Copyright Rights Demystified: A Practical Guide to Copyright Licensing, Part Trés

Ok, my soon-to-be copyright gurus, we’re half way through our riveting discussion of the separate rights that come with each copyright!  Today’s amazing break down covers a right that is fairly new to the Copyright Act: the right to public performance via digital transmission. 

Though a newer addition to our law, since this new rights initial inception into the Act in the 1990’s, it has been the subject of constant debate.  The most memorable recent debate is one most of the public is actually familiar with; the settlement between webcasters and the RIAA.  Just in case you’re not into reading Congressional rulings, here’s the skinny: fees for public performance were wiping out webcasters left and right, basically making it impossible for them to exist profitably as a business.  This was because, before the settlement, a webcaster had to pay a fee each time a song was played, and for each user that was playing it.  Although that fee was mere hundredths of a penny, it adds up FAST.  Let’s do a quick math problem: 15 songs per hour (approx 4 minutes/song), and let’s say 100,000 people are listening to a webcasted station at a given moment.  I can’t remember the exact old fee, but let’s say it is .007 cents.  That’s a whopping $10,500 PER HOUR for a webcaster!!  Hell, even if I completely off and it is $1,500, that’s still astronomical.  According to this article, under the old fee arrangement, even giants like Pandora were sending about 75% of their revenue straight out the door for this licensing fee.  And to add insult to injury, we’ve officially approached a time in history where no one wants to pay anything for music, leaving webcasters to rely solely on advertising income to stay afloat.  The system was clearly broken.

Luckily, after years of negotiation, a settlement was reached.  I won’t get into the nitty gritty of the exact figures (truth be told, I’m having a bit of trouble finding them online), but the fees are now structured around a percentage of revenues that increases with revenue size (i.e. Pandora pays more than your local radio station that simultaneously webcasts).  Also, content providers should not that subscription stations have different rates – in fact, there are quite a few different rates based on the type of digital broadcast you’re providing.  I would highly recommend spending some time on Sound Exchange, particularly in the FAQ (for both content providers and content owners) and in the Service Provider and Owner sections, respectively. 

Besides the fees themselves, the most important thing to ask is: Who is getting paid?  Well, this particular right belongs to the owners of sound recordings – not the owners of the songs themselves, who get paid under the Public Performance Rights that we discussed last time.  Thus, it’s mostly record labels that are seeing the benefit of this moolah, although there are some artists that have retained the rights to their sound recordings, particularly in the hip hop industry.  Sound Exchange is basically the “PRO” of sound recordings; much like ASCAP, BMI and SESAC oversee payment directly to publishers and songwriters, so Sound Exchange oversees the payment of royalties to the owners of sound recordings. 

PLEASE NOTE: if you are an artist and your own your own recordings (most likely where you are NOT signed to a label), you should register with Sound Exchange here.  Much like the PROs, Sound Exchange has a complex system for tracking plays of recordings and may have money for you!!  So get on the ball, people.

As a final note, I would like to briefly address the Performance Rights Act, which would essentially extend the “digital” rights to terrestrial radio… aka “regular” radio.  It is currently stalled up Capital Hill.  You may have heard some PSAs (Public Service Announcements) regarding this possible amendment, which essentially threaten to start charging people for radio and incorrectly label it a “tax” on radio.  I am not taking an official position on this, but you should note two bias things here: 1) these commercials were paid for by the broadcast industry, who are the direct targets of these new proposed fees; 2) the original proposal regarding payment on sound recordings was meant to encompass both analogue and digital broadcasts, but as a result of a tremendous lobbying effort by the broadcasters, it was limited to “digital” transmissions.  On the flip side of the coin, here is an article opposing the Act, and some perfectly logical reason supporting the proposition.

So there’s your crash course in digital transmissions.  Hopefully I’ll be able to button it all up real nice for you later this week when we round out with the last two rights: public display and derivative works.  As always, please feel free to email me directly @ shannon@newleaflegal.com

www.newleaflegal.com                  

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MySpace Tries to Get It's Brand Back... Good Luck.

I'm not going to lie; I jumped on the MySpace bandwagon when it was all the rage a few years ago. And as much as it kills me to admit it, I haven't deleted my account, and, to the best of my knowledge, MySpace hasn't either. There's something sacred in deleting a social network account or a blog.... I've got this mental block that it just seems "wrong." Either way, I log on every few months to get it another chance, and am constantly disappointed at the cess pool of social media laid out before mine eyes. MySpace is a complete disaster. It's covered in flashy, annoying ads that just scream "cheap!!!", and it's filled with unsavory characters. Tell me I'm wrong; I dare you. So how did MySpace get here? And can they fix it?

Apparently, they're going to try. According to that little blip, MySpace is attempting to get it's brand back my focusing more on music, videos and games.

I'm not really sure how this will help the brand recover. The issue wasn't necessarily content (although I've seen enough pics of people in their bathrooms trying to look sexy to last me a lifetime, thank you), but functionality and the AWFUL ads/spam. MySpace is still a place for music, and many bands and music professionals alike still swear you still need a MySpace page. I'm on the fence about this, because MySpace's search function is so band that it severs limited to ability of fans to FIND music that they might actually like. Instead, users are stuck fumbling around with random key words that MIGHT be the title of a band or song they like. For example, if I like metal, I should probably type in "Guitars of Death Steel," or "Apocalypse Babies" and hope for the best. There's no intuitive way to find music related to bands that you like. Sure, there are "genres," but how often do you look up a band you like and go "What the hell?? They're not [insert genre]!" Maybe I simply haven't played around with it enough to find the niche, but should I have to?

Moving on to videos and games, it's still going to be an uphill battle. YouTube has established itself as the top go-to for videos... what is MySpace's "hook" to top that? And what's the approach to gaming? Is is casual gaming a la Yahoo! Games? Or bigger, downloadable stuff a la Gametap? Either way, they're going to have to prove to users that not only have they cleaned up their brand (hurdle #1), but also that their services are BETTER than what's currently out there (hurdle #2). Can they do it? I'm not so sure, but I'm willing to hang on to m profile for a bit longer to find out.

New Liberty Featured on Roadrunner Records Site!

Working with bands is hands-down my favorite part about being an entertainment attorney. I really admire the amazing stamina that band members show and the drive they have to succeed. And you know what? It's really freakin' difficult. It can be especially awful when you KNOW you and your bandmates have the will and the ability to succeed, and you just haven't been in the right place at the right time. Then, POOF! Someone recognizes your talent, and you're riding on a cloud to celebrate that accomplishment (as well you should!).

I am honored to represent a band by the name of New Liberty. To me, they have the whole package; not only is their music well put together and catchy, but their live performances are full of energy and personality. On top of that, they are some of the hardest working guys in the music business right now, and have the business-savvy and the determination that it takes to make it in this industry. They've been working tirelessly to attract the attention of labels and booking agents alike, and they're getting some great feedback. One of the best so far as has been an acknowledgment by Roadrunner Records, who have prominently featured New Liberty's song "Blue 42" on their A&R site. How do you get on their? Roadrunner reps have to dig your stuff - that's the ONLY way. So congrats, guys - and a huge shout out to Roadrunner for digging the music! Rock on.

Stroke of Genuis: UK Antitrust Body Say Ticketmaster/LiveNation Merger May Hurt Competition

In an announcement that surprises... um... NO ONE...The UK Antitrust Body announced today that the Ticketmaster/LiveNation merger would stifle competition in Europe's concert and ticket market, and suggested alternatives that basically force the two to work separately. Thank. The. LORD! my question is: why has this situation proceeded as far as this? Why is the FTC still wavering on this and debating??

I'm sorry, but this situation just makes me so angry. Anyone can look around their city and see that nearly ALL the venues are ruled by LiveNation, which means indie bands can only get into a handful of small venues, many of which are just bars with a stage. There's no branding or genre-specific indie venues, which means getting repeat customers is difficult. In this economy, people will only spend money on luxury items like concerts tickets if they know what they're going to get; do you think teens and 20-somethings are going to take a risk on a band they haven't heard if that venue serves every genre? But I digress.

The point is, the music industry is imploding from the inside out, and the only way it can carry only successfully to the next generation is too allow the next generation (i.e. new/baby/indie acts) to thrive. They need access to venues and they need people at shows. No money = no equipment, no play. It's not rocket science.

I'm Speaking on a Music Industry Panel - Sweet!

Attention all Boston Artists/Entertainers! I am honored to announce I will be speaking on a music industry panel on October 27th at Vlora Restaurant and Wine Bar in Copley Square on October 27th. The panel is being put on by the Boston Songwriting, Production and Performance Group, and will feature myself, music producer Evan Shapiro, and music industry marketing expert Scott Feldman. Topics will vary by expertise, and I will personally be addressing legal issues surrounding personal management agreements and music licensing/placement agreements. Details be found here:

http://www.meetup.com/The-Boston-Songwriting-Production-Performance-Group/calendar/11541024/

The event is FREE and is sure to be a good educational and networking opportunity. I hope you'll join me and help make this event a success.

Kickstarter a Great Option for Indie Artists

Alright artists - calling all filmmakers, musicians, designers, ALL artists - you guys need to check out Kickstarter.com I don't want my blog to be a substitute to visiting the site, so make sure you go there and give them the traffic. But in a nutshell, it's a micro-financing site for creatives and their projects, allowing users to pledge and fund thee projects as they see fit. Artists, you are entrepreneurs and innovators - get in on this! Get funding @ the same time as you're spreading word about your creative endeavors. God's speed, may the force with you, na-noo-na-noo.

Songs v. Recorded Music, or Artists v. Labels

In my line of work, I do quite a bit of copyright consulting for my customers, many of whom are musicians. My approach to copyright registration is more "teach a man to fish" than "give a man a fish"; as an integral part of their careers, I think artists should be empowered to learn how to register and manage their copyrights. This is especially important if the artist later signs with a label or a publishing company, who may be administering the copyright on the artist's behalf. An artist needs to be able to read royalty statements and understand which copyrights are generating which type of income.

Tied to this, I frequently hit a road block when I talk to musicians about recorded music. Every piece of recorded music actually embodies two separate copyrights - one for the actual "song" and one for the actual "recording" or "master." For example, if you would like to record your own version of a song, you need only license the copyrights associated with the "song" itself, not the recording. However, if you wish to sample a bit of recorded music, you must license both copyrights associated with the "song" and the "master."

Enter the issue of contention between Artists and Labels: when an artist signs a recording agreement, they retain the copyrights to the songs (subject to any publishing agreement they may have signed), but any recordings made of the songs under the label belong to the LABEL. This is an unfortunate industry standard that very few artists have been able to avoid. Case in point: British artist Calvin Harris lashed out on Twitter when YouTube removed a music video of his song that he posted himself. The article cites that the copyrigt claim was most likely put forward by BPI, a representative for the recorded music industry. Recorded music = labels. I can totally understand why Calvin Harris is pissed off, but my assumption here is that he probably doesn't own the rights to the masters; his label does. This disconnect in copyright ownership creates inherent and added friction to the already strained relationships between artists and labels.

So how can we stop this? There needs to be a balance here. If the recording industry wants to keep the standard of owning masters (which I'm sure they do), they should be extending licenses back to artists to promote their recorded own work. Artists extend that right to labels by licensing their name and likeness for labels to use for promotional purposes, so license should be reciprocated. The idea that an artist can't post their own recorded music on a FREE site for their own promotional purposes is simply ludicrous. In this digitally driven world, there needs to be new and reasonable standards for labels. After all, in the words of Calvin Harris, "it's my fucking song you absolute bastards."