Wendy DayCEO/Coach, PowerPlays Coaching, LLC · Helping rappers make money with their music. Building millionaires in the urban music industry since 1992.

WTF is a PPD...? check out the full episode

20 Aug 2024 · 1 min

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Record labels use PPD (price per dealership) to calculate what artists owe them from sales. A 2% PPD claim becomes a 10% cut of streaming revenue because labels multiply the percentage by five. This conversion method, started by Universal, is now standard across the industry.

Chapters

On the master side, the labels cannot own a piece of the new recording. Most recording artists have a contract with the label. You have to deliver that master without anyone else owning that master. So the labels usually get a recoupable advance against a percentage of PPD. What's PPD? It's price per dealership, which is almost irrelevant since there's limited numbers of vinyl and CDs, but people still do do that.— but it could be affected on the download. But then you have to come up with a different value for streaming 'cause streaming has a different value. That is a percentage of usually artist net receipts for that additional value. The equation is usually a multiple of 5. For example, if the sampled master holder says, "I want 2% of PPD for those digital downloads or for the hard configuration," the percentage for streaming would be 2 times 5 or 10% of artist net receipts. Universal came up with that equation and everyone pretty much follows suit.