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The Secret to Licensing Your Music

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By: Erin M. Jacobson, Esq.

This article was previously published on Synchtank.com.

Licensing music is one of the more lucrative areas of the music business and I often get asked how one can encourage productions to license one’s music. 

There are many factors that go into choosing a piece of music to license.  For example, some creative factors include the song itself, the genre, the artist who recorded the particular song, the time period from which the music is from, the nature of the scene or commercial that is using the music, the product, the mood that the producers want to evoke, and other factors.  From a legal perspective, factors that can influence whether a piece of music is licensed include the territory in which the music is available to be licensed, the length of time the music will be used, in which media the music will be used, whether promotional uses are allowed and what type, and more.

However, there is one factor that when all other things remain equal could win the license for one piece of music over another.

Without further ado, the secret to getting music licensed is…

Make the music easy to license!

Note that just because one’s music is easy to license does not guarantee someone will license it.  However, what it does mean is that if a production is interested in licensing a particular piece of music that proves difficult and time-consuming to license, the production will very often abandon efforts to try to license the difficult piece of music and re-direct its efforts to another piece of music that is easier to license.  This means that the owner of the piece of music that is difficult to license will lose that license and the income generated from it, and another rights’ owner now has an opportunity to get that license, and the income from it.

Here are some examples I’ve encountered where the music was not easy to license:

In one example, a new artist wanted a synchronization license for his cover version of a particular song.  There were two writers of the composition, and two publishers from whom to seek a license.  One publisher (“Publisher 1”), a major publisher, was responsive and regularly communicated in regard to approval status.  The other publisher (“Publisher 2”), a lesser-known indie publisher who actually has a catalogue of some substantial songs, was completely non-responsive.  This publisher ignored multiple emails and voicemails with the license request, including ignoring communication from Publisher 1, its co-publisher. 

I am a big fan of publishers in general, and especially those that do their job well.  However, in this case, Publisher 2 was actually losing a license for its writer by completely ignoring the license requests.  It stands to reason that if Publisher 2 ignored the request in this example, it is very likely that Publisher 2 has ignored other requests as well.  This means that Publisher 2 is actively losing money for its writer, and also creating a reputation whereby potential licensees will purposely avoid using songs administered by Publisher 2 because of Publisher 2’s difficulty.  This, in turn, will lose even more future licenses and money for both Publisher 2 and its writer. 

In another example, a successful podcast wanted to license a particular song for its intro and outro music.  The publisher responded quickly with a reasonable quote.  The master owner was in Europe and I contacted the office in the appropriate country.  That office advised me to contact and obtain the license through a particular society.  This procedure didn’t sound correct to me, but I contacted the society per the label’s request.  After several attempts at obtaining a response from this particular society, the society informed me that the society only licenses for its particular country, and only for a podcaster’s own website, not for the major podcast distribution channels like iTunes.  As this confirmed my appraisal of the situation, I contacted the label again with this information.  As of the date of this writing, the label has not responded.

A third example involves clearing music for a video game on a past project.  One particular composition was identified as being owned by a particular company.  After contacting the company several times and the company initially confirming it could issue the license, the company then said it could not issue a worldwide license, as it turns out it was only the sub-publisher for a particular territory.  Our team then asked this company to direct us to the company that could issue the worldwide license.  The sub-publisher’s response was “we don’t know.”  A sub-publisher is responsible for accounting to the rights’ owner that is the main publisher, who in this case would be the company able to issue the worldwide license.  The sub-publisher seemingly did not know who they were representing or to which company they were accounting!  Thankfully, there was a happy ending as we independently found the worldwide licensor and licensed the song.

In order to avoid making the same mistakes as the rights’ owners described above, here are a few tips to make music easy (or easier) to license:

  1. Make sure the registration data is correct in all places where someone would seek information for the licensing contact.
  2. Have a one-stop license, if possible.   A one-stop availability means a person or company owns or has the right to license both the composition and master.  This is not always possible, especially with major releases, so in that case, see #3.
  3. Know who the proper licensing parties are (including co-owners) and be able to assist in the process, if needed.
  4. Respond to license requests!

While the four steps outlined above cannot ensure a particular piece of music will be chosen from a creative standpoint, they will assist in the licensing process when the creative interest is already present.  Licensing is a very active area and it is possible to stay in and win at the licensing game if you play it correctly.

Note: This article does not constitute legal advice.

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WILL CALIFORNIA’S MUSIC INDUSTRY SURVIVE AB5?

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By: Erin M. Jacobson, Esq.

This article was previously published on Synchtank.com.

The music industry is comprised of very specific customs and practices as to how business is done. The music industry functions in its own world, and its customs and practices are foreign to and widely misunderstood by most people not working in the music business. Therefore, when those outside the music industry place restrictions on how music’s business can be carried out, the results can be disastrous.

Case in point, the new AB5 law in California. AB5 stands for Assembly Bill 5. It was introduced at the end of 2019 and went into effect on January 1, 2020. While this is a California law, it can affect the music business on a global scale.

Summary of the Law

AB5 was enacted with the aim of equalizing benefits and fair treatment for workers, especially those with part-time gigs, like Uber drivers. The intention of the bill was to make sure these types of workers also received the benefits of full-time employees, such as health care, and also to enforce businesses to pay employment taxes to the state instead of circumventing those taxes by classifying all of its workers as independent contractors.

AB5 takes the decision of a recent California Supreme Court case [1] and enacts it into law. AB5 dictates a new test for determining who is an employee versus who is an independent contractor. The determination of whether a worker is an independent contractor is now subject to what is called the “ABC Test”. In order for a person to be considered an independent contractor rather than an employee, the hiring entity must show all of the following:

  1. The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact. [2]
  2. The person performs work that is outside the usual course of the hiring entity’s business. [3]
  3. The person is customarily engaged in an independently established trade, occupation, or business of the same nature that is involved in the work performed. [4]

Here’s the translation in plain English:

Part A basically means that the worker is hired for a job and determines how he or she will do the work. This has to be shown in the written agreement between the hiring entity and the worker, and also has to be true in practice. For example, when one hires a bookkeeper, the bookkeeper will determine when and how he or she works, and how the work gets done. This will also be reflected in the agreement between the hiring entity and the bookkeeper. The hiring person is not going to tell the bookkeeper how to perform the work of a bookkeeper, nor is one business owner going to tell another business owner how and when to conduct business.

Part B means that the worker is performing work that is not the same business as the hiring entity. Again, using the bookkeeper example, if a musician hires a bookkeeper, the bookkeeper does very different work than the musician.

Part C means that the worker has his or her own separate business doing the type of work the hiring entity hired the worker to perform. Staying with the bookkeeper example, the bookkeeper would have his or her own bookkeeping business and perform bookkeeping work for other clients.

By default, workers are now considered employees unless the hiring entity can show the worker is an independent contractor. There are many exceptions to this rule, such as doctors, lawyers, accountants, graphic designers, repossession people, and more. However, there was no exception granted for those who work in the music business.

How Does This Affect the Music Industry?

Because there is no exception for the music industry, music professionals are subject to this law.

This means that a musician is now an employer when he/she hires:

  • another musician to play in that musician’s band (even if it’s just for one show instead of an on-going arrangement);
  • someone to perform on a record (even as a one-off, work for hire session);
  • a producer (or beatmaker) for their record
  • and more!

If that musician is an employer, then he or she would be required to take out withholding tax from the workers’ pay, pay payroll taxes to the state, potentially provide health care benefits, file all appropriate tax forms, etc. This could be crippling to independent musicians, both financially and administratively.

What About Companies?

Companies are not exempt from these requirements either. By contract and in practice, artists have always been considered independent contractors in relation to record labels, and this practice continues today. Songwriters have been considered independent contractors to music publishers, as composers have been to music libraries. This could all potentially change if AB5 is enforced based on a literal interpretation of the ABC Test. It could force companies to completely change the way they do business, which may be at the detriment of musicians. It is possible that companies like record labels will make sure their contracts are issued only from their offices outside of California.

It also may force many in the music industry to move their business outside of California where the “gig” way of doing business continues. This would be a blow to the California economy both from losing the revenue from the music industry, as well as the taxes from all the musicians and companies that would move out of California to continue their current ways of doing business.  AB5 may also affect independent film companies and non-union film projects. As the California economy relies heavily on the entertainment industry, this surely would greatly reduce the benefits legislators hoped AB5 would bring to California by increased income from employment taxes.

What Do We Do Next?

No one knows. The law was drafted so broadly and is so new, that it is completely untested. No one really knows how to proceed and how this law will be applied in practice.

Some in the industry and online have tried to think of different ideas to continue doing business as usual without violating the law, but none seem to have a viable solution.There have also been lawsuits filed against AB5 and actions to move toward an appeal. One website (which is really part of one California Assembly candidate’s website for his election campaign) [5] allows the public to post their stories of how AB5 has or will affect their careers.

What most people are doing now is trying to proceed with caution and stay up to date with any changes. It’s a very uncertain time, but one can hope for a favorable resolution.

[1] Dynamex Operations West, Inc. v. The Superior Court of Los Angeles County, 4 Cal.5th 903 (2018).

[2] Assemb. B. 5, 2019 Leg.,  Chapter 296, Statutes of 2019 (Ca. 2019).

[3] Id.

[4] Id.

[5] This campaign website is provided for informational purposes only. It is not an endorsement by Erin M. Jacobson, Esq. of any candidate or cause.

Note: This article does not constitute legal advice.

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Erin M. Jacobson, Esq. Explains Taylor Swift’s Music Drama

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Categories: Articles, Legal Disputes, Legal Issues, Music Contracts, Music Industry, Music Publishing, Record Labels, Tags: , , , , , , , , , , , , , , , , , , , , , ,

Erin M. Jacobson is interviewed in US Weekly magazine to explain how Big Machine is blocking Taylor Swift from performing her old songs. Read the article here:  https://www.usmagazine.com/celebrity-news/news/taylor-swifts-music-drama-explained-can-big-machine-block-her/ 

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Erin M. Jacobson, Esq. on Top of Mind, Sirius XM channel 143

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Categories: Interview, Music Catalogues, Music Industry, Music Licensing, Music Publishing, Record Labels, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

 

Erin was interviewed on the SiriusXM show, Top of Mind with Julie Rose regarding master ownership, re-recording, how artists are affected by this, and Taylor Swift.

You can stream here:

Or listen/download on iTunes Podcasts here.

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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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Erin M. Jacobson, Esq. named a 2019 Super Lawyers Rising Star

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Categories: Honors and Awards, Tags: , , , , , , , , , , , , , , , , , , ,

Erin M. Jacobson, Esq. has once again been named a Super Lawyers Rising Star!  Thank you to Super Lawyers for this great honor!

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Recent Press

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Erin was recently interviewed in VoyageLA magazine about how she came to be #TheMusicIndustryLawyer and what she likes to do outside of helping my clients navigate the complex music industry.

Erin was also recently quoted in an article for The Fader:  “Here’s What You Need to Know About Sharing Lyrics Online”

 

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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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Erin M. Jacobson, Esq. to contribute to Synchtank’s Synchblog!

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Categories: Articles, Tags: , , , , , , , , , , , , ,

I am very happy to announce that I will regularly be contributing articles to Synchtank’s Synchblog!

To get started, here is my first article for Synchtank — “Copyright Terminations:  What Rights’ Owners Need to Know“.

Synchtank is a software solution that helps music owners organize, maintain, and pitch their catalogues.  For more information on the services Synchtank provides, click here.  To check out their blog, click here.

 

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I’m hiring!

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Categories: Business, Law, Music, Music Contracts, Music Industry, Music Publishing, Tags: , , , , , , , , , , , , , ,

I am hiring!  If you are a positive, smart, and capable potential employee who is passionate about music and protecting creators and rights’ owners, then please click on the links below to view available positions and apply:

Administrative Assistant

Paralegal

Associate Attorney

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