Music Business Terms Everyone Must Know

Have you ever been among a group of people who use terms you are supposed to know? What did you do? Did you act like me and pretend you understood perfectly? I remember my time at primary school when a would teacher use big words to describe a situation and everyone else would appear to know until I discovered the truth at break time.

It can still be like this in the music business especially when digital sectors are discussed. So in this article I want to help us understand certain terms used. They are:

1. Bundling and Unbundling: Bundling is when tracks available for download have to be purchased as an album/EP. It means you have to buy the whole "Bundle" or nothing at all. Unbundling means that the music owners have made it possible to buy one or any number of tracks from the same album/EP without the requirement to purchase the whole release.

2. Bundle: this term is used to describe a tie up of music to other services. For example Universal Music Group had a deal with a bank in France where young people requiring a credit card can also have a music service. That is a "Bundle" because it ties up financial services with music.

3. Re-Bundle: This term is used where an artist puts together high value packages by selling all they have as one package. I.e. an artist may sell a package that includes a CD, T-Shirt, DVD, Concert Ticket all at one price to their fans instead of selling the same items through various outlets. This is particularly useful where the artist has a good database of fans.

4. A la Carte: this is a process where the consumers choose what they want from different genres. So what iTunes offers is typically an A la Carte service because those who purchase from their stores can have the pleasure of choosing from anywhere in the store to make up their order.

5. Streaming: in terms of music, streaming is where you are listening to music as it is been delivered by the provider. It is distinctly different from a download, where you transfer the complete track/album to a listening device/pc/storage before you listen to the content. Where streaming is offered you cannot download the content (legally).

6. Subscription: this is a new business model that allows the consumer to listen to as much unlimited music per month for a monthly fee. It is the type of service Spotify offers.

7. Ad-funded Model: this is a type of service that shares revenue with content providers. I.e. Spotify has adverts running before the music is played. The advertisers pay Spotify to play the ad and Spotify in turn share this revenue with the music owners.

8. Music on Demand: The ability to be able to listen to, play back or watch high quality content as soon as the play button is pressed. The recent technological development of bandwidth has made this possible.

How Do Contracts Stop Selective Memory?

Why do many people in the music industry make the same mistakes that eventually cost them thousands if not millions of dollars?

Many recording artists, managers and independent record labels are putting their careers and business agreements in jeopardy. They are meeting the right people, and they come to reasonable compromises with their business associates. They think that they have a deal completed, but they usually forget one major ingredient.

What Is The Missing Ingredient?

They do not put their business agreements in writing. If you do not have a contract for your business agreement, it usually does not exist in most situations especially in the music industry. You should always have a contract for all of your music industry related business agreements and compromises.

How Does A Contract Protect Me?

A contract protects you if your business associate does not remember making a commitment to you or your company. Anyone can totally deny a handshake agreement when it is convenient for the person to do so. A convenient loss of memory cannot help a person deny an agreement when you have his/her signature on a contract.

You need to understand a few important things when it comes to selective memory and contracts.


Many people in the music industry will make you small promises. These promises will not require contracts. You will be in an inferior position because you must depend on a person keeping his/her word.

Are Your Prepared For The Worst?

In these situations, you should always expect to be lied to. You are now mentally and emotionally prepared for disappointment if your business associate does not deliver on a promise when you do not expect him/her to. You are prepared to find another solution for your problems if things go wrong when you are always prepared for the worst case scenario.

The Good News

If you are prepared for the worse, you can only be surprised when a person in the music industry keeps his word. Enough people will lie to you that you will enjoy when you are pleasantly surprised.


A contract only proves that you and your business partner have an agreement. It does not make anyone fulfill their contract obligations. People might still attempt to back out of your business agreements with them.

New Flash: The Length And Wording Of A Contract Does Not Matter!

Some people have the wrong idea about contracts. It does not matter if you have a contract with complicated legal terms, or you sign a simple, straight to the point contract. If people want to break their business agreements, they will do it.

Contracts Do Not Stop Crooks From Being Crooks

A thief will still attempt to steal from you even when he/she signed a contract saying that he/she cannot. A person might attempt to get out of his/her contract ahead of time even when the contact has a specific time limit.