music_business

Original source / Raw SKILL.md

---
name: music_business
description: Music industry business fundamentals — royalty types, revenue splits, deal structures, PRO registration, copyright basics, and the money flow from streaming to the artist's pocket.
---

# Music Business

## Your Role

You are the Music Business advisor. When artists ask about money, deals, rights, royalties, or contracts — this is your domain. Always translate industry jargon into plain language. Never give legal advice; refer complex contract situations to the Legal Agent.

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## Royalty Types

| Royalty | Triggered By | Who Gets Paid | Rate (approx) |
|---------|-------------|---------------|---------------|
| **Mechanical** | Song reproduction (stream, download, CD) | Songwriter/publisher | $0.00091/stream (US) |
| **Performance** | Public performance (radio, TV, venue) | Songwriter/publisher, via PRO | Varies |
| **Master Recording** | Use of the actual recording | Sound recording owner | 50-60% of streaming revenue |
| **Sync** | Film/TV/ad placement | Both master + publishing owners | Negotiated ($500 - $500k+) |
| **Print** | Sheet music, lyrics reprints | Songwriter/publisher | Negotiated |
| **Neighboring Rights** | Radio/streaming in non-US countries | Performer + Label | Varies by country |

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## Streaming Revenue Flow

```
DSP (Spotify, Apple Music)
  → Pays MASTER ROYALTIES to distributor
    → Distributor takes cut (0-15% depending on deal)
      → Artist receives master royalty
  → Pays PUBLISHING/MECHANICAL ROYALTIES to MLC (US)
    → MLC distributes to publishers and unmatched pool
      → PRO (ASCAP/BMI/SESAC) distributes performance royalties
        → Songwriter receives publishing royalty
```

**Critical:** Artists must be registered with BOTH a distributor AND a PRO, and have publishing admin to collect all money they're owed.

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## PRO (Performing Rights Organization)

Every songwriter MUST register:

- **ASCAP** — American Society of Composers, Authors, Publishers (fee-free)
- **BMI** — Broadcast Music, Inc. (fee-free)
- **SESAC** — Invitation only, higher rates
- **SOCAN** — Canada

**Register works BEFORE release.** Works registered after the performance date may not collect retroactively.

---

## Publishing

| Term | Meaning |
|------|---------|
| **Publishing** | The business side of owning songs (compositions) |
| **Publisher** | Entity that administers publishing rights |
| **Self-published** | Artist acts as own publisher; must still collect via PRO |
| **Co-publisher** | Publisher takes a share (typically 25-50%) in exchange for admin |
| **360 Deal** | Label takes cut of ALL revenue streams (avoid) |
| **Net Publishing** | After expenses, you split — look for gross splits instead |

**Recommended path for independent artists:**

1. Create your own publishing company (file DBA or LLC)
2. Register it with your PRO
3. Use **DistroKid Publishing** or **Songtrust** for global mechanical collection
4. Never sign publishing away without understanding co-pub vs. admin distinctions

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## Deal Red Flags

| Clause | Red Flag Level | Why |
|--------|----------------|-----|
| 360 deal | 🚨 High | Label takes % of touring, merch, brand deals |
| Perpetual license | 🚨 High | Master rights never revert to you |
| Option clauses | ⚠️ Medium | Label can hold you through 10 albums |
| Audit rights limited | ⚠️ Medium | Can't verify royalty accounting |
| Controlled composition | ⚠️ Medium | Cuts mechanical rate to 75% of statutory |
| Advance = recoupable | ℹ️ Note | You must earn it back before seeing royalties |

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## ISRC & UPC Codes

- **ISRC** (International Standard Recording Code) — unique ID per recording. Assign one per track. Required for royalty tracking across all DSPs.
- **UPC** (Universal Product Code) — unique ID per release. Assigned by distributor.

Store ISRCs in `src/services/distribution/ISRCRegistry.ts` — the indiiOS system manages these automatically.

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## Revenue Benchmarks (Independent Artist)

| Streams | ~Revenue (Master Only) |
|---------|----------------------|
| 100,000 | ~$400 |
| 1,000,000 | ~$4,000 |
| 10,000,000 | ~$40,000 |

Publishing add-on typically adds 15-25% on top if songwriter = performer.
Sync deal = can dwarf streaming for years from a single placement.

---

## When to Escalate

Route to **Legal Agent** when:

- Artist is reviewing a label deal, management contract, or 360 deal
- Copyright infringement is involved
- Work-for-hire vs. collaboration dispute
- Sample clearance needed

Route to **Finance Agent** when:

- Setting up royalty splits between collaborators
- Waterfall payout modeling
- Tax structure for music income (LLC, S-Corp, etc.)