode touches on the Big 3 making over $5 million every 2 hours last year, electronic press kits, and our contract Speak segment. So naturally, you don't want to miss it. So let's get to it.
Welcome to The Music Professional Podcast, the place to improve your abilities and leverage your skills as a music professional. I'm your host, Shaheim Kellum.
I have a great episode lined up for you today, including why electronic press kits still matter and what should be in yours. We're going to do a little Contract Speak. We cover the initial and option periods and how to identify those tricky renewal clauses, but first, did you know the Big 3 music companies collectively generated over $5 million every 2 hours in 2021?
According to MusicBusinessWorldwide.com's recent calculations, the three major global music operations cumulatively generated $23.11 billion across the 12 months of the 2021 calendar year.
That was the equivalent of $2.6 million every hour…
$63.3 million every day… or
$444.4 million every week.
And that breaks down to around $732 every single second.
Here's the breakdown:
Of course, the largest global company last year was Universal Music Group. And through the lens of annual recorded music revenues, including merchandise sales, UMG came in at $8.48 billion. An annual growth of $1.32 billion year-on-year, according to MBW's calculations. In addition, Universal's publishing division saw an increase of $279 million, for a revenue total of $1.58 billion. As a result, Universal is the first to take its annual revenues above $10 billion in history.
Sony had a prosperous 2021, particularly with recorded music streaming revenues, which grew by $979 million in 2021 to hit $3.94 billion.
Sony also had a big year for 2021 with its acquisitions in recorded music: it bought both UK-based company AWAL and Brazil-based Som Livre last year, amongst other purchases. With all this action happening for Sony, they can keep their eyes on the growth seen in their publishing operations. If they can grow that margin again, they'll surpass a $2 billion annual revenue figure this year in 2022.
Last but not least, Warner Music Group clocked $5.58 billion in 2021. Up by $1.04 billion
year on year. WMG's annual recorded music revenues (including merchandise) leaped up by $882 million, $141 million from their music publishing division at Warner Chappell Music, and up $900 million for the recorded music streaming revenues to reach $3.12 billion year-on-year.
All this money being made tells me that there's enough for everybody. Now, this isn't to say that you'll be a billionaire right away, but at least there's enough out there to get a slice of the pie.
Speaking of pie, honey. Honey! Do you feel like making me a pie today?
Just checking. We'll be right back.
Why Electronic Press Kits Still Matter
Reference: Apple Music for Artists
Apart from creating and releasing your music, it would be best if you got it into the right hands, of course. An Electronic Press Kit, or EPK, helps you cut through the noise.
Packaged in one place, an EPK is your professional resume and business card. It makes it easy for music industry professionals such as managers, booking agents, venues, promoters, journalists, and more to see and review your work.
Make a great first impression.
Exploring if an EPK is suitable for you indicates that you may be ready to take your career to the next level and establish yourself as a brand. Many artists craft their EPKs, while others may work with professionals to create an EPK that's just right.
To ensure your EPK is concise and to the point, be sure it has these key elements:
Artist bio. It should be written in the third person and tell the world who you are and what you're all about. We suggest having a long and short version of this handy.
Photos. Include a variety of high-quality images or album artwork that can be used for promotional purposes.
Your music. Highlight your most popular songs or songs that most authentically represent who you are. Include links to these songs.
Music videos. Give people a peek into your on-screen persona. Include links to some of your best videos, behind-the-scenes shots, and other visually compelling elements.
Notable moments. Include performances, quotes from interviews, accolades, and other highlights and achievements.
Upcoming releases. Keep people curious by sharing details about any forthcoming playlists, appearances, interviews, or musical releases.
Analytics. Showcase the impact your music is making out in the world.
Contact information. Include ways to reach you, such as social media handles, email, and website.
Elevate your brand
While an EPK's primary focus is to broadcast your brand and forge potential partnerships, another advantage of drafting an EPK is the journey of self-reflection. Hopefully, as you're collecting assets and highlighting your wins, you'll grow a deeper understanding of your brand's goal and mission. Keep your EPK fresh and up to date. You never know whose desk it'll come across.
Contract Speak: Term periods and those tricky renewal clauses, right after this.
Contract Speak: Contract Term and Tricky Option Periods
Disclaimer: I am not an attorney. The materials on this show and the blog are for informational purposes only and do not constitute legal advice or a substitute for legal counsel. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. You should not rely or act upon this information without seeking professional counsel.
Time for Contract Speak:
Contract speak is the segment of the show where we look over music contracts and take bitesize pieces of it out to break down clauses, concepts, and terminology. The more you can understand what is being said in a contract, the better you'll understand what it's not saying. So let's get to it.
Term: The length of time the artist will be in business with the label or company. The term equals the sum total of the Initial Period, all Option Periods, and a last bit called a Restriction Period (sometimes called an Exploitation Period that functions like a Sunset Clause).
Wow, that is a mouth full. But in the simplest of definitions, a contract term is the amount of time over which the agreement lasts. In music contracts, the term can differ by the type of agreement. For example, an exclusive songwriting deal with a music publisher could be for one year with the option to extend through several more, while a record deal could be phrased in terms of album cycles. Shout out to exporation.io for the interpretation and example.
It is essential to mention that the term is binding, meaning an obligation that cannot be broken, and if, for example, the clause says that the agreement lasts until May 31st at 11:59 pm, then that timing must be adhered to strictly.
So what is an Initial Period, Option Period, Restriction or Exploitation Period, and a Sunset Clause?
Well, first, let's break down what a Contract Period is.
The contract period is when the artist is exclusively bound to a label. The master rights of all the assets produced during the contract period are generally granted to the label. The label can then exploit the assets during the exploitation period. We'll get to that later.
An initial period is the first Contract Period or the first period of time you'll be under this contract.
Typically, the initial length of a recording contract is one year. I've usually seen two years as the Initial Period for artist management agreements. This one or two-year term is generally followed by several option periods, where the record label is free to renew your contract for additional time periods. And this is where it gets tricky. A company or individual will ask you to grant them one or several renewal(s) or automatic renewal(s) of the agreement with one or several option periods. However, they aren't really asking because they tend to use a word that does not need your approval, and that word is "automatic." You also will not be able to alter that decision either, as it is "irrevocable."
It would sound something like this:
"Artist hereby grants to Manager one (1) automatic irrevocable "Renewal Period" to extend the Initial Term for two (2) additional years (the "Extended Term")."
Automatic and irrevocable means... well, you know what automatic means, but irrevocable means not possible to revoke or cannot be altered. Depending on the number of option periods you are granting, you can be under the same agreement for 2 to 10 years before they will let you out. That's a little bit of an exaggeration, but not really. I personally have reviewed iron-clad contracts that put multiple automatic irrevocable renewals that added up to 12 years after the initial period. I say all this to say you may not be able to not have those words included, but you can lower the number of optional periods that are allowed. You can even limit the length of the initial period.
By limiting the length of your contract to one year, not including option periods, you prevent a record label or company from virtually controlling your life and ingenious work for an excessive amount of time.
You never know where your career will take you, and it's important to keep your options open. But, before signing that contract, make sure you aren't locking yourself into a lengthy contract with no escape.
Restriction or Exploitation Period
The exploitation period is when a label can exploit recordings made under the agreement. In most contracts, the restriction or exploitation period is an extra "period" where the artist is still bound to the contract's material conditions and noncompete clauses. But this period starts when the last Option Period ends and can last another duration. It is used to prolong the contract or as a way of clinging to an artist's popularity for just a bit longer.
You've found your way into an agreement and how long you'll have to be there, but you should think about how you'll get out. I won't dive deep into release commitments where you can have guarantees in writing that ensure that the other party is doing the work they promised, or you'll walk. But I will touch on sunset clauses or sunset provisions.
A sunset clause states a finite amount of time after a contract end date, where the manager can be paid a commission. In addition, a sunset clause gives the manager the right to collect commission from any other contracts they secured for the artist during the initial contract term. I'm only mentioning this clause as with it in place, and by meeting all of the obligations outlined in an agreement, you will have an opportunity to walk away without dispute or heavy contention. Of course, that's not all cases, but a clause on your side is one more shield for the battle if it comes to that.
These definitions are an oversimplified examination of these clauses but arming you with the basics will help you better understand what you'll be speaking to your attorney about before you consider signing your next contract.
As you know, in every episode, you'll get a little business, some operations, and some terminology or contract breakdown to help you become better as a music professional. So follow this podcast and leave a like, comment, or review to help the algorithm. I'd appreciate that. Check me out on Twitter @TheMusic_Pro1 to stay up to date with episodes and take my weekly quizzes to test your knowledge and learn a thing or two. Thank you again for listening to The Music Professional Podcast, the place to improve your abilities and leverage your skills as a music professional. Once again, I'm your host, Shaheim Kellum.
I'll talk to you in a couple of days.