Part 2: The Artist & Manager Relationship – A Look At Recording Industry Management Agreements

[Editors Note: This is a guest blog written by Justin M. Jacobson, Esq. Justin is an entertainment and media attorney for The Jacobson Firm, P.C. in New York City. He also runs Label 55 and teaches music business at the Institute of Audio Research. Read the Part One of this two-part installment here.]

 

We will continue from our prior installment on “The Artist & Manager Relationship.” We will now explore some additional contract clauses included in most management agreements as well as a few negotiation tactics for these clauses.

Another essential matter that needs to be ironed out is the “term” that the artist is signed to the manager. Typical language outlining the term and options is below:

Term – The term of this agreement will be for an initial period of one (1) year commencing on the date hereof (the “First Contract Period”) plus the additional “Contract Periods” if any, which Term may be extended by Manager’s exercise of one or more of the options granted to Manager below.

Options – Artist hereby irrevocably grants to Manager three (3) separate consecutive options to extend the Term for a “Second”, “Third”, and “Fourth” Contract Period. Each such option consist of one (1) year each and will be exercised automatically by Manager at the end of the then current Term unless Manager gives Artist written notice to the contrary no later than thirty (30) days prior to the date that the then current Contract Period would otherwise expire.

A typical management agreement term can last for as little as 1 or 2 years. But, it can be for as long as 5 or 6 years, or even more. The terms of an agreement are traditionally structured with a minimum of one year followed by several options for additional years. Sometimes, the “term” is based on “album cycles” rather than specified calendar years. In this situation, the “term” starts with the commencement of recording the album and lasts until the end of the tour or associated promotional activities for that album. This time period could end up lasting longer than one calendar year. Similar to the language above, usually the options are automatically exercised by the manager. This provides the manager with the right to choose to terminate the agreement by providing notice to the artist.

If they do nothing, than the option is exercised and the agreement continues. Ultimately, this is a point that should be negotiated between the parties as the agreement could require mutual approval to exercise an option or it could include a set milestone that must be reached for an option to be exercised (i.e. artist must earn $10,000 during the one year term for the option to be exercised or obtain a recording/distribution agreement).

Other possible limitations on the term of the agreement could be that if the artist doesn’t earn a specified amount in a given time frame, then the artist is free to terminate the agreement. If this option is selected, a manager should ensure that any offers that the artist turns down as well as those that are accepted are included in this total amount. This protects the manager as an artist cannot simply turn down valid offers to reduce the income earned in order to get out of the contract. Conversely, an artist should insist that for an offer to count toward this minimum, it must be similar to those the artist had previously accepted. This prevents a manager from simply providing nominal or unsatisfactory offers in an attempt to continue extending the management arrangement.

Since a manager is entitled to receive compensation for any agreement entered into or substantially negotiated during the term of the agreement, a “sunset” clause can be included to reduce the amount that a manager is entitled to after the expiration of the term of the agreement.

Typical language for a “sunset” clause is as follows:

Following the expiration or termination of the Term hereof, Artist agrees to pay Manager for a period of three (3) years a commission of fifteen percent (15%) from any contracts entered into during the Term and all renewals, extensions, additions, modifications, amendments, substitutions or supplements of all contracts, engagements and commitments entered into or substantially negotiated for during the Term hereof. Subsequent to the termination of this first three (3) year period, there shall be modifications downward of Manager’s commission percentage in the following manner: (i) a reduction to twelve (12%) percent for the second three (3) year period subsequent to termination, (ii) a reduction to ten (10%) percent for the third three (3) year period following termination, and (iii) Subsequent to the end of the third three (3) year period the Manager shall no longer be entitled to receive commission.

A “sunset” clause is used to reduce a manager’s commission in the years following expiration of the term of the management agreement. This clause reduces the percentage the artist owes to the manager over time and eventually extinguishes this obligation entirely. This is important for an artist who is leaving one manager and signing with another, as the new manager would typically want their standard commission rate (15-20%) and your prior manager would still be entitled to their percentage under the “sunset” clause (15-20%). This situation severely limits the amount an artist earns; and, therefore, it is prudent to ensure that the prior manager’s percentage reduces and eventually ends at a specified time.

Another method an artist can utilize to potentially terminate a management agreement early is the inclusion of a “Key Man” clause. This clause protects a musician’s relationship with a particular individual by stipulating that the personal manager (the “key man”) must represent the musician or else the musician may terminate the contract.

This applies if the “key man” is deceased, terminated or otherwise is no longer affiliated with the management company that the artist is currently signed to. The particular individual needs to be listed by name in the agreement for this clause to be operative. However, the inclusion of this type of language does not obligate the artist to leave the management company; it just provides the artist with the opportunity to do so if they choose.

A standard “key man” clause could reads as follows:

During the Term, John Doe shall be primarily responsible for Manager’s activities under this Agreement. Notwithstanding the foregoing, it is understood and agreed that John Doe may delegate day-to-day responsibilities to other employees of Manager provided John Doe remains primarily responsible for the activities and services provided by Manager. Notwithstanding anything to the contrary contained herein, in the event that John Doe shall cease to be employed by Manager or shall cease to be primarily responsible for Manager’s activities hereunder (“Key- Man Event”), Artist shall have the right to terminate the Term of this agreement effective upon the date of Artist’s notice to Manager of such Key-Man Event.

Overall, a personal manager is an essential member of your music business team and one that can truly make or break your career. They can be a driving force behind your success or a stumbling block to your advancement; consequently, the negotiation of a written management agreement helps to ensure that an initial managerial arrangement doesn’t have a negative impact on an artist’s career going forward and that all parties fully understand what they sign and feel protected.

This article is not intended as legal advice, as an attorney specializing in the field should be consulted. Some of the clauses have been condensed and/or edited for content purposes, so none of these clauses should be used verbatim nor do they act as any form of legal advice or counseling.

iHeartRadio Expands Services For Users

Hot on the heels of announcing 100 million registered users, iHeartRadio recently released their newest services, iHeartRadio Plus and iHeartRadio All Access (powered by Napster) and we’re excited to announce that these services are now available for TuneCore Artists to distribute their music to!

iHeartRadio already offers listeners access to over 750 live streams of radio stations across the U.S., as well as the ability to build a playlist or ‘user-generated’ radio station based on an artist of their choosing. Here’s a look at how the new services stand to impact users and artists:

  • With iHeartRadio Plus, users will have access to offline listening, unlimited skips and replays, and customized radio stations for $4.99/month;
  • With iHeartRadio All Access, users get a traditional on-demand streaming platform complete with a catalog millions of songs (via Napster) for $9.99/month.
  • For TuneCore Artists, both of these new services open up the opportunity for discovery and democratic listening among iHeartRadio subscribers!

What does that mean for TuneCore Artists who have already distributed to iHeartRadio and Napster?

Since your music is already on iHeartRadio and Napster (fka Rhapsody), you’re good! You do not need to take any action to make your current active releases available on iHeartRadio Plus or iHeartRadio All Access. Any fans who search for your release(s) on iHeartRadio should be able to find them on both of these services.

For information about getting your music on iHeartRadio, learn more here.

To add your current active releases to iHeartRadio and/or Napster, head over to your Store Manager.

TuneCore Artists know they can always look to us to offer them a plethora of stores and streaming services to send their new releases to. We know that independent music is something that fans seek globally, and we strive to make sure that artists can take advantage of all available outlets in order to build their fan base.

This is a big step for iHeartRadio and their listeners, and we’re excited about what this means for our artists moving forward.

February Industry Wrap-Up

The cold weather is slowly on its way out and SXSW is on the horizon – must be the end of February! That’s why we’re here to wind down the month in music industry happenings. Just because it was a short month doesn’t mean there was no action – read on to catch the latest on Facebook’s upcoming video ventures, collaboration among the YouTube and Google Play Music teams, and Spotify’s ‘sunny’ new parter.

 

Facebook to Introduce Longer-Form ‘Premium’ Music Video Content


As online videos become an even more integral part of marketing and promotion for artists – from major label mainstays to indie up-and-comers – competition to serve hungry fans continues to heat up among all the big name platforms. If you’ve been reading around, you know that Facebook is a key contender in its attempts to offer users exciting ways to consume video content, including it’s rolling out of Facebook Live which paid some big name creators to help promote the service in its early stages.

Recently, Facebook’s VP of Partnerships Dan Rose expressed their desire to begin offering ‘premium videos’, with content shifting into the 5-10 minute length. According to reports, Facebook will offer indie artists and labels the opportunity to test and create episodic content while being paid directly by Facebook in the early stages; Rose says the model will shift to a rev-share after that. With almost two billion users, Facebook remains a major platform for promoting and marketing musical content.

Like anything else surrounding the world of copyright and video content, Facebook is facing concerns from members of the music industry surrounding licensing. When you’re hoping to take a slice of YouTube’s market share, at the very least, a platform should have systems in place that protect copyright holders and ensure that they can be paid properly for the use of their works. Like YouTube’s Content ID system that allows TuneCore to help artists collect their sound recording revenue when their music is used in videos across the platform, sources say that Facebook is in the process of building a parallel copyright ID program. This will be crucial in the potential success of Facebook’s upcoming premium video plans, and it goes to show the importance being placed on protecting copyrighted work – good news for artists of all stripes!

 

Google Merges Play Music & YouTube Music Teams


This past month it was revealed to media outlets that the product teams in charge of directing YouTube Music and Google Play Music will be combined into a single unit. Confirmed by Google, a spokesperson said: “Music is very important to Google and we’re evaluating how to bring together our music offerings to deliver the best possible product for our users, music partners and artists. Nothing will change for users today and we’ll provide plenty of notice before any changes are made.”

What does this mean for artists? Well, we already know that independent music makers can make their music available on YouTube and Google Play via TuneCore, but with the platforms technically being under the same umbrella, this appears to be a play towards creating a better overall user experience for music consumers. As streaming services acquire new subscribers every day, access to independent music grows and artists are able to make themselves available to fans who use all different ‘preferred platforms’ for discovering new tunes.

There’s an array of possible reasons for this internal shift at one of the biggest media companies in the world – perhaps as a move to simplify in-app listening, and more interestingly, a way for Google to negotiate deals with artists and labels. Either way, users of both apps will be able to continue using them as normal for now, and it’s highly possible that artists can look forward to a simpler way to reach YouTube- and Google Play-loyal fans in the near future.

 

Spotify’s Latest Partner is … a Weather Company?


We all know that weather impacts our moods. We all also know that music can play a similar role. But how do listeners build playlists that capture any given climate?

Ever the forward-thinking streaming platform, Spotify announced in February that is partnering with weather reporting website AccuWeather to develop and launch a site called Climatune, offering playlists for various cities based on varying weather conditions. This comes after partnerships with modern apps and companies like Uber, Tinder and Headspace, and shows that Spotify has no intention of slowing down its pace of clever collaboration with those looking to bring music into the fold.

So instead of just throwing on Banarama on those sunny days or curling up to some Morrisey during a morning rainstorm, Climatune offers playlists to music fans based on the hours and hours of research in major cities pointing to habits of listeners based on the skies. For example, did you know that residents of Chicago get excited when it rains, causing a huge lift in happier music? Houston Spotify subscribers, on the other hand, boost their acoustic listening by 121% on rainy days.

While it remains to be seen just how many subscribers will utilize this cool new service, we here at TuneCore see it as just another interesting avenue for music discovery via the popularity of playlists.

TuneCore Partners With Pandora

TuneCore is excited to announce that we’ve officially partnered with Internet Radio powerhouse Pandora!

Pandora became a household name for music lovers in the United States, New Zealand and Australia as a revolutionary source for music discovery and carefully curated radio stations based on the artists its users love.

Now, they’ve launched their brand new Pandora Plus platform – a non-interactive subscription service (meaning Pandora selects the music being played next) free of ads that introduces features like replays, skipping more tracks, and offline station access.

Independent artists of all stripes have been asking TuneCore about access to Pandora for years, and now we’re thrilled to be able to offer an avenue of submission for music makers hoping to reach the Internet Radio service’s 78+ million users.

It’s important to note that while TuneCore Artists will now have the opportunity to submit as many releases as they’d like to Pandora, the service is still ultimately curated by Pandora, and we can therefore not guarantee that delivered content will go live on Pandora or Pandora Plus. Read more about delivery to Pandora here.

How do I get my music delivered to Pandora if I’m a first-time TuneCore Artist?

It’s simple – when getting ready to distribute your first release, make sure to ‘opt-in’ to Pandora when selecting which stores and platforms you would like your music delivered to.

I’ve already distributed a release(s) via TuneCore – how can I deliver it/them to Pandora?

To send in your previously TuneCore-distributed releases to Pandora for consideration, simply log in to your TuneCore account and visit the TuneCore Cart. Your releases have already been placed in the cart for “Pandora Store-Add”, all you need to do is complete the checkout process (if you have Store Automator, there is no action needed)!
Got more questions? Learn more about Pandora Plus or get in touch with our world class Artist Support team.

TuneCore Closes Out Strong Year of International Growth With Launch of TuneCore Italy

Streaming Is On The Rise Across All International Markets

BROOKLYN, NEW YORK – December 13, 2016 – TuneCore, the leading digital music distribution and publishing administration service provider, caps off a strong year of sustained and international growth with the announcement today of TuneCore Italy – the service provider’s fourth launch in the European market and sixth international expansion. Since the company’s inception in 2006, TuneCore artists worldwide have earned more than $783 million collectively from over 43.8 billion downloads and streams. As the only major global distribution service with a dedicated Italian offering, Tunecore.it features local content in the native language that caters to the Italian independent artist community.

As part of its continued commitment to support independent artists around the world, in 2016 TuneCore launched three international sites including TuneCore Germany (April 2016), TuneCore France (October 2016) and now, TuneCore Italy (December 2016).

TuneCore’s global expansion efforts have led to an overall increase in its year-to-date international customer base. Further, TuneCore’s local offerings in international markets have seen significant increases in customer growth, specifically in the France and Germany markets. TuneCore also identified Hip Hop and R&B/Soul as two of the fastest growing genres in each of its key international markets (U.S., Canada, UK, Australia, Germany and France). Additionally, TuneCore has seen the growing popularity of streaming reflected across its international markets, with a 340 percent year-over-year increase in streaming in Canada, as well as year-over-year increases in Australia (92 percent), Germany (71 percent) and the UK (67 percent). Streaming also continues to grow in the U.S., with a 65 percent year-over-year increase.

“As we head into 2017, global expansion is pivotal in furthering our mission to bring more music to more people worldwide, while continuing to establish TuneCore as a leader in the international digital music distribution market,” says Scott Ackerman, CEO at TuneCore. “Our global expansion into Italy – a market that previously lacked a dedicated local offering from a global distributor – is a natural fit as we continue to support our artists by giving them the local resources and tools they need to be successful.”

In addition to keeping 100 percent of their revenues, and retaining complete creative control and ownership of their music, Italian customers will have access to TuneCore’s robust portfolio of artist services, as well as local Italian partners such as Music Raiser and MusicOFF, and world-class customer service. TuneCore Italy artists can also opt to include their music in storefronts controlled by TuneCore’s extensive network of more than 150 digital partners across the globe, including iTunes, Spotify, Apple Music, Google Play and Amazon Music. In addition, TuneCore Italy customers will be able to take advantage of the company’s strategic partnership with Believe Digital. With an already existing office in Italy with more than 30 employees, Believe Digital will offer TuneCore Italy customers access to a variety of advanced artist services, such as international campaign management, trade and online digital marketing, video management and distribution, physical distribution and more.

With its expansion into Italy, TuneCore now offers local musicians in seven countries outside of the U.S. – UK, Australia, Canada, Japan, Germany, France, and Italy – the opportunity to collect revenue from streaming services, digital download stores, songwriter royalties, and sync licensing opportunities, all in their local currency.

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About TuneCore

TuneCore brings more music to more people, while helping musicians and songwriters increase money-earning opportunities and take charge of their own careers. The company has one of the highest artist revenue-generating music catalogs in the world, earning TuneCore Artists $783 million from over 43.8 billion downloads and streams since inception. TuneCore Music Distribution services help artists, labels and managers sell their music through iTunes, Apple Music, Spotify, Amazon Music, Google Play and other major download and streaming sites while retaining 100 percent of their sales revenue and rights for a low annual flat fee.

TuneCore Music Publishing Administration assists songwriters by administering their compositions through licensing, registration, world-wide royalty collections, and placement opportunities in film, TV, commercials, video games and more. The TuneCore Artist Services portal offers a suite of tools and services that enable artists to promote their craft, connect with fans, and get their music heard. TuneCore, part of Believe Digital Services, operates as an independent company and is headquartered in Brooklyn, NY with offices in Burbank, CA, Nashville, TN and Austin, TX, and global expansions in the UK, Australia, Japan, Canada, Germany and France. For additional information about TuneCore, please visit www.tunecore.com or https://youtu.be/TSjGACrJyiY.

September News From Our Store Partners

By Stefanie Flamm

Streaming isn’t going away anytime soon, and it seems like all of our store partners have been stepping up their game to better accommodate the rapidly-evolving music streaming industry:

  • Spotify shatters previous streaming records with 40 million active subscribers.
  • Apple Music gets a makeover in the wake of the iPhone 7 and iOS 10 launches.
  • Pop stars come in droves to perform at iHeartRadio’s Music Festival in Las Vegas.

Spotify celebrates the end of their third quarter with a massive 40 million subscribers.


Spotify broke both a personal and global record earlier this month by racking up an active subscriber count of 40 million users.

spotifyOn September 14th, Spotify CEO Daniel Ek tweeted a cool, “40 is the new 30. Million. (smiley face emoji)” to announce the good news officially. The “30” he’s referring to is the 30 million active subscribers they announced back in March of this year, meaning they’ve increased their listenership by a whopping 25% in six months.

These seriously impressive numbers can be attributed to a number of factors. While Spotify may not have the leg-up on exclusive content that Apple Music and TIDAL have, Spotify’s Discovery algorithm has become the bread-and-butter of their streaming service since they launched it in summer 2015. Acknowledging their immediate popularity, Spotify’s next move was to increase the accessibility for new music recommendations, and now users can add similar tracks to an existing playlist, or even immediately create a similar version of a complete playlist.

Competitors have been jumping on the bandwagon, each offering their own brand of new music discovery. But the numbers make it obvious that, for now, users prefer Spotify’s experience to some of their other competitors. Apple Music is currently boasting a listenership of 17 million, with TIDAL far behind at 3 million active listeners as of March 2016.

A huge congratulations to Spotify!

Apple Music gets some major touch-ups on iOS 10, including competitive algorithms for new music recommendations.


Tech gurus, developers, and especially owners of the 1 billion active Apple products worldwide have come to expect a big show every September at Apple’s Worldwide Developers Conference (WWDC). Since the launch of the iMac in 1998, Apple has treated the WWDC like a tech-savvy Christmas, rolling out the newest versions of their products, and convincing the world that we all need the latest and greatest products that Apple has to offer. So it should come as no surprise that this year’s WWDC brought some major changes to the future of the iPhone and Apple Music listener experience.

Apple introduced a total external overhaul of the iPhone, with the apple-musiciPhone 7 devoid of a headphone jack (welcome to a future of losing Airpods!). In addition to giving users an excuse to finally buy the bluetooth Beats headphones they’ve been eyeing, Apple Music got a makeover to improve user experience.

Jumping on the success of Spotify’s Discover Weekly playlists, Apple Music for iOS 10 includes a My New Music playlist that will update with fresh recommendations every week. Unlike Spotify, which updates every Monday, Apple Music’s My New Music will update on Fridays to coincide with New Music Friday. Where Spotify has Discover Weekly and Release Radar playlists, My New Music should kill two birds with one stone and offer users a playlist packed with new music.

Apple Music will also offer a My Favorites Mix, updated every Wednesday, complete with a blend of the user’s most-streamed songs, side-by-side with new music similar to the aforementioned tracks. My Favorites Mix was designed as a gentler way to ease into new music, versus digesting a playlist comprised entirely of unfamiliar songs.

It’s too early to see if this update will bring more users into the Apple Music camp, but it’s certainly a cool update for existing Apple Music subscribers.

iHeartRadio packs their La Vegas Music Festival with some of the top music acts, including Britney Spears and Ariana Grande.


Las Vegas was abound with pop stars last weekend for the iHeartRadio Music Festival, a two-day festival bringing together some of the most popular musicians in the US for a power-packed weekend.

iheartradio90’s nostalgic millennials were in heaven with performances from both Backstreet Boys, who who used the festival to announce their Las Vegas residency, and a blowout set by Britney Spears. Both groups performed a combination of throwback favorites, as well as some newer music. Usher, Lil Jon, and Ludacris also came out for a performance of “Yeah” that left the crowd wanting more of their favorite early 2000’s goodness.

The lineup didn’t stop there, as sets from Miley Cyrus, Drake, Sia, and Ariana Grande filled the two-day event at the T-Mobile Arena. Performing alongside Billy Idol, Miley told the audience, “It’s f**king good to be back.”

Christina Grimmie, who was shot and killed at her own concert earlier this year, was remembered in a memorial on the second night of the festival.

With the service’s recent five year anniversary, their reaching 90 millions registered users, and a potential Spotify-rival in the works, 2016 has turned out to be an excellent year for iHeartRadio, and the music festival seems like the perfect way to celebrate their success this year.

SOUND BYTES