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Erin M. Jacobson, Esq. on ABC’s Nightline

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Categories: Catalogue Acquisitions, Interview, Music Catalogues, Music Contracts, Music Industry, Record Labels, Royalties, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Erin M. Jacobson, Esq. appeared on the 7/1/19 episode of ABC’s Nightline to discuss the current news issue of Scooter Braun’s purchase of Big Machine Records (and Taylor Swift’s master recordings).  You can see Erin’s segments at 5:40 and 6:30.
Click here to watch!

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Copyright Terminations: What Rights’ Owners Need to Know

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Categories: Articles, Legal Issues, Music Industry, Music Publishing, Terminations, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

By:  Erin M. Jacobson, Esq.

This article was originally posted on Synchtank.

The window is open for authors and heirs to recapture ownership of their copyrights.  Terminations create a lot of new movement for copyrights in the marketplace and rights’ owners need to be just as knowledgeable as authors and heirs in order to stay competitive.

Statutory Requirements

Statutory terminations come with many complexities, but the basics are as follows:

In the United States, termination of a grant can be effected during a five year period: (1)  Beginning 56 years after the original copyright date of the work for grants made before January 1, 1978; or (2) Beginning 35 years after the date of the grant for grants executed on or after January 1, 1978.*

Both of these categories of termination require that proper notice be sent anywhere between ten and two years before the effective date of termination and notices must also follow strict requirements.  Works for hire and grants by will are not terminable and terminations under U.S. copyright law only apply to U.S. rights.

Outside of the U.S., there are some other countries that have their own rules regarding terminations, most notably, the British Commonwealth countries.  British Reversionary Rights are generally uniform throughout the Commonwealth, but vary slightly per country and must be assessed on a case-by-case basis. Other countries do not have any termination rights included in their copyright laws.

Information on the recapture of music rights usually refers to composition rights only, as whether master recordings rights can be recaptured is the subject of an ongoing debate in the U.S. that will only be solved by litigation or a change in copyright law.

Information on the recapture of music rights usually refers to composition rights only, as whether master recordings rights can be recaptured is the subject of an ongoing debate in the U.S. that will only be solved by litigation or a change in copyright law. The issue here is that, as stated above, works for hire are not terminable, and most recording agreements state that the masters are works for hire for the record company.  However, U.S. law requires that for a work to truly be a work for hire, it must be either created by an employee within the scope of employment, or specially ordered or commissioned by the company, with an agreement in writing stating the work is a work for hire, and the type of work must fall within nine categories established in the law.  The problem here is that artists are not employees of record labels and master recordings are not one of the nine categories required for works to qualify as works for hire.  Until this point, labels have been successful in retaining the masters by arguing the masters qualify as collective works or compilations, and by giving artists a few additional royalty points.  However, at the time of this writing, there is a class action lawsuit pending in California to decide this very issue.

The Real Reason Why Authors and Heirs Want to Recapture Their Rights

Although the legal requirements for termination are imperative to navigating the copyright recapture landscape, most discussions on this topic fail to address why authors and heirs are so keen to exercise their termination rights in the first place.  The answer to this question is that authors and heirs are terminating because they are not happy with their current publisher or label.  This unhappiness normally is caused by the companies’ lack of attention paid to the catalogues, which results in significantly decreased earnings for those catalogues.

Authors and heirs are terminating because they are not happy with their current publisher or label.  This unhappiness normally is caused by the companies’ lack of attention paid to the catalogues, which results in significantly decreased earnings for those catalogues.

Large companies, typically the “majors”, tend to focus their efforts on acquisitions and growth, which is not bad, but they fail to increase staff and training at the same rate as their growth.  This leaves many compositions lost at these large companies because they are not being actively exploited and, in many cases, the staff isn’t even aware of the compositions.  Further, when creators or heirs do try to get a company’s attention, their efforts are often ignored because the company does not want to spend time and resources on low-earning compositions.  To further exacerbate the situation, many of these companies are not even accounting properly to the creators or heirs, and again, won’t take the time to investigate or remedy the situation because their efforts are focused solely on the highest earning compositions and further growth.

On the master side, not only are the royalty rates from the labels paltry, but in many cases, the albums are out of print and not being sold, and therefore the creator or heirs really just want a chance to do something with the music again instead of accepting the music’s fate of being locked in a vault, with the original tapes rotting away, never to see the light of day again.

In my experience, independent publishers tend to receive fewer termination notices because they do a better job with attending to and exploiting their catalogues, and usually make fewer mistakes in collection and accounting.  I work with many independent publishers (both those I represent and those who work for my author/heir clients) who do a fabulous job making sure these works continue to stay relevant and earn income.

Handling Terminations

Some companies think they can prevent authors from terminating their rights by inserting provisions in their contracts whereby the authors waive their rights of termination. However, this practice is completely ineffective because the right to terminate cannot be waived via contract. Some companies also try to prevent terminations by making new, and equally unfair, deals with aging authors and heirs.  I’ve even seen major companies effectively force creators or heirs into a new deal by using the threat of litigation against them when these companies know full well that their opponents do not have the resources to fight to reclaim their rights.

The other tactic companies take is to ignore received notices of termination or wait until right before the effective date to raise objections in an effort to deprive the authors/heirs with ample time to respond.  It’s a common joke throughout the subset of attorneys dealing with terminations that the fastest way to be ignored by a company is to send them a termination notice (or tell them they owe you money).

When rights’ owners receive a termination notice, they should address it and engage good counsel who knows how to deal with the dynamics of these situations.  Typically, once companies can no longer ignore the notices, they then dispatch the same few lawyers to repeatedly make the same narrow deals.  When I represent music publishers, I work with them on specific strategies to address the catalogue at issue and craft a deal that benefits both parties in each situation, whereby the company can retain the work and continue to reap the financial benefits, but whereby the author or heirs also feel their needs are satisfied.

Music will always be the foundation of the music business, but the music business is not the same as it was 56 or 35 (or even 10) years ago. Music has a life and legacy of its own and how these copyrights are handled can either set them up to flourish or be forgotten.

Music has a life and legacy of its own and how these copyrights are handled can either set them up to flourish or be forgotten.

The changing times require changing ways and my practice focuses on this innovation to benefit both the rights’ owners and creators so that both can continue to benefit from these magnificent musical creations.

 

* Technically, section 203 of the U.S. Copyright Law says the window opens at the end of 35 years after the date of execution of the grant, or if the grant covers the right of publication, then at the end of 35 years after the date of publication or at the end of 40 years after the date the grant was executed, whichever is earlier.

Note:  This article does not constitute legal advice.

 Erin M. Jacobson, known as “The Music Industry Lawyer”, represents and protects independent, established, and legacy songwriters and artists (including their heirs and estates), distinguished legacy catalogues, independent music publishers, Grammy and Emmy Award winners, and other music professionals at her law practice based in Beverly Hills, CA.  For more information, visit www.themusicindustrylawyer.com.

 

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5 Things to Do If You’ve Inherited a Music Catalogue

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Categories: Articles, Copyright, Legacy, Legal Issues, Music, Music Catalogues, Music Contracts, Music Industry, Music Publishing, Royalties, Terminations, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

By:  Erin M. Jacobson, Esq.

  1.  Call Me.

Seriously.  Call me.  I regularly work with legacy artists/songwriters/composers, heirs, and estates to protect and revitalize their catalogues.  I assess what they own, what the current state of the catalogue is, and the various options for the catalogue to increase income while protecting the legacy of the creator and the works.

  1. Assess What is There.

Decisions involving how to move forward with a catalogue can’t be made if one doesn’t know what (s)he has to work with.  The first step is to know what compositions are in the catalogue, what agreements are in place, and who is collecting the income.

If the details are fuzzy, don’t worry.  Most heirs and estates do not have previous experience with music catalogues and start with a vague idea.  It’s my job to assist in making those fuzzy details become clear so that my clients know what they have, what options are available, and implement a plan to move forward.

  1. Clean It Up.

Not only are the details of most inherited catalogues fuzzy, but the money is too.  Most older catalogues have a lot of mistakes in the maintenance and management of the catalogue which prevents the catalogue from reaching its earning potential.  I’ve worked on catalogues with 50-year old mistakes not corrected by the current owner, problems with chain of title, improperly handled derivative works, and more.  I fix the problems and get income flowing again.

  1. Terminate.

Copyright law provides a valuable gift to authors and heirs, which is the right to recapture ownership of copyrights.  That’s right — authors and their heirs can reclaim ownership and control over their rights and how they are exploited.  However, this gift comes with strict requirements as to when and how rights can be recaptured.  (See articles with more information hereand here.)  An attorney with extensive experience in copyright terminations is essential here, because there is only one chance to recapture rights – and that chance is lost if deadlines are missed or the procedure isn’t followed correctly.

  1. Decide a Plan of Action.

I frequently see legacy artists and songwriters, and their heirs, who have been misguided in the management of their catalogues, who have lost rights to recapture, who don’t realize their catalogues are under-earning, and who don’t know where to start.   The right advisors are tantamount to a successful recapture process and future for the catalogue.  Each catalogue is unique and each client has different goals for the catalogue, its income, and the preservation of its legacy.  Some options include negotiating a new deal for the catalogue, selling the catalogue, or self-publishing the catalogue.  I work specifically to achieve what is best for each catalogue and each owner of that catalogue, and the results most often include clarity of mind and increased income for beneficiaries of the catalogue.*

There is only one chance to reclaim ownership of a catalogue and revitalize it – and the catalogue deserves it.

Please contact me to assist you in taking care of your legacy catalogue.

 

*  Information stated is based on past experiences.  Results are not guaranteed.

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Erin M. Jacobson re-elected to AIMP Board of Directors

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Categories: Honors and Awards, Music Industry, Music Publishing, Tags: , , , , , , , , , , , , , , , , , , , ,

I am happy to announce that I have been re-elected to the LA Board of Directors of the Association of Independent Music Publishers (AIMP).

wb-aimp-luncheon-global-industry-110216AIMP is an industry group focusing on independent music publishers and songwriters.  Members (my colleagues in the industry) vote for Board members, so I am honored to have been chosen.  Keep an eye on the AIMP website for future events and to become more involved with this great organization.

 

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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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Music Industry Cases And Issues To Watch In 2018

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Categories: Articles, Legal Disputes, Legal Issues, Music Industry, Music Industry Interviews, Music Publishing, Royalties, Streaming, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

By:  Erin M. Jacobson, Esq.

This article was first posted on Forbes.com.

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.

Many Music Catalogues Being Sold

Background: It’s old news for music industry folks that a large number of record labels are owned by just a few major corporations. However, acquisitions of composition catalogues are now hitting the spotlight after traditionally not garnering much attention. The catalogue purchase and sale market is booming, and those of us in this space (like me) are regularly looking at either buying or selling catalogues, depending on who we are representing. Many music publishing companies are also raising a lot of money from outside investors in order to gobble up other substantial catalogues. There are even rumors of music publishing giant EMI for sale at a $3 billion valuation.

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.

*This article does not constitute legal advice.

Special thanks to David Israelite, President and CEO of the National Music Publisher’s Association (NMPA) for graciously providing quotes exclusive to this article.

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).

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Erin M. Jacobson Speaking at Taxi Road Rally

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Categories: Music Contracts, Music Industry, Music Libraries, Speaking, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

I will be speaking at the 2017 Taxi Road Rally, November 3-4, 2017!

Here is my schedule:

Friday, November 3, 2017 from 2:45-4:15 pm / La Guardia Room (Mezzanine Level / 2nd Floor)

Don’t Get Screwed! How to Protect Yourself as an Independent Musician with Erin M. Jacobson, Esq.  An explanation of the most common types of ways independent musicians and songwriters get screwed and how to protect yourself before it happens. This class will include real examples from artist’s careers, as well as a discussion on what contracts are necessary to prevent these scenarios, along with an opportunity for Q&A with music attorney Erin Jacobson.

(I will also participate in the mentor lunch on Friday.)

Saturday, November 4, 2017 from 4:30-6:00 pm /  La Guardia Room (Mezzanine Level / 2nd Floor)

Understanding Music Library Agreements with Erin M. Jacobson, Esq.  Music attorney, Erin M. Jacobson will talk about the types of deals offered and explain what contract terminology and certain clauses mean. You may bring printouts of particular clauses that have you stumped and Ms. Jacobson will read them and explain what they mean! This class could save you a world of hurt down the road. It’s a Do-Not-Miss session if you’re pitching to music libraries!

Looking forward to seeing you there!

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Want to Get Your Copyrights Back? (Here is What You Need to Know)

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Categories: Articles, Copyright, Music Industry, Music Publishing, Terminations, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , ,

By: Erin M. Jacobson, Esq.

There has been a lot of buzz lately about songwriters and artists (and their heirs) reclaiming thei copyrights and striking new deals or self-administering/self-releasing. What many want to know, is who can reclaim copyrights and how?

There are certain provisions in the copyright law where, under certain circumstances, an author or that author’s heirs can reclaim copyrights that have been granted away at some time in the past. It’s a really complicated section of the law, and not all attorneys are well-versed in it, so it is important to make sure whoever you hire really knows the intricacies of filing terminations.

For purposed of this article, I’m going to go over the basics.

There are two main sections of the copyright law that apply to copyright terminations:

  • Section 304c applies to copyrights and grants before January 1, 1978. Termination under this section can be effected between 56 and 61 years after the original date of copyright, and termination may be effected in regards to one author’s share of the work.
  • Section 203 applies to grants made after January 1, 1978, regardless of the original copyright date of the work. Grants falling under this section may be terminated between 35 and 40 years after the grant date. If the grant includes the right of publication for the work, then that five-year period begins either on 35 years after the date of publication, or 40 years after the date of the grant, whichever is earlier.
  • Note that under Section 203, grants signed by more than one author require a majority of those authors or their heirs to terminate the grant. It is not like section 304, where one author’s share can be terminated independently. However, there are exceptions to this rule if separate grants were signed, such was the point at issue in the Victor Willis/ “YMCA” case.

Who can terminate?

  • The author
  • The author’s heirs, if the author is no longer living. (There are only specific people in a specific order of succession that are considered heirs. Again, make sure you have an attorney experienced with terminations advise you.)
  • If the author’s share is being terminated by the author’s heirs, those heirs must make up a majority (at least 50%) of that author’s termination interest.

Some additional points that apply to terminations under both sections:

  • When you want to effect a termination, you actually have to send a notice to the current owner of the copyright in advance of the termination date. This notice must be served not more than ten, but not less than two years before the effective date of termination. If you miss this notice window, you lose your right to terminate.
  • The notice must be recorded with the Copyright Office before the effective date of termination to be valid.
  • Works made for hire or grants by will are not eligible for termination.
  • Termination is a matter of law, so it can be affected regardless of any contract or agreement to the contrary.

Why is the right to terminate important?

Recapturing rights and starting to exploit them again can revive older compositions or catalogs, and help them to start making money again when they’re currently lost and forgotten in the catalogs of large music publishers. Also, this increased exploitation (or an advance in a new deal) would mean more money for the authors or heirs. The decision whether to terminate must be carefully considered based on the catalog at issue as well as the situation of the authors/heirs.

I regularly work with legacy clients and their heirs to determine the best plan for the catalog and filing termination notices, if that is the best choice for the client, so please contact me if I can help you with your catalog.

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 Spotify Has Waged War With The Music Industry

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Categories: Articles, Copyright, Music Industry, Music Publishing, Royalties, Streaming, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

By:  Erin M. Jacobson, Esq.

This article was first published on Forbes.com.

Spotify has waged a war with the music industry. The streaming company has a history of not paying mechanical royalties to songwriters and music publishers, and has already settled two separate class action lawsuits for failure to pay mechanical royalties – the first brought on behalf of music publishers by the National Music Publisher’s Association (NMPA) and the second, known as the Lowery/Ferrick case, brought by independent songwriters. Now, a host of top songwriters, including Tom Petty and members of Rage Against the Machine, Weezer, The Black Keys, and more, have come forward urging the court not to approve the terms of the Lowery/Ferrick case. These songwriters oppose the settlement amount in the Lowery/Ferrick case because when the costs are broken down, Spotify’s liability for not paying mechanical royalties would be to pay a mere $3.82 per infringed composition. The maximum liability under the law for copyright infringement is $150,000 per infringed composition. Quite the difference.

As I previously reported, Spotify was also hit with two independent lawsuits – again for failure to pay mechanical royalties — brought by songwriter/publisher Bob Gaudio and music administrator Bluewater Services Corporation. Even more recently, seven other music publishers have sued Spotify for the same violation.

The Gaudio/Bluewater suits accused Spotify’s practices being reminiscent of Napster, which caused Spotify to fire back with the outrageous claim that Spotify should not have to pay mechanical royalties to songwriters and music publishers at all. More realistically, Spotify has argued that copyright law does not define streaming and places the burden on the plaintiffs to show that Spotify is creating a “reproduction” and therefore required to pay mechanical royalties.

As I explained in my last article, streaming requires several licenses – sound recording licenses from the record labels; performance licenses for the compositions from performance rights organizations such as ASCAP and BMI; and mechanical licenses for the reproduction of the compositions. Spotify now argues that it is akin to other streaming services like Pandora, who only have to pay performance royalties. However, Spotify’s argument is flawed for several reasons.

  • First, Pandora and similar services online radio services are classified as non-interactive services because a user cannot choose to listen to a specific song on demand. This is similar to terrestrial radio, except it’s online instead of on the FM dial. In contrast, a Spotify user can choose and play any song the user wishes on demand, which makes Spotify an interactive service. Copyright law makes important distinctions between non-interactive and interactive services, and for the relevant purposes here, the most important difference is that non-interactive services are only required to pay performance royalties (as the use is only a performance, again, like terrestrial radio) and interactive services are required to pay both performance and mechanical royalties (because the nature of the technology actually consists of a reproduction of the data file in addition to the performance itself). Therefore, Spotify cannot rely on the requirements of a separately classified type of service when those requirements don’t apply to Spotify’s service.
  • Second, Spotify has previously stated that it “needs” mechanical rights as part of its operations and has argued in rate court proceedings to weigh in on what mechanical rate amounts it should have to pay. It is both hypocritical and faulty reasoning for Spotify to say it needs certain rights and subsequently argue the opposite.
  • Third, Spotify has previously settled the two class action lawsuits mentioned above in order to rectify its previous non-payment of mechanical royalties. Spotify’s excuse in these cases was that it was too difficult to pay everyone owed due to the lack of a comprehensive music industry database. Once again, Spotify previously accepted that it needed to pay mechanical royalties, but made excuses for its failure to do so, which is in direct opposition to its current claim that it does not need to pay mechanical royalties at all.
  • Fourth, the music industry has long ago come to a consensus that an interactive stream does require a mechanical license and there is evidence that Spotify actually does create reproductions of the files, specifically on users’ mobile phones.

While Spotify’s argument that a stream does not require a mechanical license was recently rejected in court, Spotify can still continue asserting that argument going forward. If a legal decision in Spotify’s favor set a precedent on this issue, it could mean massive losses of income to songwriters, music publishers, and the music industry as a whole. While there are several theories as to why Spotify has taken this approach, the simplest answer seems the most obvious – Spotify doesn’t want to pay. The scariest part of this whole situation is that with Spotify’s massive amount of funds, it has the power to continue litigating this issue with efforts to change the laws and practices of the industry to conform to its unwillingness to pay for the music it uses. It is unacceptable that Spotify has built its entire business on the usage of music content, but yet continually tries to get out of paying for the very content that sustains its customer base. Without music, there is no Spotify and it’s time Spotify stopped making excuses and started to value the music that built its 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 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).

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Sync Licenses Explained!

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Categories: Articles, Copyright, Film, Music Contracts, Music Industry, Music Publishing, Performance, Royalties, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

By:  Erin M. Jacobson, Esq.

A synchronization license is a license to use a composition in an audiovisual production. (A master use license is a synchronization license for the master recording.) A placement can be quite lucrative, but it’s important to understand how your music is being used. Here’s a basic overview of the main points in a synchronization license:

  1. Licensor

The licensor is the person who owns the music and giving permission for it to be used in the audiovisual project. The music publisher owns the composition and the record label owns the master recording. Independent musicians might own both.

The licensor’s information will also include the licensor’s ownership share of the composition or master that is the subject of the license. Also, the writers of the composition and their performance rights organization information will be listed.

  1. Licensee

This is the person receiving the permission to use the music in the audiovisual project. This is usually a production company, studio, or network.

  1. Timing

Timing is how much of the song will be used in the audiovisual project; for example, it could be thirty seconds or an entire song.

  1. Type of Use

This is basically how the music will be used. There are many different terms thrown around to designate the type of use, but without using a bunch of industry-specific terms, examples would be playing in the background, with or without people talking over it; a live performance; played on a radio; an opening or closing theme; or in the credits.

  1. Territory

The territory covers where in the world can the music be used within the audiovisual project. This might be worldwide, for a specific country, or even a local area.

  1. Term

The term is for how long can the music be used within the audiovisual project. This might be in perpetuity or only for a specific length of time.

  1. Media

This is a big talking point because it includes the types of media in which the music can be used as part of the audiovisual project. This can include TV (and what types of channels), theatrical (movie theatres), film festivals, the Internet, all of these, or only some of these. The rights section also includes language about whether the music can only be used in the specific project itself, or also whether it can be included in promotions for the projects and if so, what types of promotions.

  1. Money

Everyone’s favorite topic, i.e. the fee you are getting paid for the use of your music!  This is going to be a negotiated fee based on the type of use, popularity of the song, and other factors.

  1. Direct Performance

Direct performance rights are not present in every sync license, but are being seen more frequently. Basically, some licensees want to pay a buy-out fee of your performance royalties in an effort to move away from paying blanket license fees to the performance rights organizations (who would normally collect your performance royalties and pay those to you). One problem with this is that the licensees still have their blanket licenses with the performance rights organizations, so a buyout of performance royalties would leave you out of any income generated from performances over the amount of the buyout.

  1. Some legal language

This is for your attorney to handle!

 

One should always have an experienced attorney look over any license you receive. Contact me if you have a license you need reviewed.

 

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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