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A Record Distribution Test
by Christopher Knab - Fourfront
Media & Music - June
2002
Back to Music
Business 101
I have something different for you this month. Instead of writing about
the subject of record distribution, and how labels, distributors, and music retailers work together, I have come
up with a True/False and Multiple Choice test for you to take.
I have ulterior motives for this approach. I am always amazed how many well intentioned, yet supremely business
naïve, musicians exist in the world. For 10 years now I have been writing articles, columns, and books related
to the business of music. I am hardly alone in this endeavor. There are now countless websites, publications, workshops,
and conferences dedicated to helping independent musicians learn how the music business operates, yet countless
acts try to establish themselves by remaining ignorant of how the distribution and selling of their music actually
works.
So, here is a test that will give you some very important clues about the types of deals that exist between labels,
distributors and music retailers; as well as some insights into the preparation plans for marketing music products.
I hope that it inspires you to learn more about the very business that will or will not help you sell the music
you have invested so much time and money in.
If you would like the answers to these questions, just email me at chris@chrisknab.net and I will email
them back to you. By the way many of these questions can be answered in such books as: The Musicians Business and
Legal Guide, 3rd edition, published by Prentice/Hall (which I contributed a chapter to along with my co-author
Bartley F. Day) and my own book, Music
Is Your Business.
One of my best teachers in college told me once that he liked his students to feel somewhat intimidated about the
subject at hand because he found that it made them pay more attention in class and more eager to learn. I hope
this test has the same affect on you.
Cheers!
The following questions are True or False statements, or
Multiple Choice questions.
1. ‘Marketing
Management’ is a term that describes when and how a product will be presented to consumers, and organizations that
deal with consumers. True or False?
2. ___________
are businesses that service the record departments in national and regional mass merchandise stores, such as Target,
Sears, and others.
a. One Stops.
b. Rackjobbers
c. Indie Distributors
d. Retailers
3. _________________ means that product is placed in a music
retailer where the consumer can see it easily, as well as purchase it at a price that will entice them to purchase
it.
a. Sell In
b. Price and Position
c. Point of Purchase
d. Displays
4. When an artist brings in their record to a retailer and sells
it to them, but gets paid only after it sells; this is known as:
a. distribution
b. consignment
c. discounting
d. dating
5. One Stop
Distributors usually service non-music chain retailers, like mom and pop and alternative record stores. True or
False?
6. Which of
the following persons is the main contact between a record label’s distribution company and the record label?.
a. President of the Record Label
b. The Vice President of Marketing at a Label
c. The Label Liaison
d. Director of Sales at a Record Label
7. Label Marketing
Reps are field representatives assigned to market all product that the label releases, or are assigned specific
types of music to market. True or False?
8. A Label Marketing
Rep for a major label may contact 40 or 50 store buyers, clerks and store managers weekly. True or False?
9. The best
way to determine how many CD’s and Tapes to initially manufacture is to:
a. examine the current fanbase of support of the artist
b. take a guess
c. look for the cheapest package deal you can find
d. let your distributor decide
10. ________________ is a distributor who sells labels which
primarily are not owned or substantially controlled by the distributor. Generally they will maintain an inventory
on the entire catalog of every label they sell.
a. Branch Distributor
b. Rackjobber
c. Independent Distributor
d. One Stop Distributor
e. Chain Store
11. When estimating how many CD’s or Tapes to manufacture, what
percent of the initial pressing will generally be used for “free goods” to help promote the release?
a. 15%
b. 20%
c. 70%
d. 10%
12. An old saying
about the music business is “Distributors “carry records’, record labels “sell” records”. True or False?
13. Sell Through
is the point at which a record is bought by a customer from a retailer. True or False?
14. Sell In
is the point at which a record is sold by a distributor to a retailer. True or False?
15. _______________is
the term that refers to a commitment made by a retailer to purchase a certain amount of product in exchange for
a media ad of some kind that advertises a particular recording on sale at a store for a particular price.
a. POP
b. Dating
c. Coop Advertising
d. Discounting
16. About 85
to 90% of record sales through retail accounts is done by 20 or fewer accounts. True or False?
17. Retailers
who purchase product in “Box Lots” pay the same price for those records as retailers who buy product in lesser
quantities. True or False?
18. The term
‘incentives’ means deals offered to retailers to purchase recorded products, such as discounts. or delayed billing.
True or False?
19. Labels usually
introduce new artists to the public at reduced list prices. True or False?
20. An artist
or band’s name should always be near the bottom 1/3rd of a CD cover. True or False?
21. Always send
out ‘promo copies’ to radio, the press, and distributors as ‘cleans’ (product that has not had the barcode area
‘punched-out’). True or False?
22. “Dating”
is the term used by a record label when working with distributors and retailers, to help retailers with the payment
of invoices due for product sold. True or False?
23. Perhaps
the most important first step in preparing a marketing plan is to listen to the music repeatedly. True or False?
24. Advances
in computer software technologies have not affected the business relationship between distributors and retailers.
True or False?
25. The first
exposure that a gatekeeper in the music business has for a new CD or tape is the listening experience, or the music
itself. True or False?
26. ‘Non-traditional’
music retailers (such as bookstores, and mass merchandisers) are no longer playing a significant role in the selling
of music product today. True or False?
27. Barcodes
must be on any music product that intends to be sold in major record chain stores. True or False?
28. Catalog
numbers should appear on the spine of a CD/Record/Tape. True or False?
29. Independent
labels usually want to affiliate with major labels so that they no longer have to worry about selling any of their
product to distributors and retailers. True or False?
30. Affiliating
with a major label can maximize the likelihood of the independent label getting paid for records sold, because
the major label’s distribution companies have the strong financial backing of their parent companies. True or False?
31. One question
for an independent label to ask a major label when they are considering a business relationship with them is: “Will
the major label distribute to mom and pop stores?” True or False?
32. The strategy
of selling directly to a band’s music fans over the Internet is best left to the major labels. True or False?
33. It doesn’t
matter if an independent label’s personal style of doing business matches with the major label’s style, because
the major labels run their businesses more successfully than independent labels. True or False?
34. A P&D
deal stands for:
a. Production and Development
b. Producing and Directing
c. Pressing and Distribution
d. Preparing and Discovering
35. Before entering
into any type of deal with a major label, the independent label must check it’s contract with the artists on their
label, to be sure they have the permission to do so. True or False?
36. In most
deals between independent labels and major labels , the ____________determines how many records will be manufactured?
a. major label
b. independent label
c. distributor
d. retailer
37. In a P&D
deal the major label pays for the recording costs of the independent project. True or False?
38. P&D
deals are currently the most common type of deal between indies and majors. True or False?
39. In a P&D
deal the independent label usually retains control over the content of songs, the design, and copy of artwork,
and the content of promotional and advertising material. True or False?
40. In a P&D
deal the ownership of the masters is handed over to the major labels by the independent label. True or False?
41. In a Production
deal it is to the advantage of the major label to recoup any advances on an artist-by-artist basis. True or False?
42. A “reserve
clause” is a clause stating that a portion of the records sold by a label to distributors and stores can be held
back until the label is sure that they have all been sold before paying any royalties on them. True or False?
43. In a P&D
deal the independent label should seek a clause that specifies what percentage of manufactured records can be distributed
for free. True or False?
44. “Fulfillment
deals” are deals in which the major label agrees only to fulfill orders coming in from retailers of the independent
label’s releases. True or False?
45. A _____________is
most likely to be the type of distributor who accounts for most sales of hit records once sales have topped the
million sales mark.
a. mom and pop retailer
b. rackjobber
c. mass merchandiser
d. chain store
46. A distributor
is more likely to get involved with an independent label when the independent label has a flow of new product going
out into the marketplace. True or False?
47. In a Joint
Venture deal, the major label fronts all the operating costs, and the indie and the major then share the gross
profits of the joint venture. True or False?
48. POP’s are
bins full of low priced CDs placed at the end of a row of records at a record store. True or False?
49. In a Fulfillment
deal the major label presses the records and ships them to the independent label’s usual independent distributors.
True or False?
50. In a Piggyback
deal an independent label without sufficient leverage to obtain a deal of their own with a distributor “piggybacks”
onto another independent label’s existing deal with a distributor. True or False?
-----
Christopher Knab is an independent music business consultant based in Seattle, Washington. He
is available for private consultations on promoting and marketing independent music, and can be reached by email at: chris@chrisknab.net
Chris Knab's new book, 'Music Is Your Business'
is available NOW from the Music Biz Academy bookstore.
Visit the FourFront Media and
Music website for more information on the business of music from
Christopher Knab. |
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