Friday, August 24, 2007
By Brian Corber - 07/31/2007 - 04:41 PM MDT
Many of you who write music may have questions about the business side of things.
You’ve probably heard the term “PRO” bandied about. In the music biz, it’s not a short reference to the degree of talent of a musician or other music creator.
So, what’s a PRO? It’s a performance rights organization. It administers part of the copyright in music. Music is a different kettle of fish from other kinds of creative endeavors. When you write a novel, you submit it to a book publisher, who then prints up a lot of copies and sells them in stores or on-line. Royalties payable for the novel are administered and paid to you, the novelist, by your publisher as a general rule.
A movie, as another example can have many aspects of it which generate royalties or payments, however, there is, as to the movie as a whole, only one copyright and the royalties paid attributable to that copyright are usually administered by the distributor of the film or their assignee. From there the money can go to a number of payees depending on individual contracts or master contracts (like with the Screen Actors Guild or other such organization), and ultimately, in theory at least, the money reaches the individual artist (like an actor in a film).
With music, when you create music you also create a copyright embedded within. However, under the law, you cannot protect that copyright unless you register it with the Registrar of Copyrights in D.C.; at least under the U.S. Copyright Law. This is the first thing people don’t understand: yes, the copyright comes into being along with the original creative work, but you cannot protect it legally without registration with D.C. Why? The law says so.
How do you protect copyrights? In the final analysis, you sue people if they infringe (or stomp) on your music and its embedded copyright. And you can only file that lawsuit in a United States District Court. Why? Again, the law says so. And if you do file a lawsuit you have to put it right there clear as day right in the “allegations” of the lawsuit that you registered a copyright in the work in question with the Registrar and “here’s the registration number and the registration date.” Why? Again, the rules for filing lawsuits in federal court say so. On top of that, there’s a rule that says you have to give notice of your copyright infringement lawsuit to the U.S. Copyright Office. Okay, that’s copyright law in a nutshell.
So what is it that PROs do? Well, look at the copyright in your music like a multi-layer cream pie. And you can slice and dice that pie any way you want.
PROs administer a piece of the pie called the performance royalty. That’s only a piece, not the whole pie. And what do they do with that? They sell a license (a right contained in that slice of pie to something like a broadcaster: a radio broadcast station or network, TV or cable broadcast network or station or now, a webcaster with a website on the world wide web; what they’re really selling is a “do not get sued” card when that broadcaster broadcasts (or in some way, “uses”) your music to the public.
Here’s the trick: if there’s no registration of the copyright with D.C., you (the copyright owner) cannot sue the broadcaster anyway for infringement (i.e.: broadcasting your music without your consent). So, one of the great illusions about how PROs operate: not all of the musical selections they administer in their repertories have been registered with D.C. So, this is rather sneaky: the PRO is selling something to a broadcaster it doesn’t have. But, everybody seems to go along with it anyway because everyone assumes that if the PRO says it’s in its repertory, then all assume that the PRO has all the rights necessary to effect the license.
So, that is, in a nutshell how copyright dovetails with how PROs work.
Do PROs administer all of the copyright? No, only a specific slice of the copyright pie. There is another big slice called a “mechanical” which is usually the rights you have in a sound recording made of the music you created. That royalty is usually administered by the record label on which the recording was made, or its assignee, which could be the Harry Fox Agency for the United States. Mechanical royalties are the kinds of royalties made when a copy of the music on a sound recording is sold, usually at retail, either in the form of a physical disc of some kind, physical tape of some kind, or, these days, by way of a download of the music over the internet from a provider to a consumer.
This is all a rather simplistic explanation, but essentially this is how the copyright pie is split.
It becomes more complex when you’re looking at the international distribution or broadcasting of music since some countries, like France, have something called a broadcast-mechanical which is a little bit of a performance royalty and a little bit of a mechanical royalty. Here’s how that can work: broadcaster plays your music over its network. Broadcaster pays a license fee to SACEM (the French equivalent to ASCAP). SACEM splits it up. The performance royalty ultimately payable to you is, finally, after a time period, paid over by SACEM to your PRO here in the USA. Let’s say, ASCAP. ASCAP doesn’t get any part of the mechanical. ASCAP doesn’t even know, so I’ve been told, what the gross amount of the royalty paid by the broadcaster was. ASCAP gets a net payment from SACEM, takes its cut off the top and then pays you the rest, theoretically.
Where does the mechanical go? SACEM pays that directly to the “sub-publisher” of the music in France who represents the USA domestic publisher of the music and that sub-pub pays the mechanical to the USA pub. And here’s a kicker: the USA pub pockets the money and doesn’t report it to anyone else--like you.
No wonder your head swims when someone wants to discuss the business side of the music business.
And things are going to get more complex. Those who perform music get a piece of the action when a webcaster webcasts music (the webcaster pays a royalty to SoundExchange which then supposedly pays artists but SeX doesn’t represent artists, it represents its constituent labels, the big record labels). Music performers now want a piece of the action on revenue from radio broadcasts of music.
Now, my head is swimming and I’m exhausted.
Anyway, that’s it for now. More in the future.
One of the questions that I am often asked about pertains to the myth entitled “the poor man’s copyright.”
In essence, this myth provides that: “…if I mail a copy of my music to myself, certified, and leave the music in the envelope, I can 1) establish the date of existence of the music as of the date on the envelope and on the certification and 2) protect the copyright embodied in my music.”If that was a jeopardy answer and you responded with the question: “What is a poor man’s copyright?” you win the money.
If, however, that was a jeopardy answer and you responded with the question: “Is this legally valid copyright protection?” the buzzer would sound and you’d be docked the value of the question.
Speaking only of copyright in the United States: there is no such animal. Pure and simple, end of story. If you do this, you have not protected your copyright legally.
However, according to wikipedia (and who knows how accurate that is?), some countries in the world may accept and encourage this kind of thing for their domestic copyrights.
So, in essence, how do you protect your copyright? Ultimately the way you protect your copyright in your original creative tangible material is by way of a lawsuit for copyright infringement. That’s the club you have in your tool box to protect yourself. Ah ha! But there are certainly legal pre-requisites to that lawsuit. One is to follow the copyright law in securing the copyright, which includes the process of registration of that copyright with the Registrar of Copyrights in Washington, D.C. When you file the lawsuit, the complaint that you file has to set forth (allege) that you followed the law and secured your copyright by registration and state the date of registration as well as the registration number assigned to your copyright. That is part of the standard language in a copyright infringement lawsuit. In some instances, you might attach a copy of the registered work to the complaint as an exhibit (but, obviously, you couldn’t do that with a D.A.T., CD or audio cassette. But I do not believe that is required. However, stating that you registered the work with the Registrar, stating the registration number and date must be set forth in the complaint. Without these statements in the complaint, you’ll be thrown out of court on a little technicality: “failure to state a claim upon which relief may be granted.”
Registration, I know, is more costly than ever. The copyright office just upped their fee per registration to $45.00. That’s a lot more than the few bucks you pay for certified mail. However, the certified mail process is a waste of time, effort and money.
Another alternative that might be used is registering your work with the Writer’s Guild of America west here in Los Angeles. The fee they charge is $20.00 and can be done in person or on-line. However, that does not constitute registration of the copyright, a pre-requisite to a lawsuit to infringement, your tool for protection, either. It is supplemental protection, in truth, and might help to prove when your material existed but does not comply with the copyright law. In an infringement lawsuit you could not state: “well, I complied with the law by registering my music with the Writers’ Guild of America.” Again, your lawsuit would be thrown out.
The way to save some money on registration with Washington is to register compilations of your music as one registration (you create 10 songs; register all 10 as one compilation instead of as 10 separate songs). However, this process is a little more involved than registration through one-form (likely form SR) and you should check this with the copyright office or an attorney who knows about such things. Basically a compilation would require form SR and then a form CA (to, essentially augment what you said in form SR, i.e.: list each of the songs from your registered compilation). This is still only one registration of a copyright. By registering a compilation of 10 songs, instead of each song separately, you just saved yourself $405.00, not including postage savings and other incidental cost savings.
It may sound like a pain, but if want to be a music business, this is part of doing business and protecting your rights. In any case, if you do not register your songs with the Registrar of Copyrights, you have no protection and may as well not bother to begin with.
So, let’s recap: you protect your music by 1) creating it in a tangible medium (such as a D.A.T. or CD or even on a hard drive (but there’s a problem there). 2) You register the copyright with the Registrar of Copyrights using the right form for the physical thing you are registering (like sheet music or a CD, which require different copyright registration forms). 3) You submit with your registration form a physical specimen of the song (sheet music or CD for example), either one or two copies depending on whether the work has been published or not. And “published” here may not mean the same thing as “music publishing” as it is normally understood in today’s world. 4) You submit your payment of $45.00 (check or money order, don’t send cash and they don’t, as yet, accept credit or debit cards) made payable to the “Registrar of Copyrights.” 5) You mail all that to the Library of Congress in Washington, D.C. I usually recommend using priority mail with a confirmation receipt. You wait for the Copyright Office to process your application which could take several months (although they will cash your check rather quickly). You get back a stamped form showing date of registration and registration number. Now, you are protected. Or at least, now you’ve got the tool needed to sue someone for infringing on your music for the lawsuit.
Another issue that is as much a myth as the “poor man’s copyright” is the myth that by registering your music with ASCAP, BMI or SESAC, you have protected your copyright. Nope.
Registration of a piece of music with a performance rights organization is not compliance with the copyright law, despite what you may be told about that process. All registering with a PRO does is register the fact that you have granted the PRO a license to administer a specific part of your copyright royalty: the performance royalty. But, here’s another myth: the important registration is really when the so-called publisher of your song registers the song with the PRO. Because it is the publisher of the song that essentially owns the copyright and can grant a license.
So, here’s a connected problem that everyone ignores: if a work is not registered with the copyright office, there is essentially no right that can be legally protected. So, licensing that work to a PRO is an illusion. And when a PRO licenses that work to a broadcaster or a restaurant that, too, is an illusion. Why? If the PRO sues because some broadcaster broadcasted your song and your song’s performance royalty is administered by the PRO but there is no copyright registration with Washington of that song, the PRO cannot allege or prove that you as the author of the song complied with the U.S. copyright law and obtained registration of the music performed in the restaurant, for example. However, PROs appear to license their whole catalogs (“blanket license”), featuring hundreds of thousands if not millions of songs and music and I seriously doubt whether every work in the PRO’s repertory has been legally registered with the Registrar of Copyrights.
This is a ticklish area of the music business which most people seem to just assume.
Never assume anything. Never presume anything.
Well, I hope I dispelled the myths of “the poor man’s copyright” and related issues.
Caveat: all statements in this article are the opinions of their author and not intended as legal advice or counsel; no warranty or representation is made as to the accuracy of such statements. Should you desire legal representation, you should hire an attorney of your own choosing. For more information, you may contact the author privately.
BRIAN LEE CORBER is an attorney practicing law in Los Angeles, California for nearly 30 years. He has been emphasizing music business matters since the late 1990s and follows the news in the music world, which is constantly changing, daily. He can be reached at CORBERLAW@aol.com and (818) 786-7133.
Have you ever rented a car and asked for, let's say a Lexus? Have you ever been told that in order to get your Lexus, you had to rent the whole fleet?
Have you ever rented a house? Did the agent tell you that in order to rent the one house, you had to rent the entire city?
Ever want just one drink of water, but you were told that you had to drink the entire ocean?
Ever own a business and someone comes in and tells you that you have to pay them to protect you from everyone? There is a name for this practice and I think that we can see examples of this practice in the movie "Godfather II."
This is what lies behind the concept of "blanket licensing" in the music business.
Restaurants, night clubs and bars are especially victimized by this practice. In order to perform a few pieces of music (generally standards and songs), organizations like the performance rights organizations ("PROs") ASCAP, BMI and SESAC demand that the venue rent the entire ASCAP, BMI or SESAC catalog. And if the venue doesn't, it gets sued for copyright infringement. The lawsuit doesn't admit that the venue was required to rent the entire PRO catalog or be sued for allegedly infringing on just a few tunes, no the venue is sued just for the specific tunes that it performed and the demand for a blanket license is ignored.
Same way with Sound Exchange, the licensing arm of the RIAA with respect to internet transmissions of music (otherwise known as "webcasting"). The webcaster just wants to play the film scores of a particular composer but is told it has to pay for the entire repertory of recorded music.
So, what is the solution? It is called direct licensing. It may take some effort, but you as the restaurant, bar, night club or webcaster contact the actual owners of the music or the onwers of the recording (sometimes known as "the master") and you buy a direct license from that owner. You pay them directly.
Or, perhaps, a new internmediate organization should be created to facilitate these kinds of transactions. If you directly license music from the onwer of the rights you can forego the blanket license because you do not want to be able to play the entire catalog of music from the PRO or Sound Exchange. You may want to perform only the songs of Cole Porter, you are not interested in performing the symphonies of, for example, Aaron Copland. So why pay for what you don't want--and why be forced or coerced into paying for what you don't want? Think about it.
Thursday, August 23, 2007
Thank-you for your question in regard to the RIAA. AFTRA cannot control what claims may be made by the RIAA. There are many organizations that claim to represent Artists and one has to look past such claims to see if that statement is true. The RIAA “represents” their Artists in any arena that may generate significant money for RIAA member labels. I can’t think of any action taken by the RIAA that didn’t have a significant impact on the income of a member label. Can the RIAA then state that everything they do benefits their Artists? Sure they can. Is this a true statement? The answer depends on your position in the recording industry.
AFTRA on the other hand, is totally focused on representation of Recording Artists. AFTRA does not engage in activities where Artists are a secondary beneficiary of those efforts. Artists are the primary and often sole beneficiary of AFTRA’s efforts. The AFTRA Sound Recording Code currently guarantees all roster Artists the opportunity for health insurance coverage. The AFTRA Code also provides Artists with pension, dental, life insurance and drug and alcohol rehabilitation benefits through the AFTRA Health and Retirement Funds. The AFTRA Sound Recording Code is currently the subject of negotiations with RIAA member labels and certain benefits and protections provided to Artists and singers who work under this Code are currently in jeopardy as described in the petition you read on our national website.
AFTRA is the only organization or Union authorized by the labels to speak on behalf of Artists. AFTRA has proved to be the Artist’s voice in local, national and international legislative affairs. I invite you to take a closer look what AFTRA has accomplished on behalf of all Recording Artists and how AFTRA has restructured its operations to address the needs of Artists both now and in the future. And if you haven’t already done so, I encourage you to sign the petition, unless you believe that the RIAA and the labels truly look after the best interests of all Recording Artists and would provide the protections and benefits found in the AFTRA Code to their Artists in the absence of AFTRA.
Friday, August 17, 2007
"The Recording Industry Association of America (RIAA) is the trade group that represents the U.S. recording industry. Its mission is to foster a business and legal climate that supports and promotes our members' creative and financial vitality. Its members are the record companies that comprise the most vibrant national music industry in the world. RIAA members create, manufacture and/or distribute approximately 90% of all legitimate sound recordings produced and sold in the United States.
Artists are represented, if at all, only in connection with the RIAA's activities as a trade group in support of its constituent members. And it is debateable whether by representing record companies it, therefore, represents artists. But to say it represents the big record labels would not create as much sympathy for its purported mission as saying it represents artists. And the record labels themselves don't actually represent artists, they exploit and profit from artists, and when there's no more profit to be made, the artist's contract is terminated and the artist goes bankrupt. One practice used by the labels: to incorporate into standard contracts "work for hire" terms despite the fact that "work for hire" as defined by the U.S. Copyright code in 17 USC 101, does not define a record contract as permitting "work for hire." When the law was changed in the late 1990s, the RIAA pushed for a definition of "work for hire" to include recording contracts, many artists and even ASCAP fought this and the law change was reversed. Despite that, labels still incorporate the language, all with a purpose of taking away all rights from their recording artists, including the right of terminating the copyright license within 35 years under the code. Very sneaky. When the RIAA speaks, it speaks for its member major record labels and no one else. If it were up to them and SeX (sound exchange), no one would be able to ever listen to any piece of music without directly paying for it then and there. Free music in the future will only be available from street musicians who play on street corners.
--Brian Lee Corber, attorney at law, Panorama City, CA 91412-4656, 818-786-7133, CORBERLAW@aol.com