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The New Book from Erin M. Jacobson, Esq. is now available!

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Categories: Copyright, Music Contracts, Music Industry, Music Publishing, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Don’t Get Screwed! How to Protect Yourself as an Independent Musician by Erin M. Jacobson, Esq. is now available in both print and ebook versions.

About the Book:

There’s a lot of confusing information in the music business: copyright, different types of royalties, how to get paid, and how to not sign over rights you shouldn’t. Now there is a single resource that explains these concepts in an easy-to-understand format.

Written by Erin M. Jacobson, one of the music industry’s top lawyers, this book is a plain English, straight to the point, primer on the topics you need to understand to make important decisions about your music career.  

This book explains:
– what copyright really means and why you should register yours,
– the different types of royalties and how they actually apply in the real world so you can understand how and when your music earns money,
– how to collect the money your music earns,
– the contracts most needed by independent musicians and why they are important,
– traps to avoid, and
– real examples of mistakes musicians have made and how you can avoid making them too.

This book provides information from an industry insider that is not available in other publications, and is an empowering resource for new, upcoming, and seasoned musicians.

Click here to purchase a PRINT copy.

Click here to purchase the EBOOK.

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2019 LEGAL ROUND-UP – AND WHAT IT MEANS FOR THE MUSIC INDUSTRY IN 2020

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Categories: Articles, Business, Legal Disputes, Legal Issues, Music Industry, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

By:  Erin M. Jacobson, Esq.   This article was originally published on Synchtank’s Synchblog.   It’s been an interesting year in the music legal field. Some outcomes were positive steps forward for the music industry, and some, well, not so much. Here’s a recap of some of the most talked-about legal happenings of 2019, and what they could mean for 2020.

Katy Perry’s “Dark Horse” Infringement Lawsuit

Background: Christian rapper Marcus Gray, professionally known as “Flame”, sued Katy Perry and her collaborators stating that Perry’s song “Dark Horse” infringed on his song, “Joyful Noise”. Perry and her team testified that they had never heard “Joyful Noise” and therefore could not have copied a song of which they had no knowledge. The actual musical evidence was lacking in similarity as well.  However, the jury decided against Perry and her team because (1) the songs have a similar sound repeated in them, (2) “Joyful Noise” had been nominated for a Grammy in the Christian music category, and (3) Katy Perry had once been a Christian artist before she hit pop superstardom. Perry has appealed the lawsuit and the appeal is currently pending. What it Means: Copyright infringement lawsuits require two elements to be proved, substantial similarity and access. The two works must show enough similarity that one could attest one creator had copied the other, and the infringing party must have had access to, i.e. heard, the allegedly infringed song. Access is often proven by performance of the infringed song on the radio, a producer who worked with the both artists or their team sharing music with the infringing artist, or other similar manner of delivery. Perry and her team were found guilty of infringement despite a lack of compelling evidence for both elements. Copyright law also allows for independent creation, meaning that two people can write songs that sound similar, despite never having heard each other’s songs. However, it seems this tenant has been forgotten in this and many other recent infringement cases. What to Look for in 2020: While there are definitely legitimate cases of infringement, verdicts like this will encourage the filing of more frivolous cases. Many artists are already afraid that anything they create will be taken advantage of by opportunistic people looking to boost their own fame by capitalizing on the publicity of someone else’s creation. Hopefully, we will see this verdict overturned on appeal.  

Led Zeppelin “Stairway to Heaven” Copyright Lawsuit

Background: The trustee for Randy California, the late lead singer of the band Spirit, sued Robert Plant and Jimmy Page, saying “Stairway to Heaven” infringed on Spirit’s composition, “Taurus”. Despite the fact both of these songs are decades old, the case went to trial.  In this case, there was access (Spirit had toured with Led Zeppelin in the late 1960s) and some similarity, but no infringement was found. The lawyer for California’s estate appealed, and the new decision is currently pending. What It Means: Those in the music industry agree this verdict was correct. While California could have sued during his lifetime, he chose not to do so, and the evidence here was not compelling enough to prove the infringement claim. What to Look for in 2020: Hopefully, the original decision will be upheld. The industry needs some precedent for correct rulings in copyright infringement cases.  

Spotify’s Appeal of the Mechanical Royalty Rate Increase

Background: Last year, the Copyright Royalty Board (“CRB”) judges decided that music publishers and songwriters will get an increase on their mechanical royalty rates. The timing of this proceeding happened to coincide with the efforts of the music industry to pass the Music Modernization Act (the “MMA”). The digital service providers (“DSPs”), including Spotify, Pandora, Google, Apple, etc. rallied in cooperation with the music industry to pass the MMA. After the MMA was passed, the DSPs (except Apple) appealed the CRB’s decision to increase mechanical royalties.  The appeal is pending. What It Means: The CRB decision provides for a 44% increase in mechanical royalties to songwriters and music publishers, with incremental raises from the current rates until the 44% is reached in 2022. The DSPs supported the passage of the MMA to gain immunity for being sued for copyright infringement for failure to license and pay for all of the music streamed on their services. Once achieving that immunity, they appealed the CRB decision to try to avoid paying fair rates to songwriters. What to Look for in 2020: CRB decisions are historically difficult to overturn, so hopefully the music industry will receive the new rates it was promised. Despite the goliath size and bank accounts of the DSPs, they need to realize they cannot push the music industry around and must pay fairly for the content on which many of the them have built their businesses.  

Passage of the Music Modernization Act

Background: The Music Modernization Act passed in October of 2018, which promised more streamlined licensing procedures for music on streaming services, a new, centralized registration database, and hopefully a better system for creators and rights owners to be paid streaming royalties. 2019 has been all about actually turning these promises into reality. The Music Licensing Collective board was elected to oversee the operations of this new structure, they negotiated the funding for the database with the DSPs, and choose a vendor to build the infrastructure and supply the data (recently revealed to be The Harry Fox Agency). What It Means: There will be a lot of changes in data practice, and a lot of work for creators and rights’ owners to learn a new system and register their works with the new database. What to Look for in 2020: The database is slated to roll out in beta-mode, with it planned to be fully operational by 2021.  2020 will involve a lot of data uploads.  

Taylor Swift’s Master Recordings Dispute

Background: Taylor Swift hit it big while signed to Big Machine Records, and then moved on to Universal Music Group.  Big Machine decided to sell its catalogue of masters to Scooter Braun, backed by some investment funds. Swift and Braun have a longstanding personal beef, and when the sale occurred, Swift took to social media to express her horror at her nemesis owning her masters. Swift stated she was not given the opportunity to buy her masters back. The parties engaged in a public back-and-forth. Taylor announced she will re-record all of her old masters in 2020 once her re-recording restriction from her Big Machine contract has expired. Later, Swift said Braun was blocking her from performing her older songs on the American Music Awards and using the older music in an upcoming Netflix documentary. Another public battle ensued, with Swift ultimately being able to perform as planned.  Now stories have emerged that Swift is denying all licensing requests for her music until she is able to re-record her masters in 2020 and then will resume licensing with masters she owns. What It Means: Regarding the American Music Awards performance, this is the first time that a record label has publicly argued that a recorded television performance violates a contractual re-recording restriction, when normally that restriction is limited to recording new audio masters. When Swift does re-record her masters, it could negatively impact Braun’s recoupment of his investment. This dispute has opened the eyes of many artists as to what they may give up when signing a record deal, and there is a growing trend toward artists seeking to retain master ownership. What to Look for in 2020: Swift will most likely continue with her plan to re-record her masters. More public mudslinging may ensue. Artists overall will increasingly seek opportunities that allow them to retain master ownership.   Overall, 2020 will see a lot of changes in the music industry. Hopefully, the results will be just as exciting as the anticipation for their arrival.    

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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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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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The Truth About Legacy Catalogues and How to Avoid the Myths That Harm Them (via Billboard)

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Categories: Articles, Business, Copyright, Legacy, Music Catalogues, Music Industry, Music Publishing, Tags: , , , , , , , , , , , , , , , , , , , , , , , ,

The Truth About Legacy Catalogues and How to Avoid the Myths That Harm Them

By:  Erin M. Jacobson, Esq.

This post was originally published on Billboard.com.

Now is the time when many legacy songwriters and their heirs have recaptured or are in the process of recapturing rights to their catalogues. However, the music business is not the same as it was 56 or 35 years ago when these songs were written. Many legacy songwriters and their heirs are misguided on how to proceed with these newly reacquired rights because the original advice they received does not reflect the nature of today’s music marketplace.

In this article, I’ve compiled seven myths that frequently circulate around and potentially harm legacy songwriters and their heirs, and have offered a new perspective based on my experience with making deals in this area and managing legacy catalogues.

Myth 1: All songs that were once famous still earn a lot of money.

Wrong! While some evergreen compositions are fortunate to continue earning substantial incomes, this is more the exception than the rule. Aside from a catalogue like that of The Beatles, there are usually only between one and five songs in a catalogue that still earn money, and in many cases those songs earn only a fraction of the income earned in their heyday. I can quote many examples of songs that hit the top 20 on the Billboard charts, some of which even No. 1, when released, but now earn less than $5,000 per year and are largely forgotten by anyone not around at the time of the song’s release.

Myth 2: Major publishers are the only companies with the power to exploit a catalogue.

This was true in the past, but it no longer the case. Unfortunately, many legacy songwriters and their heirs remain stuck on 30-year old advice from the family’s now-retired music lawyer. In today’s marketplace, major publishers have catalogues so large that they often cannot give personal attention to each individual composition within those catalogues. Because they also have major hits in demand, they tend to wait for licensing and other opportunities to come to them. The problem for older catalogues is twofold: (1) only a small number of these songs are still in the forefront of the public’s mind, and therefore the majority of songs from older catalogues are not requested, and (2) many companies are not willing to invest resources in pitching low-earning compositions. Therefore, these musical gems are neglected and remain lost in a company’s catalogue earning far less than their potential.

On the other hand, independent publishers with smaller catalogs are able to give each composition more personal attention and seek out the right opportunities for it. While an independent company might not be able to give as large of an advance, sale price, or signing bonus as a major, an indie will actively work harder to make its compositions earn more money over the long term because its livelihood depends on it.

Myth 3: A company’s market share will increase the success of a catalogue.

Market share reports look at the percentage of the compositions a company owns in the marketplace, as well as percentage of the top charting hits, and percentage of revenue from that company in relation to total income earned from all compositions in the marketplace. However, market share can be misleading because, top income and charting hits can come from a small percentage of all songs in the marketplace as well as a small percentage of a company’s catalogue. A company’s market share does not guarantee income production for a legacy catalogue because, as explained while debunking Myths 1 and 2, many of these songs are lost in a large catalogue and those forgotten songs will not be actively exploited. Therefore, it is often the case that only a catalogue that already earns substantial income without effort will thrive at a company focused on market share. Further, any bulk funds allocated to major publishers based on market share that the company splits with its songwriters will be allocated to the top earning catalogues, again neglecting under-performing legacy compositions.

Myth 4: A larger company is better at collecting income.

Again, this is not necessarily the case because a larger amount of data to process means more chance for error. I’ve seen countless catalogues at major companies not earning what they should because of mistakes in information that have never been fixed. I’ve seen major publishers not correct information for low-earning compositions because it’s not important to them. I’ve seen companies pay writers and their heirs the wrong royalty rates because no one bothered to look at the original contract rates and the writer’s heirs had to settle for much less than what they should have earned in order to avoid expensive litigation. I’ve also seen companies not take the steps to collect the income — even for high earning songs — because for whatever reason their staff never got around to it. All of these actions hurt the earnings of the compositions and hurt the writers and heirs that benefit from — and sometimes rely on — that income.

Myth 5: It’s too hard to move to an independent publisher from a major.

As explained above, an independent publisher will typically work harder than a large company to make its catalogues earn money. Independent publishers want notable cuts, work the sync market and typically are more diligent about properly collecting income — again, because each dollar matters. The challenge really lies with finding the right independent partner for a catalogue — someone who knows the music, understands the legacy, and has the right connections to exploit the catalogue properly. The right partners are out there, and in this case, it is actually more important to have the right advisors to assist the catalogue owners with making the best decisions for the catalogue.

Myth 6: Writers and heirs can’t self-publish.

Writers and heirs can self-publish if they have the right team in place. Publishing a catalogue with no experience doing so and no connections in the business is not a recipe for success. However, writers and their heirs can maintain ownership of the rights and have the right advisors in place to manage and promote the catalogue. I regularly manage and/or administer catalogues for my clients who have chosen to retain ownership and self-publish.

Myth 7: Heirs will know what to do with a catalogue.

Heirs will not automatically know what to do with the catalogue they have inherited just because their parent/grandparent/aunt/uncle/child was a songwriter. In many cases, these heirs were not exposed to the business side of their relatives’ career and in most cases have no experience with music publishing or managing compositions. Typically, heirs that inherit a catalogue are overwhelmed by the vast amounts of information and don’t know where to start in getting a handle on the catalogue. The heirs that are more adept at navigating the music industry have typically learned over many years and from astute advisors.

Legacy songwriters still living can make arrangements for their catalogues now and clean up the catalogue’s governing information and paperwork so that heirs will inherit an organized packet of information. The right advisors in place can guide legacy songwriters in managing the issues surrounding the catalogue and setting it up to benefit the heirs for the remainder of the copyright term. Many of my living legacy writers will designate me to continue managing the catalogue after their death and I regularly work with heirs to assist them with navigating how to manage the issues regarding their catalogue and maintain and grow what they’ve inherited.

Erin M. Jacobson represents and protects independent, established and legacy songwriters and artists (including their heirs and estates), legacy catalogues, independent music publishers, Grammy and Emmy Award winners, and other music professionals at her law practice based in Beverly Hills, California.

Disclaimer: This article does not constitute legal advice.

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Erin M. Jacobson published in Billboard

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Categories: Articles, Honors and Awards, Legacy, Music Industry, Terminations, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

I am proud to announce that my most recent article, Attention Legacy Artists: 6 Things You Need to Know to Recapture Your Copyrights, has been published by Billboard!

 

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Attention Legacy Artists: 6 Things You Need to Know to Recapture Your Copyrights

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

By:  Erin M. Jacobson, Esq.

This article was first published on Billboard.com.

There has been a lot of buzz recently about songwriters and artists (or their heirs) recapturing copyright ownership of their songs – and youcanbelieve the hype.  Copyright law provides a chance for authors (or heirs of authors) to recapture ownership of the copyrights to works granted away many years ago, and the window allowed by the law to recapture those rights is now.[1] Recapturing rights can allow for an author or author’s heirs to negotiate better deals with higher royalty splits in their favor, sell catalogues for large sums of money, or finally regain control of how a catalogue is exploited and increase profits with the right team in place.

However, recapturing rights is a complicated business filled with many requirements and nuances.  Here are six things authors need to know about recapturing rights.

  1. Dates Matter

An author (or author’s heirs) can terminate grants of copyrights made before January 1, 1978 during a window beginning 56 years and ending 61 years from the original copyright date.[2]  However, notice of termination must be served on the current owner anytime between ten and two years before the date the author intends the rights to revert.[3]  For grants made after January 1, 1978, the calculation of when rights can be recaptured is based on the date of the grant, not the original copyright date.   These post-1978 grants may be terminated beginning at 35 or 40 years after the grant date (depending on the language in the grant)[4]with a five-year termination window. Again, notice of termination must be served on the current owner anytime between ten and two years before the date the author intends the rights to revert.[5]

Being proactive is one of the most important factors when it comes to recapturing rights.  As mentioned above, serving notice on the current owners of the copyrights is required to recapture rights.  Because of the additional requirement that this notice must be sent between ten and two years beforethe date the rights will revert, anyone intending to recapture rights must look at leasttwo years ahead.  If someone intending to recapture rights misses the notice window – rights cannotbe recaptured and the opportunity is forever lost. 

  1. Works for Hire Need Not Apply

If an author signed a work for hire agreement for the works in question, don’t bother.  Copyright Law specifically states that works for hire are not eligible for termination.[6]

  1. U.S. Rights Only

The termination provisions that are the subject of this article are part of United
States Copyright Law and therefore only apply to U.S. rights.  That means one can recapture U.S. rights, but not foreign rights.  Also, as of this writing, the chance to recapture is only applicable to U.S. contracts.[7]

  1. Masters are an Uphill Battle

Most discussions around recapture of copyrights refer to composition copyrights because compositions are generally more straightforward to recapture than master recordings.  Most record company contracts say that masters are works made for hire for the record company, and as explained above, works made for hire are not eligible to be terminated.  However, copyright law dictates that works made for hire must meet certain requirements to qualify as a work made for hire:  (a) it must be made by an employee within the scope of their employment, or (b) it must be specially commissioned by the owner of the work for hire, it must be agreed in writing, and the type of work must fall within one of nine categories designated by the law.[8]  “Master recordings” is not one of those nine categories.

While there have been a few instances where labels have quietly relinquished rights to masters and sworn all parties to secrecy, most record labels refuse to release rights to masters and instead negotiate with the artist to increase their royalty rates.  A higher royalty rate does not help artists whose masters are not being exploited and not earning money, but it is all in an effort for the labels to avoid setting a precedent.   Master recordings are record labels’ main assets and businesses cannot give away their assets without also giving away power and profit.

Unfortunately, this is an issue that will only be decided by litigation and/or copyright reform, and neither of those has happened yet.

  1. Relationships Matter

For pre-1978 grants, one author’s share may be terminated, rather than requiring co-writers to terminate together.  However, if an author’s heirs are the ones effecting termination, then a majority of those heirs must terminate together.

Post-1978 grants signed by more than one author require a majority of those authors to terminate the grant together, and if any one of more of those authors is deceased, then a majority of the heirs of each deceased author must sign instead.   However, there are exceptions to this rule if separate grants were signed.

Requiring multiple parties to sign the termination notices can be problematic if co-writers, or heirs fighting about estate issues, no longer speak.  Even if the parties may have lost touch over the years, it benefits everyone involved to coordinate and cooperate to recapture rights.

  1. Don’t Try This at Home, Kids

If not already apparent by reading this article, assessing eligibility for filing terminations and carrying out the proper procedures to recapture rights is extremely complex.  Furthermore, there are numerous nuances and requirements not discussed here that could also affect whether an author or an author’s heirs may recapture rights. Anyone seeking to recapture copyrights needs an attorney specifically focused on the music industry that also has extensive experience with assessing these issues and recapturing rights.  Not all entertainment attorneys understand music and not all music attorneys are experienced with terminations.

I regularly recapture rights for my clients, as well as advise them on protecting and revitalizing their catalogues, as I am in a unique position where I am deeply familiar with both older music and how to navigate those catalogues within today’s marketplace.  Being in this space also means I frequently see legacy artists and their heirs who have been misguided, who have lost their chance to recapture their rights, 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.

There is only one chanceto recapture copyrights, one chanceto regain control of one’s legacy, and one chance to get it right.  Choose wisely.

_____________________________________________________________________

[1]Depending on the circumstances of each individual work, as some works are not yet eligible, no longer eligible, or not eligible at all to recapture.

[2]U.S.C. 17 §304(c)(3) (1992).

[3]U.S.C. 17 §304(c)(4)(A) (1998).

[4]Post-1978 grants are terminable at 35 years after the date of the grant, however, if the grant’s language 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.

U.S.C. 17 §203(a)(3) (1998).

[5]U.S.C. 17 §203(a)(4)(A).

[6]U.S.C. 17 §304(c) (1992); U.S.C. 17 §203 (1998).

[7]There have been a couple of high profile disputes on this matter involving U.K. contracts (namely Duran Duran in one instance and Sir Paul McCartney in another), but Duran Duran lost in a U.K. lower court and subsequently settled, and McCartney settled without litigation.  Some other countries do have their own provisions for recapture of rights, but they vary by country and differ from U.S. law.

[8]U.S.C. 17 §101 (1992).

 

Disclaimer:  This article does not constitute legal advice.

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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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