- Advance
- An upfront payment made against future royalties. The payer recoups it from your income before you receive further royalties. You usually keep ownership.
- Artist royalty
- The percentage of recording income a label pays the artist under a record contract. It can be sold even if the label owns the masters.
- Catalog
- The collection of songs and/or recordings that an artist, songwriter, producer or company owns or controls.
- Chain of title
- The documents that prove who owns a right and how ownership passed from creator to current owner.
- Co-publishing deal
- A deal where the songwriter keeps part of the publisher's share and the publisher takes the rest in exchange for services and often an advance.
- Collecting society (PRO)
- An organization that collects royalties for public performance or reproduction, such as SGAE, PRS, ASCAP or BMI.
- Cross-collateralization
- When income from one deal is used to recoup advances from another deal with the same company.
- DCF (discounted cash flow)
- A valuation method that forecasts future income year by year and discounts it to today's value.
- Decay
- How quickly a catalog's income falls as songs get older. Low decay means stable income and higher value.
- Due diligence
- The buyer's detailed review of statements, contracts and rights before closing a deal.
- ISRC
- The unique code that identifies a specific sound recording.
- ISWC
- The unique code that identifies a musical composition.
- Letter of intent (LOI)
- A document that sets out the main terms of a deal and usually a period of exclusivity before the final contract.
- Masters
- The sound recordings themselves. Whoever owns the masters earns income when those exact recordings are used.
- Mechanical royalties
- Royalties paid for reproducing a composition, including on-demand streams and downloads.
- Multiple
- The number by which annual net income is multiplied to estimate a catalog's value.
- NDA
- A non-disclosure agreement that protects the confidential information shared during a deal.
- Neighbouring rights
- Royalties paid to performers and recording owners when recordings are broadcast or played in public.
- The publishing income the owner actually keeps after paying writers and administrators. Buyers value publishing catalogs on it.
- Partial sale
- Selling a percentage of a catalog, or selected songs, while keeping the rest.
- Publishing rights
- The rights in the composition itself (melody and lyrics), owned by songwriters and their publishers.
- Recoupment
- The process by which an advance is paid back from your future royalties.
- Reversion
- When rights return to the original owner after a set period or under certain conditions.
- Split sheet
- A signed document that records each writer's percentage of a song.
- Sync
- Licensing music for use with images, such as film, TV, advertising or video games.
- The portion of publishing income that belongs to the songwriter personally.
Music catalog glossary
The key terms you'll hear when selling, licensing or financing a music catalog, explained in plain language.