Advances, recoupment, mechanicals, neighbouring rights — the music industry loves jargon. Here's every term you need to know, explained without the nonsense.
TL;DR
Music industry terminology is deliberately complex, keeping artists confused and compliant. Understanding terms like recoupment, cross-collateralisation, and neighbouring rights empowers you to negotiate better deals and spot unfair terms. This glossary covers everything from A&R to 360 deals.
Money and Deals: The Financial Terms
An 'advance' is a loan against future earnings, not a gift. Every penny of an advance must be recouped from your royalties before you see additional income. A £50,000 advance sounds exciting until you realise it means your first £50,000 in royalties goes to paying it back. Advances should be viewed as debt — attractive debt, but debt nonetheless.
'Recoupment' is the process of paying back an advance through royalties. Until your advance is fully recouped, you receive no additional royalty payments. The recoupment rate and which income streams count toward recoupment are crucial contract details. Some deals recoup only from recording royalties; others cross-collateralise across all income.
'Cross-collateralisation' means that losses on one project can be offset against earnings from another. If your first album doesn't recoup its advance, a cross-collateralised deal lets the label offset that debt against your second album's earnings. This is generally unfavourable for artists and should be resisted or limited in negotiations.
Rights and Royalties: Who Owns What
'Master rights' refer to ownership of the actual sound recording. Whoever owns the master controls how the recording is used, distributed, and licensed. For independent artists who self-release, you own your masters. In a traditional record deal, the label typically owns the masters — sometimes forever, sometimes for a fixed term.
'Publishing rights' cover the songwriting — the lyrics, melody, and musical composition. These are separate from master rights and generate separate income. Publishing rights exist from the moment you write a song, automatically. You don't need to register them to own them, but you do need to register them (with PRS, MCPS, etc.) to collect the royalties they generate.
'Neighbouring rights' (also called 'related rights') are the rights of performers and recording owners when their recordings are broadcast or publicly played. PPL collects these in the UK. They're different from songwriting performance royalties (collected by PRS) and are frequently overlooked by independent artists, representing genuinely uncollected income.
'Mechanical royalties' are generated when music is reproduced — streamed, downloaded, pressed onto physical media, or used in a music box (hence 'mechanical'). MCPS administers these in the UK. Your distributor collects some mechanical royalties from streaming platforms, but MCPS handles others — registering with both ensures full collection.
Industry Roles and Structures
'A&R' stands for Artists and Repertoire — the department or individuals at a label responsible for discovering, signing, and developing artists. Modern A&R combines ear-for-talent with data analysis, social media scouting, and live show attendance.
A '360 deal' is a contract where the label takes a percentage of all your income streams — recordings, live, merchandise, publishing, brand deals — rather than just recording income. These became common after physical sales declined and labels needed to diversify their revenue. The percentage and services provided in return vary dramatically.
A 'sync supervisor' (or music supervisor) is the person who selects and licenses music for use in films, TV, adverts, and games. They work on behalf of productions and are the primary gatekeepers for sync placements. Building relationships with sync supervisors — or having an agent who has them — is key to sync income.
'PPD' (Published Price to Dealer) is the wholesale price of a physical record, which historically determined royalty calculations. In the streaming era, PPD is less relevant, but it still appears in some contracts and can affect how royalties from physical sales are calculated.
Digital and Streaming Terms
'ISRC' (International Standard Recording Code) is a unique identifier for each recording — like a barcode for audio. Every track you release should have a unique ISRC code, assigned by your distributor. ISRCs are essential for tracking streams and royalties across platforms.
'ISWC' (International Standard Musical Work Code) identifies the composition (the song itself), separate from any specific recording of it. Your ISWC is assigned when you register your song with a collection society like PRS. Where ISRCs track recordings, ISWCs track songwriting.
'Content ID' is YouTube's system for identifying copyrighted music in uploaded videos. When someone uses your music in their YouTube video, Content ID can either block the video, mute the audio, or monetise the video with ad revenue directed to you. Your distributor typically handles Content ID registration.
'Pre-save' is a feature on streaming platforms that allows fans to save your upcoming release before it drops. On release day, the track automatically appears in their library and Release Radar. Pre-saves signal to the algorithm that listeners are interested, boosting initial distribution.
Contract Clauses That Trip Artists Up
'Option period' in a record deal gives the label the right (but not obligation) to extend the contract for additional albums. The key unfairness: the label gets to decide, not you. If they exercise the option, you're committed to another album cycle under the same terms. Option terms should escalate in your favour (higher royalties, larger advances) with each exercise.
'Key person clause' protects you if the specific A&R person or executive who championed your signing leaves the label. Without this clause, you could be stuck on a label where nobody knows or cares about your music because your champion departed. A key person clause gives you the right to review or exit the contract if that person leaves.
'Reversion clause' specifies when and how your rights return to you. This is crucial: without a reversion clause, a label could own your masters indefinitely, even if they're doing nothing with them. A good reversion clause includes minimum exploitation requirements (the label must actively release and market your music) and automatic reversion if they fail to meet them.
'Minimum commitment' defines the label's obligations to you — minimum marketing spend, guaranteed release dates, minimum number of releases. Without minimum commitments, a label could sign you and then shelve your music indefinitely. Always negotiate concrete minimum commitments into any deal.