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How Amazon’s Twitch.tv Cheats Music Creators

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Categories: Articles, Copyright, Infringement, Legal Issues, Music, Music Industry, Music Publishing, Performance, Record Labels, Royalties, Streaming, Videos, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

By:  Erin M. Jacobson, Esq.

This article was originally posted on Forbes.com.

Music creators (songwriters and performing artists) and rights’ owners (music publishers and record labels) are not collecting a new and substantial source of income – and most of them are not aware they are not collecting it. Enter Twitch, the website exploiting creators and owners without paying for a single cent of music usage.

What is Twitch

Twitch, a subsidiary of Amazon, is a live-streaming video platform that has “over two million broadcasters and 15 million daily active users.” Anyone can become a Twitch “broadcaster,” meaning users set up their own channels and live-stream various content, which includes, but is not limited to, video-game play, card games, pranks, craft tutorials and more.

The broadcasts start out as live streams and are saved on the channel for re-broadcasts and on-demand watching. Watching videos and channels on Twitch is free and publicly accessible to anyone with an Internet connection. Anyone can become a Twitch broadcaster for free and earn money directly from viewers. Broadcasters that contract with Twitch to become a partner or affiliate will earn money from Twitch directly, as well as from viewers. All revenue streams are described in the next two sections.

Income Earned by Twitch and Twitch Partners/Affiliates

  1. Ad Revenue: Twitch serves ads on all video content, which includes video-on-demand and pre-rolls, and collects ad revenue from showing these ads.
  2. Subscriptions: Viewers can subscribe to a particular broadcaster’s channel at pricing tiers of $4.99, $9.99, and $24.99, with these charges recurring monthly.These subscriptions allow viewers to support broadcasters and use special emotes (chat icons like emojis) that are accessible only to subscribers of a particular broadcaster’s channel.
  3. Bits: Viewers can contribute “bits” to a broadcaster during a stream. Bits are a digital currency within Twitch bought by users for real money, and contributing these bits to a broadcaster is basically like adding money to that broadcaster’s tip jar.
  4. Amazon Prime: Because Twitch is owned by Amazon, Prime members can use “tokens” from their Prime membership to subscribe to broadcaster channels on Twitch. Tokens renew every month, so a Prime member can re-subscribe to a broadcaster’s channel on a monthly basis using Prime tokens.

Twitch and the broadcaster split all income from subscriptions, bits, and Prime tokens, usually on at least a 50/50 basis.

Income Earned Directly by Broadcasters

  1. Donations:Viewers can contribute money directly to a broadcaster through third party services like StreamLabs, Muxy or StreamElements without buying bits.
  2. Media Share: Viewers can make “media share requests” through StreamLabsand StreamElements, meaning viewers can request a broadcaster to play a certain song, YouTube video, or other media within a live stream (hereinafter “Media Share(s)”). Prices for Media Shares are set by the broadcaster, and some broadcasters will start their pricing at $5 per request.

A Twitch Broadcaster’s Earnings

Twitch’s most popular broadcaster is 26-year old Tyler Blevins, known on Twitch as “Ninja.” Ninja reportedly earns over $500,000 per month on Twitch revenue alone, not counting his recent sponsorship deals by Red Bull and Uber. A recent Forbes article reported Ninja’s earnings calculation: “160,000 subscribers at a higher $3.50 rate per sub means he’s pulling in $560,000 a month from that revenue stream alone. Not counting Twitch bits. Not counting donations. Not counting 4 million YouTube subscribers.”

Ninja and most other broadcasters also use music in their streams. None of this music is licensed and none of this money is going to the music creators or rights’ owners.

Music Licenses Required

Platforms with user-generated audiovisual content require performance licenses for the compositions from performance rights organizations ASCAP, BMI, SESAC and GMR. Music users must obtain synchronization and master use licenses from the music publishers and record labels, respectively, along with paying negotiated fees to “synchronize” the audio with the visual elements. Also, rights’ owners may share in ad revenue in addition to or in lieu of those fees.

It should also be considered whether a broadcaster who repeatedly uses a particular song as a theme song or channel staple (like when Ninja does a victory dance at every game win to the song, “Pon Pon Pon”, performed by Kyary Pamyu Pamyu) is implying an association with or (false) endorsement by an artist, similar to when political candidates use certain songs in their campaigns.

How Music Rights are Being Violated

First, there is no evidence that Twitch has valid performance licenses in place from ASCAP, BMI, SESAC, or GMR (although they may be working on it). Therefore, Twitch is not paying for the repeated performances of music to audiences of millions.

Second, it is not known that any broadcaster using music on Twitch obtains synchronization or master use licenses, or pays any fees for the use of music. Also, neither Twitch nor the broadcasters are sharing ad revenue with rights’ owners.

Third, Twitch does not have its own content ID system like YouTube to track and claim uses of music. Twitch leverages Audible Magic to track audio uses after a live stream is over and will mute infringing content in the on-demand re-broadcasts, but not all content is recognized and removed. Also, there is no system to flag these infringing uses or mute them during a live stream.

All of the money earned by Twitch and its partner/affiliate broadcasters for subscriptions, bits, and Prime membership is retained entirely by Twitch and its partners/affiliates, and money earned from donations and Media Share song requests is kept entirely by the broadcasters. None of these funds are allocated to music creators and rights’ owners whose music is being used in these broadcasts.

Current State of Affairs

On June 22, 2018, the Twitch community received a shock when a group of its most popular broadcasters were banned from Twitch for playing a leaked version of a new song by rapper Juice Wrld that was initiated via Media Share song requests. Interscope Records issued DMCA takedown notices, and per Twitch policy, each infringer was banned for 24-hours.

This incident has shed a light on the use of uncleared music by Twitch broadcasters, but many have either continued with playing uncleared content or will not include certain music in the broadcasts. Ninja has turned off music content so he can then repost videos to YouTube in order to avoid YouTube claims by rights’ owners and keep his YouTube ad revenue. Ninja has publicly stated, “I’ve already reached out about getting rights to music … you can still get screwed over for playing music that doesn’t belong to you. … It’s such a nightmare, that it’s just not worth it.”

Interscope later supposedly stated the DMCA takedowns were an accident and Juice Wrld apologized to the Twitch broadcasters, saying “I will do what I can to prevent it from happening again.”

The National Music Publisher’s Association (NMPA) is rumored to be in negotiations with Twitch for licensing, but has not confirmed or commented as to the details.

Furthermore, Twitch isn’t the only site on the market. There are other, similar sites such as Mixer (owned by Microsoft), Facebook Gaming, YouTube Gaming, and Caffeine. There are also other music-centric sites, like Smule, using music in audiovisual content purportedly without permission or payment. More of these websites, as well as phone apps, with user-generated content, continue to emerge and the rate at which more new platforms are introduced is unlikely to slow due to the prevalence of streaming.

The Real Problems

First, rights’ owners are not enforcing their rights and making sure they receive payment for uses of their content. As stated at the beginning of this article, many creators and rights’ owners do not even know about these infringements. Those rights owners’ that are aware, like Interscope, have allowed the rumors of “accidental” takedowns to be the last word on the subject instead of taking a stand to protect their rights.

Second, Juice Wrld is an example of at least one artist condoning the Twitch broadcasters’ unauthorized use of his work instead of getting paid. Artists and songwriters can and should benefit from these uses, and condoning the infringing behavior allows for more of it, as well as a further loss of income to the creators and rights’ owners.

Third, streamers are often ignorant of how to obtain permission. Noah Downs, a video game lawyer at McDonald, Sutton & DuVal in Richmond, VA observes, “Some broadcasters reach out to artists directly, thinking that if the artist tweets ‘Sure, use my music!’ then it must be okay to use. It does not matter if a broadcaster has that kind of permission from the artist – generally the decision is up to the label.”

Fourth, many streamers feel entitled to play music without permission under the belief they are actually helping artists by giving them exposure. Famous artists and songs do not need free promotion from Twitch broadcasters – they are already famous. While exposure might be helpful for new artists to gain fans, it still doesn’t need to be for free.  For example, music service Pretzel Rocks and music company Monstercat have agreements with artists allowing music to be played legally on Twitch broadcasts with compensation being paid to the artists and songwriters.

In an ironic twist, Twitch viewers and broadcasters frequently use and repurpose clips of other Twitch broadcasters’ content without permission. The broadcasters complain about this practice and will submit content claims when their content is used without permission, but they fail to realize that they are doing the same thing to music creators and rights’ owners. Downs agrees, stating, “In many ways, broadcasters and musical artists are the same, and both deserve to be paid fairly.”

The bottom line is that allcreators and rights’ owners need to be properly compensated for uses of their work. Rather than ignoring or condoning infringing behavior, creators and rights’ owners need to keep up with new uses of music and take a stand to protect the value of their music and their livelihoods.

It’s time creators stopped feeling entitled to steal from and deprive each other of the fruits of their labor. It’s time people realized that using music without permission or payment not only cheats the creator or performer, but also impacts everyone that works for them or with them. It’s time the culture of all creators shifts to one of respecting one’s own work enough to get paid for it and respecting the work of others enough to get the proper permissions and pay the proper compensation. It’s time that everyone gets serious about valuing music.

 

*This article does not constitute legal advice.

Click here to contact Erin M. Jacobson, Esq. if she can assist you in your career with this issue or other music industry issues. (Ms. Jacobson does not shop, litigate, or accept unsolicited material.)

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New Video: This Trial Will Determine Songwriters’ Income Over the Next 5 Years

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Categories: Copyright, Legal Issues, Music Industry, Music Publishing, Royalties, Videos, Tags: , , , , , , , , , , , , , , , , , , , , ,

Read the article here.

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Erin M. Jacobson, Esq. on TAXI TV

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Categories: Copyright, Law, Legal Issues, Music Contracts, Music Industry, Music Libraries, Music Publishing, Performance, Royalties, Streaming, Videos, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

I appeared on TAXI TV yesterday discussing YouTube payments, royalty free music, cover records, and more!

Here’s the replay of the show:

 

Thanks to Michael Laskow of TAXI Music for having me on the show!

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The Most Common Music Publishing Agreements Explained!

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Categories: Articles, Music Contracts, Music Industry, Music Publishing, Royalties, Videos, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

All music starts with a composition, which is one of the reasons why I love the area of music publishing. Despite the low streaming rates, there is still a lot of activity and money to be made on the publishing side of music. Whether you are a writer signing with a music publisher, or you self-publish your own music, here are the some typical music publishing contracts:

Songwriter Agreement

A Songwriter Agreement usually involves a writer transferring 100% of the copyrights to the song(s) in your catalogue and/or written during the term to a music publisher and a 50/50 income split between the publisher and the writer. While these were some of the most common agreements 60 years ago and are still used today, they aren’t entered into as often because many writers value owning their content more in today’s music market.

Co-Publishing Agreement

A Co-Publishing Agreement is very common today and involves a writer transferring 50% of the copyrights to the song(s) to the music publishers and an income split of 75/25 where 75% goes to the writer and 25% goes to the publisher.

Administration Agreement

An Administration Agreement is also very popular today and involves no copyright transfer—the publisher administers (handles licenses, tracks royalties, etc.) without owning copyright. This agreement includes a 90/10 income split where 90% goes to the writer and 10% goes to the publisher as a fee for doing the administration.

Songwriter Split Agreement

A Songwriter Split Agreement is something that always needs to be completed when co-writing songs with others. It is essential to minimize disputes between co-writers, but is also usually required by publishing companies, whether you are your own publisher, administer for co-writers or other unrelated writers, or are signed as a writer to a music publishing company.  A Songwriter Split Agreement can be custom drafted, or one can use a template from Indie Artist Resource.

Licensing/Placement Agreement

Many “placement houses” or “pitching companies” that have traditionally just focused on pitching music for placement in TV and film are now getting into the publishing game. The copyright transfer and income splits tend to vary on these deals, and I have seen a lot of them called “Co-Publishing Agreements” that really do not follow the traditional co-publishing model. These can get tricky because of term variations as well as retitling and other practices.

 

Music publishing is one of the most complicated areas of the music business and as you may have gleaned from this article, the associated agreements and principles can get extremely complicated. Any artists/writers should have an experienced music attorney draft their music publishing agreements agreements for them if they are administering their own publishing or publishing for others. An experienced music attorney is also invaluable to review and negotiate any publishing agreements or licenses presented writers, as an experienced music attorney knows what the terms and custom and practice should be, as well as has the training to catch problems or unfair clauses that writers may miss.

I regularly draft, review, and negotiate all of these types of agreements, so please don’t hesitate to contact me if I can handle one or more of these agreements on your behalf.

Protecting and Profiting from Your Original Music - Erin M. Jacobson, Esq. (Indie Artist Resource)

If you are interested in starting your own music publishing company and administering your own publishing or publishing for other writers, download Erin’s video on Protecting and Profiting from Your Original Music where she explains:

  • how to set-up your own music publishing company for your original music
  • the basics of running your publishing company
  • the different royalty streams and publishing contracts you need to know
  • what agreements you NEED to have in place
  • how to protect your music the RIGHT way
  • requirements for collecting your royalty payments
  • the different ways of exploiting your music to earn money from it

Click here to download the video now.

 

Disclaimer: This article is for educational and informational purposes only and not for the purpose of providing legal advice. The content contained in this article is not legal advice or a legal opinion on any specific matter or matters. This article does not constitute or create an attorney-client relationship between Erin M. Jacobson, Esq. and you or any other user. The law may vary based on the facts or particular circumstances or the law in your state. You should not rely on, act, or fail to act, upon this information without seeking the professional counsel of an attorney licensed in your state.

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How Songwriters Just Got Screwed

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Categories: Articles, Legal Issues, Music, Music Industry, Music Publishing, Streaming, Videos, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

The Department of Justice has recently come to a decision regarding the review of the 1941 consent decrees that regulate the license fees and operations of ASCAP and BMI. Because ASCAP and BMI are non-profit organizations, they are subject to government-regulated consent decrees, meaning the government regulates ASCAP and BMI’s license fees and regulates how they operate in order to prevent monopolization and encourage competition. When ASCAP and BMI cannot settle on a equivalent fees, the dispute is taken to a rate court where the fee is settled. There have been massive lobbying efforts on the part of the music industry to reform these consent decrees and update them to the needs of writers and publishers in the Internet age.

A review of these decrees opened in 2014 in order to modernize the decrees so that they were more applicable to the ever-changing and evolving music industry – an industry where music is vastly consumed through Internet and streaming services. The goal of the modernization was to bring royalty rates up to fair market value and for the ability of music publishers to remove digital licensing from blanket licensing in order to earn more money from online music and digital streams. Much to the music community’s dismay, no changes were made to the consent decrees and the DOJ has also declared the implementation of full work licensing, also known as 100% licensing, which will end the current practice of fractional licensing that has occurred in the industry for decades.

Under the practice of 100% licensing, any person with a percentage of ownership of the work has the right to license 100% of the work, not just the percent owned. Even a 1% owner of a composition can now license 100% of the work without consent from the other co-owners, and is responsible to account to the other co-owners for their share of the payment. This creates problems because it enables music users to shop for the lowest price between owners and will make it harder for music owners to get paid due to frequent lack of communication between co-owners.  It also disrupts the effective system of fractional licensing, a system that has helped insure that owners receive equal income shares and rights.

The other aspect of the DOJ’s decision removes the option for music publishers and composition owners to do direct deals with digital and other service providers, while still allowing PROs to collect other aspects of performance income. Now, music publishers have to choose to be “all-in” or “all-out” with the PROs, allowing PROs to collect all performance royalties on their behalf or none. This will wreak havoc by further complicating the licenses needed by music users, complicated the tracking of performances from these users, and disrupting the income flow that would otherwise be collected by the PRO’s.

The DOJ’s decision will cause drastic decreases in the income streams for music creators. It not only affects the PRO’s themselves but also the thousands of music publishers, writers, companies, and foreign performance societies that hold business with these societies and rely on these rates.  Not only does the ruling further cripple the already narrowing income streams for music creators, but it also inhibits the industry from growing and progressing within the digital age, and prevents streaming from becoming a financially viable method of music consumption.

So what can you do?  As a music consumer, you can #valuemusic and pay for any music you listen to. If you own an establishment that uses music, make sure you are paying what licenses you can so the music owners and creators are fairly compensated. Everyone can go to standwithsongwriters.org and write to your congressional representative as well as sign up to get updates on this issue and how to stay involved in supporting this much needed reform in valuing music.

I became a music attorney because I am passionate about protecting and advocating for the rights of my clients — the creators and owners of musical works.  Contact me to protect your rights.

Disclaimer: This article is for educational and informational purposes only and not for the purpose of providing legal advice. The content contained in this article is not legal advice or a legal opinion on any specific matter or matters. This article does not constitute or create an attorney-client relationship between Erin M. Jacobson, Esq. and you or any other user. The law may vary based on the facts or particular circumstances or the law in your state. You should not rely on, act, or fail to act, upon this information without seeking the professional counsel of an attorney licensed in your state.
If this article is considered an advertisement, it is general in nature and not directed towards any particular person or entity.

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Don’t Get Screwed Over : 3 Scenarios Where a Handshake Deal Isn’t Enough – Video Format

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Categories: Legal Issues, Music, Music Contracts, Music Industry, Music Publishing, Videos, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

In case you didn’t read the whole article I just posted and you’d rather watch me explain it to you – here are the videos!

Part 1:  Songwriter Split Agreements

Part 2:  Producer Agreements

Part 3:  Band Agreements

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New Video: How Much Do Artists Earn from Spotify?

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Categories: Royalties, Streaming, Videos, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , ,

I talk about the numbers.