Blog post submitted by: Vanessa Kaster, Esq., LL.M.
Copyright vests automatically in an original work once it is ‘fixed’ in a tangible form. While copyright vests automatically, it can also be advantageous to register an original work for copyright registration with the US Copyright Office. Registering a work with the US Copyright Office is not a requirement but it can be beneficial for the following reasons:
- Registration with the US Copyright Office establishes a public record of the basic facts including ownership of an original work.
- Before an lawsuit may be filed against someone infringing your work, registration is necessary with the US Copyright Office for works of US origin.
- If registration is made within 3 months after publication of the work or prior to an infringement of the work, statutory damages and attorney’s fees will be available to the copyright owner in court actions. Otherwise, only an award of actual damages and profits is available to the copyright owner.
- If registration is made within 5 years of publication of the work, registration will establish prima facie evidence in court of the validity of the copyright and of the facts stated in the certificate.
- Registration with the US Copyright Office allows the owner of the copyright to record the registration with the US Customs Service for protection against importation of infringing copies.
It is possible to file for US Copyright Registration at anytime within the life of the copyrighted work. Currently, it only costs $35 to file an application with the US Copyright Office for registration.
The term of copyright protection for a work created on or after January 1, 1978 is for the life of the author plus 70 years (or if a work is made for hire the term of copyright protection is 95 years from the date of publication or 120 years from the date of creation, whichever expires first.)
Wishing all of you reading this post a Happy New Year! Starting off the new year with a reminder that all your original creative content that is written down, drawn, painted, recorded, sculpted or otherwise fixed… is automatically vested with copyright feels auspicious. As detailed above, taking the extra step to register your work with the US Copyright Office can be beneficial.
BY: Vanessa Kaster, Esq., LL.M.
For personalized legal services you are welcome to contact me at email@example.com
For more information see, Circular 1, Copyright Basics; Circular 15A, Duration of Copyright. and all the information circulars and fact sheets available at the US Copyright Office website: http://www.copyright.gov/circs/; and also an earlier post “Copyright Protection Only Costs $35”; @iplegalfreebies and www.kasterlegal.com.
5 out of 6 reasons are THEIR fault. Time for retrospection.
By Tommy Darker. The essay was originally published in The Musicpreneur on Medium.
I was at a gig last night and I saw three amazing bands rocking out the stage and making people dance very hard. Note: it’s London, normally people don’t dance that hard.
The sad realization I made is that none of these bands actually makes money. Isn’t it sad? The band entertains you, makes you feel great, you pay the bar for drinks, but the musician gets nothing of monetary nature.
That brought an avalanche of thoughts and I started jotting them down! I quickly came down to 6 main reasons of failure, which you’ll definitely relate with (if you’re a musician).
Note: this order IS hierarchical. In other words, if you haven’t solved issue #1, don’t try to solve #3.
1. Lack of focus on a specific goal and vision.
“If you don’t know where you’re going, any road will get you there.” Lewis Carroll
Instead of blaming the system, musicians should blame themselves for not knowing where they’re going and having ambivalent goals.
A solo artist needs a long-term goal to focus on and a grander vision to accomplish. A band—to make matters more complicated—needs to maintain a mutual and clear route for all the 3-4-5 members that constitute it. Everybody needs to agree.
If you don’t, don’t blame the audience when you hear the phrase:
“You’re good, but you sound/look like (name other—probably well-known—artist)”
That is, you don’t stand out. Because you haven’t spend any time to refine what art means to you, who you are and why you’re different from the others.
And I don’t mean you need to be enormously ambitious to have focus on a goal. It’s good enough to say: “I will be the busker that all the people of Camden (neighbourhood of London) will talk about.”
2. They suck at communication.
Ok, let’s not hide behind our fingers. If you do have a vision, I guarantee that nobody will know about it if you haven’t communicated it properly to the world.
You can communicate a message in two ways: with words and with actions.
Speaking about actions, let me just drop some food for thought (and the hungry Musicpreneurs will get it):
The quality and nature of one’s vision is appraised according to the perception created by the context, the consistency and the progress of the visible bit of the vision.
All three must be present. In humanese: how do you expect someone to be convinced of your grand vision when you keep playing in bars and open mic nights all the time? Nobody says you don’t have a great plan behind it, but if people don’t see the signs to keep up with it, you’ve lost them forever. And that’s because of the bad communication on your part.
“Always try to build a bond and relationships that go through YOU, not through your band’s name or profile.
Everyone might be able to ignore a band’s music, but nobody can ignore the fiery passion and vision of a PERSONALITY. This is what you should sell them. Everybody’s got good music.”
In other words, if you’re a charismatic communicator, this quality will rub off on your artistic profile as well. If you don’t have this inclination, work on it and become a great verbal communicator.
3. Has anyone heard of persistence?
The vision is there, you feel confident and you got some great people supporting you. But you are on the verge of giving up.
Persistence is the key. Which part of this sentence don’t you understand?
You constantly consider giving up because you haven’t tasted the corn yet after months of harvesting. It’s alright, keep harvesting. Adding value is not a race. It’s a life-long process.
The rewards will come sooner or later. It seems you still have steps to do, you’re not there yet. How can you expect to reach the goal if you haven’t executed all the steps? That’s unnatural, dude!
An example (for you to face reality):
What would the value of Ferrari be without years of persistence to build a luxury brand, which is valued according to its durability in time? Wouldn’t it be stupid (and funny) for Enzo Ferrari to say ‘it’s too hard, I quit’, while building something that exceptional?
An advice (for you to feel better):
Do you want to feel better and quit less often? Keep following the vision you have in mind, but slice it in small, measurable and attainable sub-goals, which will help you be accountable to yourself, boost your confidence and will give you shots of gratification to keep going.
And do you want to hear the harsh truth?
Nobody owes you a living and you need to go after it. With persistence.
4. Tools are there. Know-how isn’t.
Yes, I’m saying that most musicians don’t know how to use the vast majority of tools available to them. That’s sad, so much potential goes to waste.
I’m not implying that all tools out there are relevant and useful to every musician. But when you combine strategically and skillfully some of them, you can effortlessly and cheaply create a system that will vigorously work on your behalf. Think beyond Bandcamp and Soundcloud, this is not all there is.
This is the power of the web, it shouldn’t go wasted. Especially if you have laid a coherent plan, talent and persistence on the table, the next step is the investment in knowledge. Knowing how and why.
You won’t get far without having a clear overview of the media world and the related industries that comprise it. You need to be sure where you stand in this map, and that only comes with knowledge. Some of the tools that I found most useful have nothing to do with musicians. And this is where the treasure is hidden, you cannot spot it unless you’ve build a media world map in your head. Oh Lord, how creative can this process be! You can’t imagine.
Investing in bodies of knowledge indirectly connected with the music industry is the way to go.
What kind of knowledge? A few examples: how startups work, psychology of copywriting, neuromarketing, design, how perception is formed and so on. A musician in the future will need to know about all these topics — why not invest in the future today?
5. Business model: what’s yours?
Here’s where most heads will get scratched. But this is where the root of all evil lies.
Most musicians have no business model at all or just—badly—clone existing ones. (Because this is what others do)
What a business model is NOT, to begin with:
A business model is not how you make people spend more money on what you do.
What a business model is (my favorite definition):
A business model describes how you create, deliver and capture value (economic, social, cultural or other).
In other words, you might not sell anything, but you need to have a business model! Even non-profits, whose purpose is to deliver value, need a business model. This way, they organize how they deliver that value to the world and survive in an economic environment (because everybody needs some money to sustain what they do).
What happened here? Did the hateful attitude towards the word ‘business’ reverse? Yes it did.
Business is any operation that requires some form of transaction to progress. As a musician, you’re transacting (a lot): emotions, music, experiences, products, money.
Read the Business Model Generation (a book worth buying) to get a full idea of how you can organize your assets and activities, offer more value, balance costs and revenue to make a profit. Organize, offer value, make profit. Splendid!
Having a solid vision, knowing how to translate it in words for the real world, knowing how not to quit and arming with knowledge. Assemble all that under the umbrella of a business model.
This is your part. Lots of things to sort out. You’re alone up to that point. But soon you’ll need external help. #6 it is.
6. Everyone needs some budget to get things done.
This is the #1 excuse of a musician, but in reality it’s the least important factor when it comes to building strong foundations as a band-business.
Money will be used to scale up, not to build something exceptional. I’m a big fan of bootstrapping and experimenting, just like the lean startup framework suggests. The more you experiment and play small, the more chances that you’ll create something truly exceptional.
Money is not a part of this equation. Despite the fact that most musicians think it is. Money will bring money (aka it will be used to scale up something that already makes money).
So, stop thinking about how you can fund something, start building something minimal that stands out instead. Cliché? Hell, can’t be truer.
Money is a multiplier, not a foundation.
What will you need money for?
To create a team around your project and compensate them for their time, to develop some concepts that require a budget, to use publicity services.
Where will you find that money?
1. Kickstart the well-defined project you’ve planned. You must have created some traction and gained some fans, right?
2. Find an angel investor to fund you. You’ll be accountable to them and that’s an extra motivational force. Your ‘product’ needs to be investable and scalable for Angels to be attracted.
3. Borrow that money. You believe much in your project, don’t you? That means you won’t be afraid to get in debt to pursue it.
What do I do next, Tommy?
Alright, hopefully you’ve read the whole article. What do you do now? How does this translate in the real music world?
Re-evaluate who you are and why you create art. What is the outcome you want: legacy, money, fame, freedom? Prioritize things and mainly focus on the number one. You can’t have it all (or at least focus on all of them on simultaneously). I focus on freedom and then legacy.
Arm yourself with knowledge. It has never been so fun and easy to learn and pursue what you want. But the good resources of knowledge are floating in a vast web. Some free, high quality knowledge sources can be found in Coursera, Udacity, edX, KhanAcademy, ArtistHouseMusic, while great paid courses can be found on Udemy and Skillshare.
Start transforming from a hobbyist to a Musicpreneur. Start with this course on how to build a Band as a Business and a more advanced on How to Build a Startup (both are free). Follow my updates on Think Beyond The Band and read my extended report about the Musicpreneur. Watch the videos of Darker Music Talks.
Stop thinking about money. Release yourself from those thoughts. Money for scaling up comes last.
“The best way to maximize profits over the long term is not to make them the primary goal of the business” John Mackey
Go lean and experiment to find the perfect business model! The reality is I cannot give you specific advice on how to become successful and make money, because there is no universal solution yet. That’s good, only the serious Musicpreneurs will make a living, nobody owes you one! Start learning about the lean thinking and create a business model that suits your integrity. Again, this book is a must and a foundation.
For more essays like this as soon as they’re published, enter your email here.
I’m Tommy Darker, the writing alter ego of an imaginative independent musician. I started ‘Think Beyond The Band’because I feel proud of what I’ve accomplished so far and I like helping other fellow musicians that struggle with the same problems.
Blog post submitted by: Vanessa Kaster, Esq., LL.M.
Music is one type of “original works of authorship” that copyright law protects. Copyright protection gives the authors or owners of copyrighted music the exclusive rights to do and to authorize others to do the following:
- TO REPRODUCE the copyrighted music;
- TO PREPARE DERIVATIVE WORKS based upon the copyrighted music;
- TO DISTRIBUTE COPIES of the copyrighted music to the public by SALE or OTHER TRANSFER of ownership, or by rental, lease, or lending;
- TO PERFORM the copyrighted music publicly;
- TO DISPLAY the copyrighted work publicly. (Display may be less applicable to music; although, in today’s digital age it could be possible and worth mentioning).
These exclusive rights in copyrighted works, including music, are outlined in Section 106 of the US Copyright Act. Violating any of the rights vested in the owner of copyrighted music is illegal. However, it is important to note that there are some exceptions and limitations to these rights. One major limitation is the doctrine of “fair use.”
While copyright exists in any piece of original music (and any original work) from the time the work is created in a fixed form, registering the music with the US Copyright Office has additional advantages including: 1) establishing a public record of the copyright; and 2) assisting with any infringement actions that may arise. Keep in mind that copyright registration is affordable and only costs $35.
BY: Vanessa Kaster, Esq., LL.M.
For personalized legal services you are welcome to contact me at firstname.lastname@example.org
See also, the US Copyright Act at http://www.copyright.gov/title17/92chap1.html; the US Copyright Circular 1 on Copyright basics at http://www.copyright.gov/circs/circ01.pdf; the US Copyright Office Website at www.copyright.gov; other blog posts on copyright registration of original works; @iplegalfreebies and www.kasterlegal.com.
By Jeff and Todd Brabec
A composition in the public domain is one that is unprotected by copyright, because its copyright has expired. As a brief overview of copyright duration under the United States Copyright Law (and there are more complexities depending on the composition involved so this is not dispositive in any respect other than to provide a general rule of thumb as a starting point), protection for a composition copyrighted prior to January 1, 1978 lasts for 95 years from the earlier of registration with The Copyright Office or publication. For compositions written on or after January 1, 1978, copyright protection lasts for the life of the author (or last surviving author if a joint work) plus 70 years. And if the composition was written as a work for hire, the copyright protection term is the earlier of 95 years from publication or 120 years from creation.
Granted, not much public domain material is recorded in comparison with original material, but if such a song becomes a hit or is on a successful album, the royalties can be substantial provided the writer/arranger (who is many times the recording artist or record producer) has copyrighted his or her version and registered it with the performance right society with which the writer is affiliated..
In the artist’s record contract or the producer agreement (if the writer is the producer) there is almost always a clause that deals with how mechanical royalties are paid if a public domain song is contained on the album or released as a single track.
Some record companies refuse to pay any writer or publisher mechanical royalties for public domain compositions. Others pay a reduced stated penny rate.
The most common approach (one accepted by most record companies), however, provides that the record company will pay the songwriter/arranger on the basis of the percentage that ASCAP, BMI or SESAC determine what they will pay the writer/arranger for performances of the copyrighted arrangement.
In this regard, ASCAP will treat an arranger as a writer and pay royalties according to the amount of new material that has been added to the original public domain composition. The percentages range from a low of 2% to a high of 100%.
Below is a summary of ASCAP’s guidelines in the crediting of public domain works for royalty purposes.
If the arrangement is separately published or separately copyrighted, there will be a 10% royalty crediting (i.e., the royalties payable for performances will be 10% of the royalties that would be earned by an original song). If it is included in a copyrighted collection (but does not qualify for 10%), then the royalty crediting is 2%.
If the composition contains public domain lyrics and new, original music, it may receive up to 50% crediting, depending on the extent and treatment of the lyrics within the context of the entire work.
If the copyrighted arrangement contains lyrics, it is deemed to be a vocal arrangement and can earn up to 100% depending on the extent to which it embodies changes in the underlying composition as follows: (a) new lyrics, up to 50%; or (b) changes in the music, up to 50% (in addition to any % received in (a) above).
If the work is primarily an instrumental, it can be accorded up to 100% of the % given to an original composition as follows: (a) a transference from one medium to another, up to 35%; or (b) a development of a composition, which exhibits creative treatment and contains original musical characteristics and is identifiable as a set piece apart from the source material, up to 100%
BMI, on the other hand, will pay the writer/music publisher 20% of what an original newly written song would earn. Unlike ASCAP where there is a review process if the writer requests such to increase the percentage from the initial 2% to 10% that is initially allocated, this is a flat rate determination which is applied to all copyrighted arrangements of public domain compositions across the board.
SESAC treats public domain works in a manner similar to BMI, as arrangements of songs that are in the public domain are paid at 15% of the otherwise applicable income that would have been earned by an original song.
To illustrate with an example as to how the procedure works in reality, let’s assume that a writer artist or writer producer is an ASCAP writer member who records a contemporary arrangement of a song that is in the public domain. In the artist’s record contract there is a provision that the artist will be paid the 9.1₵ United States statutory royalty for the sale of every composition that the artist writes and records. There is a 13x statutory cap on physical product but such does not apply due to the fact that the album does not exceed the cap (i.e., the album has only 13 songs on it).
In addition, there is a provision in the controlled composition clause of the artist and/or producer agreement that states that mechanical royalties on any arrangement of a public domain work will be calculated in proportion to the percentage given the writer’s copyrighted arrangement by ASCAP, BMI or SESAC.
The single is released, is successful, and sells 250,000 downloads. The album goes to #1 and sells 500,000 units in the United States.
The recording artist/writer (or writer/producer if applicable) submits the recording and a copy of the new arrangement to ASCAP, where the composition is analyzed in house and a % determination made. If the writer is not happy with this decision, he or she can appeal this classification decision to the Special Classification Committee For the sake of this example, ASCAP and its Special Classification Committee gives the composition a 50% royalty rating because of significant additional new material, creativity, etc. – in effect, making the new composition worth one-half of an original newly written song.
The record company is sent a copy of the ASCAP determination ( the same would occur with BMI and SESAC with their flat fee rates) which then gives the song a 50% mechanical royalty payout rate. In other words, the song will receive 50% of the “original song” 9.1₵ statutory rate per composition mechanical royalty. Certain agreements have a time limit on when the determination and supporting evidence has to be received by the record company but this article is not intended to concentrate on whether such type of provision is enforceable or not. One should, however, be aware of such.
The mechanical royalty calculations for sales in the United States would be:
Single 9.1₵ x 50% = 4.55₵ x 250,000 = $11,375
Album 9.1₵ x 50% = 4.55₵ x 500,000 = $22,750
Such a clause may not seem important to most recording artists and producers who write their own material, but a good recording or producer contract should anticipate and provide for all contingencies. It may not seem likely that the artist will be recording any public domain compositions. But if it happens, the artist (or writer/producer) should be guaranteed some type of fair formula for payment.
It should be emphasized that songwriter and music publisher performance royalties will be based on that same percentage so if a public domain song becomes a radio or Internet hit, the % allocation received from ASCAP, BMI and SESAC can really have an effect on the amount of money that can be earned. For example, if a song is a major radio hit, earnings in the area of $300,000. to $700,000. in songwriter earnings are not unusual in performance royalty income for an original song during the period of chart activity. One just has to do the math to see the monies at stake depending on the % given by the writer’s performance right organization for the public domain work arrangement. For example, an ASCAP 50% public domain crediting would generate $150,000.-$350,000. in writer earnings if one were to use the above original song payments. A BMI 20 % crediting would generate total songwriter figures in the area of $60,000.-$140,000. A SESAC 15% crediting would generate $45,000.-$105,000.
And since the music publisher is paid at the same rate as the writer/arranger, this is not only a songwriter issue but a publisher issue as well.
This article is not going to get into the ins and outs of the actual registration processes with ASCAP, BMI, and SESAC. It should be noted that some of the forms and inquiry boxes to be checked [e.g. (a) original music, (b) public domain music, (c) pre-existing copyrighted music written by someone else, used with permission, but not in collaboration, (d) original lyrics (words), (e) public domain lyrics (words), (f) pre-existing copyrighted lyrics (words) written by someone else, used with permission but not in collaboration, (g) the work is concert music (e.g. symphonic, chamber, recital, etc. with qualifiers concerning whether the work is complete in one movement, part of a multi-movement work such as a symphony, concerto, or song cycle, or part of a larger work, etc.)] are somewhat different from the normal registration process. So knowledge of registration procedures (as mundane as this may sound) is vital to ensure rights and proper crediting, monitoring, and payment of royalties.
Determining whether a song is in the public domain is always the first inquiry. Once this has been established, the next inquiry is how to receive income for its use. To receive any royalties or license fees, you have to copyright your particular arrangement of the pd work and notify your PRO. Without that step, the income flow will be 0 dollars. Once copyrighted, you will receive between 2% and 100% of the royalties that would have been generated had the song not been a pd work.
Performing Rights Licensing in the United States: A World of Multiple Choices, Considerations, and Results
By Todd Brabec and Jeff Brabec
Today’s world of music licensing is undergoing major changes in practically all areas. In the U.S. performance area, the traditional music licensing entities are ASCAP (1914), BMI (1939), and SESAC (1930). Their counterparts in other countries of the world include PRS for Music in the United Kingdom, SOCAN in Canada, and SACEM in France. Existing alongside them is the ability to direct or source license music thereby bypassing the performing rights organization (PRO) structures altogether either on an individual transaction basis (e.g., a particular television show) or for an entire medium (e.g., the Internet).
To make intelligent decisions in this field, you need to know the traditional licensing structures of the PROs with their long history of negotiations, license fees, litigation, and royalty payments, as well as the possible ramifications of a direct or source license as to terms, payments, and other contractual obligations and considerations both in the United States and worldwide. This information is essential regardless of whether you are happy with past and current PRO licensing or are in a situation where you are contemplating a direct or source license or have been asked to consider one or are being forced to enter into one.
The Performing Right
The exclusive right to publicly perform a work is a right of copyright that is set forth in the U.S. Copyright Law, as well as the laws of most countries, and that applies to the payment of license fees by music users when those users perform the copyrighted musical compositions of writers and publishers. This right recognizes that a writer’s creation is a property right and its use requires permission as well as compensation.
Performances can be songs heard on the radio, a website, or a digital jukebox; or the score in a television series or feature film; or music performed live or on tape at a Las Vegas show, an amusement park, a sporting event, a major concert venue, a local rock and roll, country, or jazz club, or a symphonic concert hall. Performances can be music channels on an airplane, music at a convention, or music on hold on a telephone. Music users (those that pay the license fees) include the major television networks, U.S. local television and radio stations, pay cable services (HBO, Showtime), basic cable (USA Network, MTV, VH-1, A&E), online streaming services, concert halls, websites, the hotel industry, colleges and universities, nightclubs, bar and grills, theme parks, and many others. In short, in most situations where music is being performed (with the exception of the home), a user is paying a license fee, an organization is collecting those fees, and writers and music publishers are being paid royalties for the performances of their copyrighted works.
In the United States, this right’s primary recognition came as part of the 1909 Copyright Act, with further definition under the 1976 Copyright Revision Act. The right covers the non-dramatic performance of copyrighted musical works. It does not involve dramatic rights, also known as grand rights, where performances of a composition are licensed directly by the copyright owner. Dramatic, or grand, rights include works being performed in musicals (the live theatre), operas, ballets, and so on. Compositions, though considered dramatic in the context of their original theater or opera setting, are generally under the non-dramatic right when performed individually on radio or television.
In the United States, three organizations negotiate license fee agreements with the users of music and distribute those fees back to the writers and publishers whose music and lyrics are being performed. The organizations are the American Society of Composers, Authors, and Publishers (ASCAP); Broadcast Music, Inc. (BMI); and SESAC.
ASCAP, BMI, and SESAC Income
The starting point for how much an ASCAP, BMI, or SESAC performance is worth is the total revenue that comes into each organization. In 2011, ASCAP’s total receipts were $985 million with BMI at $931 million. Combined distributions to songwriters, composers, and music publishers were in excess of $1.6 billion. SESAC, a smaller private for-profit corporation, does not issue financial information, but reliable estimates place it in the area of $100 million in annual revenue.
It is important to keep in mind that approximately $650 million of the $2 billion annual ASCAP, BMI, and SESAC total represents monies forwarded by foreign performing right collection societies for U.S. songwriter and composer works performed in foreign territories. Most music publishers collect their foreign monies directly at the source via their contractual arrangements with sub-publishers, but some receive their publisher royalties directly via foreign societies that remit the royalties to ASCAP, BMI, or SESAC (whichever is applicable), which then send the monies to the U.S. publisher. The foreign area is important as payments could very well be affected by the language, structure, and scope of any direct or source license agreement.
The next PRO inquiry relates to how much an individual performance is worth in any given medium, as this figure at least provides some form of comparative compensation framework in which to work. Considering that ASCAP, BMI, and SESAC have completely different payment schedules for every type of use (score, visual vocal, theme song, jingle, etc.) in every type of medium (broadcast television, cable, radio, the Internet, etc.), this second inquiry can be extensive depending on the medium and type of performance you are dealing with.
Types of License Agreements
The most common type of license agreement signed by users with ASCAP, BMI, and SESAC is the “blanket license.” This license allows a user (a radio or television station, for instance) to perform any works in the ASCAP, BMI, or SESAC repertory during the term of the license for a specific negotiated or court set fee. This unlimited access to repertory includes all of the past works of writer and publisher members or affiliates, as well as the works written by such members or affiliates during the entire term of the license agreement. The license also covers the works of writers who are members of foreign societies (PRS, SOCAN, APRA, GEMA, IMRO, JASRAC, BUMA, etc.). The blanket license allows a user to perform the copyrighted works of writers and publishers without worrying about infringement litigation (performing copyrighted works without permission), the administrative record keeping of what is being performed, or the identity of the correct parties to be paid and what the payment is to be.
Blanket licenses are normally negotiated agreements in which the license fee paid by the user can be, among others, a flat dollar fee, a per-subscriber or gross revenue fee, a fee based on net receipts from sponsors, a fee based on intensity of music usage, or a fee based on such other objective factors as the number of full-time students for universities, the seating capacity and the types of equipment used in nightclubs, and live entertainment expenditures for hotels. As part of the ASCAP and BMI Consent Decrees with the government, a federal rate court determination of a reasonable license fee also is available. License agreements have a maximum term of five years.
A per-program license is where a station pays a license fee only for each program using ASCAP or BMI music that is not otherwise licensed directly or at the source. The fee is dependent on the advertising revenues the program has generated for the station. The station also pays an incidental music fee for music uses not contained in specific programs and ambient uses in local news programs. The core provisions of this license were set by the court decision in United States v. ASCAP (In re Application of Buffalo Broadcasting Co.), No. 13-95 (WCC), 1993 WL 60687 (S.D.N.Y. Mar. 1, 1993). Additional PRO licenses include a “Per-segment license” and a “Through- to- the Audience license”.
Two other forms of license involve the writer and publisher (the copyright owner) making an agreement directly with a user or directly with a program producer (a film or television producer, who then grants the license to a user). These latter two forms of license are permitted under the ASCAP, BMI, and SESAC writer and publisher agreements, as those agreements are nonexclusive and enable a writer to license his or her works directly even though he or she is a member of ASCAP or an affiliate of BMI or SESAC.
Writer and Publisher Contracts and Termination Dates
One of the most important provisions of any contract is the termination provision—the clause and rules that govern how you can leave an organization in order to join another. In the performing rights area, these provisions not only control whether a writer or publisher can leave but also whether one can remove his or her works from one organization and place them with another.
Over the years, there have been many major writer and publisher switches—some due to advances, guarantees, and other financial incentives; some due to significant out payments by one organization over another for the same type of use; some due to an organization’s rules and regulations, which significantly affected earnings; some because of the difference in payments between writers and publishers; some because the staff and services are better elsewhere; some based on personal relationships; some based on philosophy; some based on the inability to correct a problem, understand a problem, or solve a problem; some based on inadequate surveys of performances, which determine payment; and some just to make a change.
Regardless of the reason, it is essential you know each organization’s termination/resignation provisions as well as the rules, regulations, and policies affecting continued payment and the ability to remove works.
When a writer or publisher joins ASCAP or affiliates with BMI or SESAC, he or she fills out an application and signs a contract, which is a legally binding agreement that sets forth the specific contractual obligations, duties, and remedies of all parties. Contracts have changed over time, so always be aware of the PRO contract that governs your situation.
The ASCAP agreement is the same for both writers and publishers and gives the society the right to license the non-dramatic public performances of the member’s works. The agreement also grants ASCAP the right to enforce and protect the rights of public performance, to prevent infringement of such works by litigation, and to have all of the rights and remedies for enforcing the copyrights as well as the right to sue under such copyrights. The agreement is subject to the provisions of ASCAP’s 1950, 1960, and 2001 Consent Decrees with the government, as well as the society’s articles of association and any resolutions of the ASCAP board of directors. The agreement also states that the board of directors must consist of an equal number of writers and publishers, and that the royalties distributed must be divided into two equal sums for division to writer and publisher members.
The ASCAP agreement is a continuing year-to-year agreement that gives a writer or publisher the right to resign from the society any year. A specific form needs to be completed and signed, and notice provisions, based on a writer or publisher’s date of election to ASCAP, must be adhered to. For instance, writers and publishers elected to ASCAP membership in January, February, or March of any year must give notice between July 1 and October 1 of the prior year for the resignation to be effective on April 1. The resignation notice dates for April, May, and June ASCAP elections of any year would require notice between October 1 and January 1 of the prior year for an effective resignation on July 1. And so forth.
The contracts that most writers and publishers sign with BMI are the same, but provisions can be negotiated provided the writer or publisher makes such a request and has the bargaining power to effect a change. Although most initial affiliation agreements are not negotiated, many successful writers and publishers renegotiate the provisions prior to any extension of the contract.
Most BMI writer agreements are for a period of two years and continue thereafter for additional terms of two years each, unless they are terminated by either party by registered or certified mail not more than six months or less than three months prior to the end of a term. For example, if a writer signed a BMI contract on June 30, 2010, the contract would run until June 30, 2012, and continue to renew for additional two-year periods (June 30, 2014; June 30, 2016; June 30, 2018) unless terminated. A writer could terminate by giving registered or certified notice to BMI no sooner than six months prior to June 30, 2012, or any two-year term after that, and no later than three months prior to June 30, 2012, or any two-year term after that.
Most BMI publisher agreements are for a period of five years from the date of signing and continue for additional periods of five years each, unless terminated by either party by registered or certified mail not more than six months or less than three months prior to the end of a term. If a publisher misses the termination date, the contract extends for an additional five-year period. For example, if a publisher signed a contract on June 30, 2007, and wished to terminate the contract sometime afterward, notice would have to be given no sooner than six months prior to June 30, 2012, and no later than three months prior to June 30, 2012. If these termination dates are missed, the contract will extend to June 30, 2017.
SESAC does have a standard writer and publisher agreement, which can be modified through negotiation. The writer and publisher contracts grant to SESAC on a nonexclusive basis the “right to perform publicly and to license to others to perform publicly, the writer’s and publisher’s works throughout the world.” The term of the agreement is three years, with automatic renewals for three-year periods on the same terms and conditions as the original agreement if not timely terminated. Writers and publishers can terminate these agreements by giving written notice by certified mail, return receipt requested, at least three months but not more than six months prior to the expiration of the current period of the term. SESAC contracts prior to the late 1990s were five-year publisher and three-year writer agreements automatically renewable.
Removal of Works
ASCAP, BMI, and SESAC have specific rules as to the removal of works by a writer or publisher for future licensing. With ASCAP, one of the primary provisions relates to whether there are any license agreements still in effect as of the time of the effective date of the resignation. Works remain with ASCAP at least until the specific license in effect expires. At BMI, a primary contract provision allows works to be removed at the end of the writer affiliation contract (normally every two years) and at the end of the publisher affiliation contract (normally every five years), assuming valid termination notices have been sent. Some contracts also have licenses in effect clauses. With SESAC, works can be removed from their repertory at the end of the writer and/or publisher contract (normally every three years), assuming an effective termination notice has been sent.
Specific licensing issues arise (i.e., the ability to legally license) if only a portion of a work is removed from one organization and placed with another PRO. Further, the rules in this area do change based on the introduction of new contract language into agreements, changes in the governing documents of a PRO, litigation, and PRO internal policy decisions.
If you are not a member or affiliate of ASCAP, BMI, SESAC, or a foreign country PRO, you can directly license any or all of your works as there is no contractual agreement with any PRO as to licensing. You have to be careful though if a composition you are attempting to directly license has co-writers or co-publishers who are members or affiliates of a PRO.
PROs and Direct Licenses
As previously mentioned, the agreements that writers and publishers sign with ASCAP, BMI, and SESAC are nonexclusive, and the PROs cannot interfere in any way with the right of any member or affiliate to issue a license to a user—specifically, a writer (or publisher) grants to the PRO the nonexclusive right to license the non-dramatic public performance of that writer’s musical compositions. If a direct license is entered into, there is an obligation on the part of the writer and publisher to notify the PRO of any such direct license including the title, names of writers and publishers, licensee information, territory, medium, venue, and duration of the license.
The direct license issue, around since at least the 1950 ASCAP Amended Consent Decree, has recently come into the spotlight again due to separate ASCAP and BMI 2010 Southern District of New York Rate Court decisions involving the background/foreground music service supplier DMX, as well as a 2011 decision by EMI Music, one of the largest publishing companies in the world, to withdraw certain online licensing rights from ASCAP.
In the BMI/DMX case, the court entered a final rate for a through to the audience blanket license subject to adjustment for the amount of BMI music directly licensed-a blanket license with a carve-out. In the ASCAP case, the court ruled that ASCAP was required to issue a blanket license with carve outs for directly licensed works. Both ASCAP and BMI appealed their respective decisions to the United States Court of Appeals for the Second Circuit which in June of 2012 affirmed the judgements of the district court
In response to EMI Music’s notification to ASCAP that it wished to withdraw from ASCAP the digital licensing of a major portion of its catalogue (with ASCAP continuing to license EMI compositions for all traditional media), the ASCAP board of directors passed a resolution that set forth the procedures and considerations involved for the removal of works for defined categories of online music users. The resolution is set forth in section 1.12 (1.12.1–.9) of the Compendium of ASCAP Rules and Regulations.
The resolution states that
any ASCAP Member may modify the grant of rights made to ASCAP under such Member’s Membership Agreement by withdrawing from ASCAP the right to license the right of public performance of certain “New Media Transmissions” (defined in [section 1.12.9]) of works (to the extent of such ASCAP Member’s rights in such works) in which the Member has an interest and any corresponding interests of Writer Member(s) and/or other Publisher Member(s) in such works that such ASCAP Member has the right to withdraw . . . pursuant to a publishing and/or administration agreement between the withdrawing Member and the Corresponding Member-in-Interest, subject to the terms and conditions set forth herein. Such rights are referred to herein as “New Media Transmission Licensing Rights.
The member has to submit a specific modification notice pursuant to the provisions of the resignation clause (section 1.11) that complies with all aspects of the resolution and is subject to “licenses in effect.” Any member may terminate its Membership Modification at any time upon written notice to ASCAP, and thereby grant back to ASCAP the rights previously withdrawn. The resolution is quite complex and specific in its application and must be read very carefully for a full understanding.
The following represent some of the considerations that are normally taken into account when contemplating a direct performance license:
• What are the past and current PRO payments in a particular area for a particular type of use?
• What does the future look like for PRO licensing in this area?
• Does one have the right to license the writer’s share?
• Does one have the right to license the shares of co-writers and co-publishers?
• Is the license worldwide or only for the United States or the United States and Canada?
• Will the license be honored by foreign societies?
• Is the transaction a complete buyout with no continuing royalties, or are there provisions for additional payments?
• How (and when) is the direct license fee and/or royalties to be shared with the songwriter or composer?
• Is the license for all media, selective media, or a single medium?
• What is the duration of the license?
• What benefits are you giving up by not licensing through the PROs, and what benefits are you gaining?
• Is there a long-term company-wide or industry-wide effect that may necessitate reexamination of any short-term benefits?
• Is there a guarantee that all other musical works are being licensed directly?
• Has the user indicated that a direct license is essential for the composition to be used in the project?
• Are royalties provided for exploitation areas outside the scope of the license?
Some Final Thoughts
Over the many decades that we have been involved in the licensing area, there are very few types of agreements that we have not seen or dealt with. The U.S. performance area particularly—as it is governed by Consent Decrees, rate courts, and competition among three separate PROs as to payments, policies, procedures, and contracts—is one that still remains a mystery to many despite the fact it is a primary source of income for songwriters, composers, and music publishers.
Direct licensing has been an option in the performance area since at least 1950 and has been evidenced in many different forms of agreements. In our experience, based on many individual situations, some have worked whereas others have proven to be a mistake. Our advice: have a thorough knowledge of all the possibilities; have a thorough knowledge of all the parties to the transaction as well as all the different entities in the licensing field; think globally if there is a foreign element; and be aware of what you are gaining and what you are losing both on a short-term and long-term as well as precedential and nonprecedential basis. Your past experience with PRO licensing in all media, not just the area specific to the agreement you are dealing with, should also be taken into account.
Simple advice but really not that simple in a world of separate traditional and new media licensing models, ever increasing royalty and/or fee proposals from potential users, and combined multi-right/multi-platform licensing schemes—many of which have not established a meaningful track record for one to determine whether or not the royalty and compensation framework you are negotiating or agreeing to will produce a fair and equitable return for copyright owners.
Copyright Todd Brabec, Jeffrey Brabec 2012. All Rights Reserved.
Blog post submitted by: Vanessa Kaster, Esq., LL.M.
Have you read that the American Pop Artist Robert Indiana (famous for his “LOVE” with a tilted O) will be featured in a new exhibition at the Whitney Museum in NYC? Have you also read that he missed out on controlling all the rights to his famous “LOVE” work because he didn’t copyright it properly?
In a recent NY Times article, Mr Indiana spoke about being brokenhearted over not properly copyrighting his work:
…because ‘LOVE’ – with its tilted O – wasn’t properly copyrighted, it spread to all sorts of places and products [I] didn’t want. And that broke [my] heart. ‘Rip-offs have done a great harm to my own reputation.’
This is an important reminder to artists and creative folks to copyright your work! For a work to be eligible for copyright registration it must be original and “fixed in a tangible form.” This can include any original work, fixed in virtually any tangible form. For example, original copyrightable works can include: sculptures, drawings, photographs, artwork, music, poetry, graffiti, jewelry designs, motion pictures, video clips, translations, texts, manuscripts, recordings…. etc. And the requirement that the work be “fixed in a tangible form” can include traditional mediums such as paper, canvas, clay, DVDs, CDs… and less traditional mediums such as a napkin… scrap of paper… and probably even peanut butter.
Please take Mr. Indiana’s words to heart and copyright your work. For more information on how to copyright your work see my earlier post titled: “Copyright Protection Only Costs $35.”
BY: Vanessa Kaster, Esq., LL.M.
For personalized legal services you are welcome to contact me at email@example.com.
See, The US Copyright Office Website at: www.copyright.gov; for more information on the upcoming exhibit of Robert Indiana’s work in NYC www.whitney.org/Exhibitions/RobertIndiana, @iplegalfreebies and www.kasterlegal.com.
As a post script, I mentioned peanut butter above as a possible medium for fixing an original copyrightable work, because, there is a contemporary Double Mona Lisa work made out of PB&J – www.artnet.com/usernet/awc/awc_workdetail.
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