is a practicing attorney, experienced deal negotiator, and a seasoned advisor of intellectual property rights who protects musicians, songwriters, music publishers, Grammy and Emmy Award winners, and legacy artists and their catalogues through deal negotiations and proper intellectual property management.
Erin M. Jacobson, Esq. was interviewed on the BBC World Service show, Business Daily.
The topic of the overall segment was corporate control over creative works, but Erin’s interview was focused on explaining the dispute over Taylor Swift’s master recordings, and begins at about 12:50.
You can listen to the interview here.
It’s been a year since I wrote about Music Industry Cases to Watch in 2017 and, unfortunately, not much has changed. Here’s an update on what’s happening in the music industry and what to keep an eye on for 2018.
The Department of Justice v. ASCAP and BMI
Background: I previously wrote about this issue here and here, and there hasn’t been much forward movement. To briefly recap, performance rights organizations ASCAP and BMI asked the Department of Justice (“DOJ”) — which oversees the consent decrees governing ASCAP and BMI — to reform the decrees based on today’s digital age. The DOJ responded by ignoring the music industry’s requests for reform and instead mandating a model of 100% licensing, which restricts a performance rights organization to license rights to perform a work only if the organization has the right to license 100% of that work. BMI appealed the decision and got an immediate verdict in BMI’s favor. The DOJ appealed and oral arguments on the case were just heard. (More info here as well.)
What You Might Expect: It could go either way.
How It Could Affect the Industry: If the DOJ wins, then the music industry might need to change its business model and overhaul all of its longstanding licensing practices. If ASCAP and BMI win, then the music industry will be able to proceed with doing business as it has been for decades and continue making efforts to improve the existing system.
Potential Reform of Royalty Rates by the Copyright Royalty Board
Background: As I previously explained here, the Copyright Royalty Board (“CRB”) held hearings to potentially update the mechanical royalty rates paid to songwriters and publishers for reproductions of compositions. The current mechanical royalty rates for physical products and digital downloads are 9.1¢ for compositions five minutes or less in length, and streaming rates are at fractions of a penny. The National Music Publisher’s Association argued for rate increases on behalf of songwriters and publishers, while digital service providers (like Google, Spotify, Pandora, Amazon and Apple) offered alternative rate structures that may lower rates overall. The CRB recently raised some rates for master recording owners, but the determination on mechanical royalties has not yet been revealed.
What You Might Expect: Hopefully this first determination for master owners will predict a raise in mechanical royalties as well. Whether mechanical royalties are raised still remains to be seen, but any increases that are granted would probably not be enough to remedy the music industry’s struggle with the value gap. David Israelite, President and CEO of the National Music Publisher’s Association (NMPA), graciously provided some exclusive quotes for this article, saying: “We are cautiously optimistic the CRB will return a rate structure that values appropriately the contribution of songwriters to digital music services. This is a very important decision as interactive streaming services become the dominant format for the enjoyment of music.”
How It Could Affect the Industry: If the CRB maintains or lowers the rates in favor of the digital service providers, the music industry would continue struggling with low rates of payment. If the CRB increases the rates, it would help the music industry’s cash flow issues, but probably still not support the music industry at the level it needs. Israelite also commented to us, “Regardless of the decision, the time has come for the government to get out of the business of setting rates for songwriters and to let the free market determine the value of songs.”
Many Lawsuits Against Spotify
Background: Spotify is an interactive streaming service required to pay both mechanical and performance royalties. As detailed here, Spotify has already agreed to several settlements for failure to properly pay mechanical royalties and has been sued several times for the same reason, with those cases still pending. Spotify made the argument that it shouldn’t have to pay mechanical royalties, despite previously admitting that it needed to do so.
What You Might Expect: Spotify’s argument is flawed in many ways, but their $16 billion valuation may hold some clout, or at least the funds to continue pushing their position. The music industry hopes to quash their arguments, but acknowledges that the lawsuits are just Band-Aids, and is striving to implement a more efficient system.
How It Could Affect the Industry: A legal decision set in Spotify’s favor could mean massive losses of income to songwriters, music publishers, and the music industry as a whole. Hopefully, the streaming giant and the music industry will find a way to work together for their mutual benefit.
What You Might Expect: There will be a lot more of these deals happening in 2018.
What It Means for the Industry: The majors will continue to buy the indies, and the larger indies will buy competitors and smaller companies. The music publishing world might get smaller, but there will always be more copyrights to go around. The downside is that the investors coming in with the funds are usually not in the music industry, meaning that the music publishing industry may now have to answer to venture capitalists, which has been a problem for years with major record labels. The good news is that these non-industry investors will need current industry experts to manage the catalogues they have purchased, continuing jobs and revenue flows throughout the industry.
Erin M. Jacobson is a music attorney whose clients include Grammy and Emmy Award winners, legacy clients and catalogs, songwriters, music publishers, record labels, and independent artists and companies. She is based in Los Angeles where she handles a wide variety of music agreements and negotiations, in addition to owning and overseeing all operations for Indie Artist Resource, the independent musician’s resource for legal and business protection. Ms. Jacobson also serves on the boards of the California Copyright Conference (CCC) and Association of Independent Music Publishers (AIMP).
Radio Seeks to Pay Songwriters Lower Rates — Again
By: Erin M. Jacobson, Esq.
This article was originally published on Forbes.com.
A committee representing roughly 10,000 commercial radio stations has sued performance rights organization Global Music Rights (“GMR”) in an effort to further reduce the amount radio stations pay to music composition creators and rights owners for performances of their works. This committee is the Radio Music Licensing Committee (“RMLC”) and it claims that GMR has created an artificial monopoly over works in its repertoire.
Performance rights organizations (“PRO’s”) are organizations that track and collect performance royalties on behalf of songwriters and music publishers. In the United States, there are four PRO’s: ASCAP, BMI, SESAC, and GMR. ASCAP and BMI are the two largest U.S. PRO’s and are also non-profit organizations. Since 1941, ASCAP and BMI have been subject to consent decrees issued by the Department of Justice. These consent decrees are agreements that allow the government to regulate ASCAP and BMI’s license fees and how they operate in order to prevent monopolization and encourage competition. SESAC and GMR are both independent, privately owned companies that operate on a for-profit basis and are not subject to consent decrees.
Music industry mogul Irving Azoff founded GMR in 2013 in order to provide a more boutique experience for managing performance rights licensing and potentially command higher rates for the performances of works in its repertoire, which includes compositions written and/or performed by artists such as Adele, The Beatles, Pharrell Williams, Katy Perry, Madonna, and many more.
Terrestrial radio makes its money on advertising revenue, and while radio is far from dead, it no longer holds the status of its heyday. Terrestrial radio and other broadcasters regularly fight to reduce license fees, as terrestrial radio lobbyists were also part of the group in favor of the Department of Justice’s crackdown on ASCAP and BMI’s licensing platforms, the outcome of which is still pending.
Most observers of this situation usually fail to mention that the public perception of radio’s purpose is music promotion. Without music driving the listenership of certain stations, those particular stations would not earn the ad revenue from advertisers who want to reach those stations’ listeners. However, the stations repeatedly seek to reduce compensation to the songwriters and music rights owners that create the very music that establishes their listenership and drives their revenues.
Terrestrial radio isn’t the only industry trying to reduce payments to music creators and rights’ owners. Those of us who regularly handle music licenses know that attempts to undervalue music also come from Internet and digital companies, as well as small bars and restaurants. Visual productions seeking synchronization and master use licenses also regularly try to lowball license fees or request gratis uses.
It is up to music creators and rights’ owners to value music (#valuemusic) and require proper payment for uses of their music, and to those that use music to recognize the value that music brings to their project or business.
*This article does not constitute legal advice.
Erin M. Jacobson is a music attorney whose clients include Grammy and Emmy Award winners, legacy clients and catalogues, songwriters, music publishers, record labels, and independent artists and companies. She is based in Los Angeles where she handles a wide variety of music agreements and negotiations, in addition to owning and overseeing all operations for Indie Artist Resource, the independent musician’s resource for legal and business protection.
I recently did an interview on the The Gen Y Success Show and this has been one of my favorite interviews! It’s a little different than some of my interviews because it’s not about the music business — this interview is about my path in becoming a music attorney, my love of music (and a few examples of my favorite bands and concerts), my tips on how to network effectively, and more!
“…[Erin Jacobson] established herself as an authority, not only as a lawyer, but within the music industry itself.” ~ Jason D. Bay, host of the GenY Success Show
I was recently interviewed on the Break the Business podcast about the ongoing legal drama between Kesha and producer Dr.Luke. Download or listen to the interview on iTunes or Soundcloud. The interview is on Episode 28 and my interview starts at 20 minutes into the show.
Have a question about your deal? Contact Erin to book a consultation.
On November 7, 2015, I spoke at the TAXI Music Road Rally on music library contracts.
I began the session by explaining the most important and common deal points in music library contracts, and then discussed specific contract clauses and wrapped up by answering questions from the audience.
Many songwriters and composers came up to me after the session to tell me how helpful the session was for them. I am so grateful I was able to be of service to them!
Here are a couple photos from the event:
Erin M. Jacobson on stage with TAXI CEO Michael Laskow at the 2015 TAXI Music Road Rally.
Client Rob Christie of Robo Records came out to show some support!
I’m happy that the first post of 2014 is an interview with Michael Eames, President of PEN Music Group.
Michael Eames, President of PEN Music Group
Founded in 1994, PEN is a full-service independent music publishing company with a worldwide presence who is celebrating its 20th Anniversary in 2014. PEN offers efficiency and personal attention as a boutique company. With PEN’s A-list music contacts in film, TV and advertising, and a success rate that continues to grow (with 100+ placements each year), it is an effective alternative to the large multinational publishing companies. PEN has formed strategic partnerships with several record labels to leverage collective strengths and has joint ventures with other respected companies. PEN’s songs have also been recorded by artists including The Black Eyed Peas, Celine Dion, the cast of GLEE, Selena Gomez, Miley Cyrus, kd lang, Santana, Christina Aguilera, Corinne Bailey Rae, Faith Hill, Paulina Rubio, Macy Gray, Kenny Rogers and Luther Vandross, among countless others.
1. Describe a typical day at the office.
I am not sure there is a truly “typical” day which is why I like being a publisher. But generally for me the office day starts at 8:00 am after I drop my son off at middle school. Then the day for me will typically involve all of the following in no particular order:
– responding to emails from Europe or overseas that came in overnight
– seeking approvals from clients for requests for use of their music that we receive
– tackling some sort of software programming with our state-of-the-art copyright and royalty system called CORE so that I can continue to try to make our administrative processes as efficient as possible
– pitching our music to any needs or searches that we get (and we can sometimes get as many as 5 a day)
– seeking out new clients and business opportunities via either online research or reaching out to lawyers and business managers about their clients that may be looking for deals
– responding to inquiries from existing clients who have questions or needs
– meeting either individually or as a group with our staff so that we can keep focused on all the items that need to be done, both on the administrative side and the creative side.
2. What is your favorite part of your job?
Even though we have been placing music in film/TV/ads for our entire 20 year existence (since 1994), nothing beats the email that we receive when someone says they want to license something and need a quote, etc. You then feel all the effort is worthwhile and you can’t wait to let the client know that a use may happen. And since things sometimes fall out in the mix, the ultimate satisfaction is tuning into TV and hearing our music and or in a film in a theater, etc. There’s a sense of pride in knowing that that use would not have happened without our efforts and it’s a great feeling.
3. What are some projects that you are currently working on that you can discuss?
Since 2014 is PEN Music Group’s 20th anniversary, a lot of the projects these days are internal projects that we are doing to acknowledge and capitalize on the anniversary. For example, in late January 2014 we are going to launch Phase 1 of our new website that we have been working on for a year. There will be a few phases after this initial rollout, but we’re looking forward to getting this out there. We are also always planning and refining our CORE software that handles all our copyright and royalties so that we can handle as much volume as possible with as little human interaction as possible. This Spring we are also launching our web-based pitching system which completely integrates with CORE. This will enable us to only have to enter certain data on a song once and then all that data gets pushed out to our pitching system so that as long as we have access to a browser on a laptop or mobile device, we will be able to search our catalogue of music and create pitches that we can send to music users who are in need of music for their projects and then we can track who streams what, who downloaded what, and generally see how the outside world is interacting with the music that we assemble and pitch.
4. What do you think are the most important issues facing songwriters and publishers at this time?
I think the overall topic that we must address is the constant fight to devalue music. And that fight is both with external forces as well as internal ones. Let me explain. First, it is clear we are moving towards a streaming-based world. And fast. Right now the streaming rates are crap, especially given that there seems to be more and more evidence that streaming is displacing sales that have historically given us our mechanical royalties. We must work together as content owners as well as with the digital services to structure rates that are fair and that allow digital services to flourish. I fear it is going to get a bit worse before it gets better, but I think ultimately this is going to be a lucrative world but it’s one in which music must be properly compensated for. On the internal side, especially in the world of synchronization, there is a constant erosion of fees. And this is partly due to some artists and publishers continuing to allow their music to be used for lesser and lesser fees for the increased broad media rights that producers need these days. This is a tough one – because if you say no, there are probably 10 other companies right behind you who will allow their music to be used and you want the use to happen as opposed to not happen. But sometimes you just have to take a stand and explain how your music is worth more than what is being offered and you can’t allow it to be used except for a fair price. Every time you allow your music to be used for free or practically free, another content producer goes off thinking for their next project that they don’t need a big music budget because they can always get music for free or next to free. This is a losing battle and if we are to maintain (or maybe even increase!) the value of music, we must think carefully now about what our individual and collective actions are doing to the perception of music’s value.
5. Everyone is now on the “placement” train, where they think the only viable way to make money is to get placements in TV and film. Do you agree with this?
Generally speaking I do agree with this. But I think it depends on what kind of artist and songwriter you are. Albums aren’t selling what they used to so everyone is looking at synch to make up the difference (see previous answer directly above). And the synch world can still be a lucrative area, especially in ads and trailers where the fees are still higher generally than uses in TV and film projects. TV uses are also in many ways the only “radio” that many artists receive these days given the corporate dominance in mainstream radio programming. A successful TV show using your music can mean 10 million+ people hearing your song in one night. That kind of exposure can’t be beat, especially if it’s a placement where you can actually hear the song as opposed to it just being background in a bar for example under dialogue where no one will hear it. But successful touring artists can still make a lot of money off their music and never get a placement. I talk to the indie artists about the concept of the “superfan” – strive to find, develop and maintain a direct artist-fan relationship with 1,000 people who love what you do so much that through the year they will spend $100 on you (whether that be in CD sales or digital downloads, tickets to a show, merchandise, etc.). If you can do that, that’s $100,000 a year and you are successful at music and you’ve been able to do that with just 1,000 people and no placements. It can be done. And then there are some artists that are just synch-focused and they work hard and make a good living. It can be done a number of different ways, but either way it takes commitment and a dedicated work ethic.
6. What other avenues are still profitable for publishers and writers?
Other than the placement world, I think everyone is looking to YouTube to be a new frontier of sorts in generating income. And you can generate a lot of income on YouTube but it takes a LOT of views to have a decent financial impact. We are in a visual world now – any artist who wants a fighting chance should plan on making videos of their songs – whether they are gimmicky videos that go viral or not. It’s all about getting the exposure. But once you can get it (however you do it and it can be done outside of the major label paradigm), it’s how you use it and manage it that will determine your financial success. As mentioned before, successful touring artists sell records still and that generates mechanical income. It all feeds upon itself – the trick is figuring out where an artist or songwriter will first connect and then you take that and run with it.
7. What types of deals are mostly being offered now among the independent publishers?
I think generally speaking the deals fall into 1 of 3 types: 1) the placement/licensing deal; 2) the admin deal; and 3) the co-publishing deal. Regarding the placement/licensing deal, as the name implies this deal’s main focus is synch. The publisher generally doesn’t get involved in any aspect of the writer/artist other than synch. This can be a way for a publisher and artist to develop an initial working relationship to scope each other out. But one word of caution to the artist is non-exclusive deals that get offered that involve re-titling the songs. This is increasingly being frowned upon for a variety of reasons, so consider deals of this nature that are offered very carefully. Then there’s the admin deal. In this scenario, the writer/artist owns everything 100% still and the publisher takes on the administrative and hopefully creative responsibility to make things happen for the artist. The more things that happen, the more income is earned for both parties. Then lastly there’s the co-pub deal. In these deals the publisher and the writer/artist split the publishing 50/50 and this deal generally involves some sort of upfront financial payment or investment in the writer/artist. This is the highest level of commitment and as long as you feel you have the right partner who believes in what you are doing, this deal structure can work out well. It all depends on what you as the writer/artist feels comfortable with. Meet lots of publishers and go with who you feel “gets you” and who is offering what you feel is a fair deal.
8. What is an independent publishing company looking for when considering signing a new artist?
Speaking for us as PEN Music Group, we are looking for great music in genres that we don’t have much of. We don’t like to take on too many artists of the same genre where they will be cannibalizing each other in the opportunities we bring to them. But it has to be music that we all connect and react to. This is sometimes hard to put into words – it’s just a gut feeling. But you know it’s good when you hear it. Then we want to spend the time getting others to hear the music since we feel they will like it. We are also looking for writer/artists who know how much hard work is involved in this career and don’t expect that if we take them on we will do all the work for them. No one will ever work as hard for what they do as they should. And if we see someone who is smart and organized and business savvy on top of being creatively unique, then we know we have something.
9. Is there any criteria an artist/writer needs to have to even be considered for a deal?
Existing income and activity is always nice, but in the end it comes down to the music. It has to be great music. If we don’t react to it, then we won’t fight for it. It’s all about commitment. If they have committed to doing the best music possible and that shows, then we will want to get involved whether there is any existing income or not. Because at that point we believe we can generate the income.
Billboard reports the U.K. has extended its copyright provisions for sound recordings, changing the term of protection from 50 to 70 years. This twenty year extension will benefit performing artists, and of course, record labels. The extension applies only to recordings, not to compositions, but still must offer a great relief for many legacy acts and rights holders that were losing or about to lose recording rights.