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Tag Archives: music publishing

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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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Spotify May Have To Pay Songwriters $345 Million

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

By:  Erin M. Jacobson, Esq.

This article was previously published on Forbes.com.

When you stream music on Spotify, are you aware that as you are enjoying your favorite song, Spotify might not be paying the person who wrote that song?

Spotify has been sued for upwards of $345 million by Bob Gaudio and Bluewater Music Services Corporation for failure to pay mechanical licenses when their compositions are streamed on Spotify. Gaudio, a former member of Frankie Valli and The Four Seasons, wrote and publishes some of the group’s biggest hits including “Sherry,” “Big Girls Don’t Cry,” and “Walk Like a Man,” as well as Valli’s solo hit “Can’t Take My Eyes Off of You.” Bluewater administers the publishing for compositions like Player’s “Baby Come Back,” Miranda Lambert’s “White Liar,” and Guns ‘N Roses’ “Yesterdays.”

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. While Spotify has deals with the major labels, and blanket licenses with ASCAP and BMI, Spotify has not complied with the requirements for mechanical licenses and payments for all compositions streamed on its platform. Obtaining a mechanical license in the United States is compulsory, meaning that a person or company wishing to reproduce a composition must follow the guidelines in Section 115 of the United States Copyright Act to serve a “Notice of Intent” on the copyright owner and pay said owner the compulsory license fee. Spotify has followed this procedure for compositions affiliated with the Harry Fox Agency (the closest body the United States has to a mechanical rights society), but there are many compositions not affiliated with the Harry Fox Agency that Spotify would need to contact and pay directly – and Spotify largely has not done so.

This is not the first time Spotify has come under fire for its inadequate licensing practices. In 2016, Spotify reached a $30 million dollar settlement with the National Music Publisher’s Association (NMPA) for unpaid mechanical royalties, and Spotify just settled another class action suit for $43.4 million dollars. While maximum statutory damages rates are $150,000 per infringed composition, Bluewater claims that Spotify will only have to pay songwriters $4 per infringed composition after litigation fees are paid. Per the previous settlements, Spotify must also implement a better system to properly track and pay mechanical royalties, and Bluewater asserts this has not yet happened.

The attorney for both Gaudio and Bluewater is Richard S. Busch, most recently in the news for his representation of Marvin Gaye’s estate in the “Blurred Lines” case. Echoing my previous sentiments, a press release citing Busch’s complaint sums up the issue in a single sentence: “Songwriters and publishers should not have to work this hard to get paid or have their life’s work properly licensed, and companies should not be allowed to build businesses—much less billion-dollar businesses—on the concept of ‘infringe now and ask questions later.’”

*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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You’ve Inherited a Song Catalogue, Now What? (What Heirs Need to Know)

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

By: Erin M. Jacobson, Esq.


I see many spouses or children that inherit a song catalogue from a songwriter relative, and are not familiar with the music business or how to administer intellectual property rights of music.

Here is the first thing to do: Hire a music attorney experienced with managing catalogues and music publishing.

When I work with heirs on how to manage a catalogue they’ve inherited:

  • I assess the catalogue. I work with my client to know exactly what they have in the catalogue. I find out whether the heir owns the copyrights to the songs – either because the original writer never granted them away or recaptured them at a certain point before inheritance. If the heir doesn’t own the songs, I determine who does have ownership and the terms of the deals with those owners.
  • I review the old contracts and assess whether the current publisher or administrator is doing the best job for the catalogue or if the catalogue might be better at a new home.
  • I assist with inventory of all the titles, copyright years, and registration numbers (if possible); and determine all sources from which the heir receives statements and royalties. Keeping everything organized is essential to either managing or selling the catalogue.
  • I assess whether certain provisions of the copyright law apply so that an heir who doesn’t own the catalogue may be able to reclaim ownership of those copyrights, after which I can negotiate a new deal with the best publisher to manage the catalogue.
  • I coordinate a valuation appraisal of the catalogue for potential sale.

Selling the catalogue is a personal decision, it depends on whether one would rather receive royalty checks or instead receive a lump sum upfront in exchange for the catalogue. This depends the circumstances of each individual situation, both from a financial standpoint and whether the heir wants to have a continuing relationship to the catalogue.

Inherited catalogues are special for family legacy reasons, but also because they come with their own set of decisions. Many heirs have not had previous experience with the music publishing business, and either miss important milestones that would put the catalogue in a better position, or they rely on existing deals with companies that are no longer looking out for the best interests of the catalogue. Banks and other trustees often complicate matters, as well as representatives not experienced in music publishing and copyright management. Many of these personnel only look at the numbers. I personally love older music and understand the sentimental value of a catalogue beyond the income it brings in each year, as well as whether and how it can be profitable in today’s market.

Again, the first step in dealing with a catalogue you have inherited is hiring a music attorney experienced with music catalogues and who can make the right plan for your catalogue.

 

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

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

Read the article here.

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How Influential Are You?: How Music Creators and Companies Can Leverage Branding and Online Influencing

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Categories: Articles, Business, Music Contracts, Music Industry, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

By: Erin M. Jacobson, Esq.

Today’s music industry is no longer about income from sales. Artists, writers, and the companies that represent them need to find innovative ways to generate additional income streams. In addition to sales, many on the music side have discovered the value of getting synchronization (sync) placements in TV and film. However, this discovery has led to the sync market being oversaturated, and in many cases, reduced fees for sync placements.

Another avenue for artists and rights’ owners involves the branding and influencing space.  Sponsorships and endorsements, as well as social media influencing, have become different strategies brands can use to market their products via influence from traditional celebrities or “ordinary” people with a substantial online following. Celebrity endorsements tend to focus on the celebrity status boosting the brand or using the celebrity’s image to make the brand relevant to a target demographic.   However, the celebrity’s career does not have to have anything to do with the type of product(s) they are endorsing. Influencers are more specialized—they will promote products within certain circles and related to their expertise. For example, a fashion blogger and influencer would promote fashion-related products.

Consumers today want transparency in advertising and recommendations to come from personalities they trust. However, much of the advertising they see appears more transparent than it really is. The Federal Trade Commission (FTC) has issued guidelines for social media and other advertising. In endorsement deals I have done for my clients, there are often provisions stipulating that social media posts promoting the brand are accompanied by certain hashtags to clarify that there is an agreement between the brand and the artist to promote that brand. However, as these guidelines are just that, they don’t seem to be heavily enforced and a lot of product promotions are posted without such notification leading the consumer to believe the recommendations are organic and without any connection to or financial backing from the company.

In addition to transparency in advertising, consumers and fans want personal connections to personalities they admire. They want to share in the commonalities, hobbies, and lifestyle as it makes them feel emotionally closer to the personality and feel like they are able to live a similar lifestyle to the personality. Lifestyle brands often stem from a specific image and way of life stemming from a certain individual and material they are creating, but as society moves toward touching the inner need of individuals to express themselves, artists like Lady Gaga are combining the traditional model of selling the lifestyle of the celebrity and using the celebrity’s values to promote the fan’s expression of individuality.

While artists can tap into commonalities in the lifestyles of fans, doing so for rights’ holders like music publishers and record labels is slightly more difficult. Rights’ holders can seek these opportunities for their artists or writers to involve them as the “face” of a campaign, but in the case of a writer, this plan doesn’t work if the writer is not also a performer. However, in these situations, rights’ holders can seek to use the music as the “soundtrack” of a particular brand by using the sound, feel, and what the music represents to showcase a brand or lifestyle that appeals to consumers. This can be a symbiotic relationship where a more established brand can help break or boost a newer musical talent, but also where more established music can help to break or boost an up-and-coming brand. In most cases, sync rights will be involved in these campaigns, but the relationship can be extended for more than just a single placement. Taking it a step further, having the music or artists involved in events, stores, and activities in which the demographic participates and then having product to monetize at these venues can help to bring the campaign full circle. Both artists and companies like labels may be able to leverage online influencers by having them attend and post about the artist’s concerts or other events.

Opportunities on the Internet continue to expand, as social media now incorporates music and short videos and audio clips in addition to photographs. While some of the monetization of the use of the music in these posts can be questionable, short clips of audio and video can be the gateway to monetizing other avenues with more substantial revenue like concert tickets, merchandise, sales, and other participation that leads to larger opportunities.

In summation, today’s means of reaching consumers extends beyond traditional demographic analyses. Today’s marketing and ancillary income relies on finding ways to emotionally connect artists and music with consumers in an authentic way and enabling consumers to feel like they are able to express themselves and their ideal lifestyle through their association with the artists and music they consume.

Click here to contact Erin to review and negotiate one of these agreements on your behalf, or counsel you on your specific situation.

 

 

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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The Most Common Music Publishing Agreements Explained!

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

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

Songwriter Agreement

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

Co-Publishing Agreement

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

Administration Agreement

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

Songwriter Split Agreement

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

Licensing/Placement Agreement

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

 

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

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

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

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

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

Click here to download the video now.

 

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

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Ways The Music Industry Can Change For The Better

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

By:  Erin M. Jacobson, Esq.

This article was originally published on Forbes.com.

2016 saw a lot of lawsuits and lobbying in regards to changes in the music industry. Here are a few major issues that need to be resolved in 2017 and beyond to help sustain the music business.

Higher rates for streaming and YouTube views

The rates creators and rights owners earn from streaming and views are currently fractions of pennies. A songwriter or rights owner needs to see millions of streams/views to make any substantial income from this revenue stream. Streaming services and YouTube are the biggest platforms for consumers to listen to music, but those that make music are not able to make a sustainable living solely off income from those sources. The rates need to be higher so that those who create music for a living are actually able to earn a living.

Music publishers need to be paid more

In a similar vein, music publishers earn less than record labels from YouTube, Spotify, and other streaming and digital services. There is no music – and no recordings to be made of music — without the creation of a musical composition first. When music publishers are paid less than record labels, not only are music publishers earning less, but the songwriters signed to those companies are earning less. If songwriters cannot make a living writing songs, then songwriting will become a hobby instead of a career.

Even though labels are making more than music publishers, the amount that the artists make is still substantially small due to the contractual terms with the labels. Again, the artists bringing songs to life are not making sufficient money based on their performances and interpretations of songs, and they will not be able to sustain a career that is financially inadequate. Creators need to be properly compensated and this should be recognized by anyone who values music in their life.

Support for fractional licensing within the music industry

The music industry has always operated on a fractional licensing basis where each writer or that writer’s representative controls the respective shares of the songs that writer has written. This model was threatened in 2016 by the Department of Justice that mandated performance rights organizations ASCAP and BMI move to a 100% licensing model, thereby potentially making millions of songs unlicenseable. BMI sued the DOJ and won, but the DOJ has appealed the decision and the outcome is pending. An upheaval of the fractional licensing model would wreak havoc on the music industry and cause creators and creators’ representatives, both within the US and abroad, to be compensated even less than they are now, or make their works unlicensable. This is an unacceptable solution and would be a massive blow to not only creators, but to the music business as a whole.

Cooperation between the law and the internet

When the copyright law was last written in 1976, the internet was not used by the public let alone as a way to consume music. Therefore all user-generated content websites, including YouTube, etc. are operating in a way not contemplated by the law when it was first written. The law needs to be updated to address how works can be licensed in a way that cooperates with the digital world while fairly compensating those who create the works being used. There also needs to be a better way to deal with online infringements. Most online infringements are dealt with via DMCA (another area of law needing reform) takedown notices, although YouTube is now allowing content owners to share in revenue from infringing videos through their content management system. Again, the amount of money shared in this scenarios is so small that it is not a sustainable model and goes back to the need for increased rates.

Consumers need to learn to value music

On a daily basis I am confronted with people who want to use music but don’t want to pay for it. They argue that they should be able to use the music for free because the writer or artist will make money on the backend from sales or promotion. However, that backend money is usually never earned as promised and results in the artist or writer allowing the use of his/her music for free. Companies want to pay less and keep the lion’s share of income for themselves, which again creates a problem for creators trying to live off making music.

Internet companies and radio make millions and sometimes billions of dollars per year, and they continue to lobby to be able to use music freely or at least pay less for it, as well as to loosen copyright laws. Many of these platforms have built their business on using music as their main commodity; yet they don’t want to pay for the music that is the central product of their business model. All of the performance rights organizations (most recently GMR) have been fighting with radio and other services to command higher rates for their members and affiliates, but they consistently get pushback from licensees that don’t want to pay. This problem doesn’t stop at the digital realm, as film and television companies also regularly try to offer low fees to use music in their productions.

When one thinks back on their life, usually there are certain songs that evoke certain memories, that were important at a specific life event, or that got one through a hard time. Couples usually designate at least one song as “their song.” Certain scenes in films and television shows would not come to life without the use of a particular song being used in that scene. Certain artists and albums serve as the soundtracks of people’s lives. Imagine if all of those memories were taken away because artists and songwriters could no longer have careers making music because they were not paid enough to make a living. Most people wouldn’t go into a store a take a piece of clothing or a table without paying for it, yet those same people think it is okay to take music for free. Most people would not think to ask if they could pay their doctor fractions of his fee because they can, yet people keep offering lower payments for using music. Music has value. Those that use or consume music need to recognize that value, or watch the quality and prevalence of music disappear from their lives.

*This article does not constitute legal advice.

Erin M. Jacobson is a music attorney whose clients include Grammy and Emmy Award winners, legacy clients and catalogues, songwriters, music publishers, record labels, and independent artists and companies. She is based in Los Angeles where she handles a wide variety of music agreements and negotiations, in addition to owning and overseeing all operations for Indie Artist Resource, the independent musician’s resource for legal and business protection.

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A Day at NAMM with Erin M. Jacobson

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Categories: Music, Music Industry, Speaking, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

 

Last weekend I had the pleasure of attending and speaking at the annual National Association of Music Merchants (NAMM) convention in Anaheim, CA (right by Disneyland!).  NAMM is a fantastic time to see incredible instruments, hang with musicians and industry folk, and conduct business.

Check out my video above where I take you behind the scenes at the convention, and here are some fun photos from the weekend below.

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How Songwriters Just Got Screwed

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

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

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

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

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

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

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

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

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