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Erin M. Jacobson, Esq. on TAXI TV

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

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

Here’s the replay of the show:

 

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

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

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

By:  Erin M. Jacobson, Esq.

This article was originally posted on Forbes.com.

When a song has millions of streams on Spotify and views on YouTube, most people think “Wow, that artist must be making a ton of money!” It’s easy to make that assumption when music superstars are seen on television wearing designer clothing and leaving the hottest nightclubs in town, only to drive away in their Bentley to charter a private plane to their yacht.

What most people don’t realize is that the above is 1) often an image, 2) accessible to only a small number of music creators within the music business, and 3) there are songwriters who wrote those hit songs and the music publishers that represent those songwriters who are earning a mere $10 per 1 million Pandora streams.

Here’s how the structure works. A songwriter writes a composition, which is usually owned or co-owned by a music publisher, a company that handles the management, exploitation and royalty collection for that composition. The music publisher and songwriter split the income from that composition. The main royalties paid for a composition are mechanical royalties for the reproduction of that composition on CDs and via digital means on iTunes and streaming services, and performance royalties paid when a composition is performed in public. Synchronization fees come into play when a composition is used in television or film, but that is a negotiated contract fee separate from a royalty.

While performance royalties have recently been in dispute, this article focuses on mechanical royalties. Mechanical rates are set by the United States government, specifically by a panel of judges called the Copyright Royalty Board (CRB). The CRB determines the royalty rates paid to songwriters and music publishers for every sale of a composition via CD or digital service like iTunes, as well as every time that composition is streamed on services like Spotify, Pandora, etc. The current mechanical rates are 9.1¢ for a sale (split by the music publisher and the songwriter), and streaming mechanicals are fractions of a cent per play.

This month, the CRB has opened hearings to set new mechanical royalty rates, which will be in effect from 2018 through 2022. The CRB will hear testimony from both music creators and music users and will make its decision in December 2017.

While this trial may not be hot news for anyone outside of the music industry, it will determine the amount of money music creators can earn for the next five years.

The music users’ side includes representatives from digital giants like Google, Spotify, Pandora, Amazon and Apple. These companies are lobbying to further decrease the royalties paid to music creators. For example, Apple wants to pay a flat fee of 9.1¢ per every 100 streams on Apple Music. Companies like Google, Amazon and Apple make billions of dollars per year, and Spotify and Pandora are not profitable but have billions invested in them, yet not one of these companies is willing to allocate more money towards the people that create the music on which they have built their businesses. It is also worth noting that not only have these companies built their business models on music but also are using music to promote their services, such as Amazon using free music streaming to sell Prime subscriptions.

The National Music Publisher’s Association (NMPA) and Nashville Songwriter’s Association (NSAI) are representing music publishers and songwriters at the CRB hearings. “[Tech companies are] creating new ways to distribute music [and] they are also fighting in this trial to pay as little to songwriters for the songs that drive their businesses,” wrote David Israelite, president and CEO of NMPA in a letter to songwriters. “[A] rate structure that allows global tech companies to build their empires on the backs of songwriters, without providing those songwriters with fair compensation, is unsustainable.”

The NMPA has issued an open letter to the digital giant companies, urging them to work with songwriters and music publishers instead of fighting against them. The letter is accompanied by a petition, which has already received over 7,800 signatures.

As I have previously written, the music industry will continue to wither without fair compensation to its creators and those that represent them. Creators of music are not all rich superstars. They are regular people with amazing talents to create music that impacts lives around the world. They are people with families and mortgages and bills to pay. They may not work a 9-5 office job, but that doesn’t make them different than the average American, who earns money from a job, and why shouldn’t songwriters and their representatives earn as well?

*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.

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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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Erin to Speak at TAXI Road Rally Convention, November 4-5, 2016

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

Erin will speak at the TAXI Road Rally on November 4-5, 2016.

Here is Erin’s presentation schedule:

Friday, November 4, 2016, 2:45pm-4:15pm

Don’t Get Screwed! How to Protect Yourself as an Independent Musician
with Erin M. Jacobson, Esq.

Saturday, November 5, 2016, 4:30pm-6:00pm

Understanding Music Library Agreements
with Erin M. Jacobson, Esq.

(in this session, you can bring actual library agreements and ask questions about the language in those agreements)

Both sessions with have ample opportunity for Q&A.

The TAXI Road Rally is for TAXI Members and will be held at the Westin LAX.  For more information on the Road Rally, including schedule and entrance information, visit TAXI.com.

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How Songwriters Just Got Screwed

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

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

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

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

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

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

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

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

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

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

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Categories: Articles, Law, Legal Issues, Music, Music Contracts, Music Industry, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Get It In Writing - Erin M. Jacobson, Esq.

Musicians often ask me when they need to “get it in writing” as opposed to just having a verbal agreement or handshake deal. The real answer to that question is that you should always get agreements in writing, but there are three frequently occurring scenarios where it’s essential. Doing so will provide you with much needed protection later on when money or fame create unanticipated problems. Here’s how to handle each situation.

1. Co-writing songs

When co-writing songs with others, it’s imperative to have a songwriter split agreement. This is a short agreement listing the writers of the song and in what percentages they are sharing ownership and royalties. There are longer versions of this agreement that lay out more terms, but a songwriter split agreement is the minimum that you should have in place.

This agreement is important because it offers some proof if someone who’s not a writer tries to claim he or she is owed a credit or portion of ownership or royalties on a song. Here’s a story of an actual situation that happened to a band several years ago.

A new band wrote some songs for their first album while in the studio. As is fairly common, the band had some friends and band members’ girlfriends in the studio with them. One of the songs the band wrote that day in the studio ended up being a huge hit for them that produced a large amount of royalties. The band never completed a songwriter split agreement.

A short time after the song became a hit and the money started rolling in, a girlfriend – now ex-girlfriend – of one of the band members contacted the band and said that the band had promised her 10 percent ownership of the song for contributing a certain line. The band said that they never promised her anything, but she threated to take them to court. The ex-girlfriend had no proof she actually contributed to the song, but the band had no proof that she was lying.

In order to avoid an expensive lawsuit, the band had to give her the 10 percent she wanted. While a written agreement doesn’t prevent someone from making a claim, if the band had completed a songwriter split agreement at the time the song was written, they would have had some sort of proof that the ex-girlfriend was not one of the writers of the song or owed any ownership interest in it. They could have potentially avoided giving up 10 percent ownership and income to someone who didn’t earn it.

2. Working with a producer

Musicians often come to me with problems they’re having with a producer. Often, the producer isn’t turning over the masters because there was a misunderstanding between the parties, or sometimes a producer’s claiming more ownership or income share than he or she should.

The source of these problems is usually that the band didn’t get the terms of the agreement with the producer in writing. As a result, the parties had different understandings of what they each thought the agreement entailed, important terms hadn’t been discussed and left to work out at some later date, or someone changed his or her mind because he or she didn’t have anything in writing to dispute the new terms.

Producer agreements are really important because the creator of the music is bringing in a third party who contributes (some more significantly than others) to the masters and sometimes to the compositions. Producers sometimes have claims to master ownership or require a songwriting credit when they haven’t written part of the song. Producer fees and royalty structures can vary based on genre, stature of the producer, and whether there’s a record deal involved. So, again, having the payment clearly defined is essential.

A band came to me recently after working with several producers on their album, with no written contracts. After spending a lot of money on recording, the band had allowed the main producer on the album to dictate terms of compensation with all the other producers. When the album was finished, the band was left with only 10 percent ownership of all compositions and masters on the album when they were the main songwriters and only performers.

I asked the band why they didn’t seek my counsel or other assistance earlier instead of waiting until this point, and their answer was that they had hoped things would improve on their own. Had the band sought advice on this situation earlier and gotten producer agreements in place with fair terms, this situation could have been avoided.

3. Forming a band

Band agreements are also really important because every band is different. In some bands, everyone writes and all members share equally in royalties, and in other bands, only the main members share credit and royalties while other members are treated more like employees. Bands also have unique issues regarding the band name and who can use or perform under that name if the band breaks up or a member leaves.

The time to create a band agreement is right in the beginning stages of the band when all members are still on good terms with each other. The conversation about the issues covered in a band agreement may seem uncomfortable at first, but ultimately clarifies expectations and protects everyone in the band. If certain band members are unreasonable or cannot agree during this initial conversation, that’s a red flag you’ll be glad you discovered sooner rather than later.

Although being in a band is a creative and fun experience, what many musicians forget is that it is also a business, and needs to be run as such in order to stay organized and find success.

Here’s a story about why having a band agreement is important: I received a call from a musician whose band was in the process of breaking up. The band had been together for several years, and this musician wanted to know if he could continue earning income from the band’s songs and whether he could use the band name in the future.

I learned the band didn’t have an agreement and hadn’t discussed ownership of compositions, masters, artwork, the band name, or how any of these things would be treated if the band broke up. The relationships between the members had turned contentious, and there was no way any of them were in an emotional state to agree on anything.

Because the members weren’t talking, it would have taken a lot of investigation or possibly litigation to figure out how the material should be split and who could use the name going forward. It was very probable this musician would no longer be able to profit from the hard work he had contributed to this band over the last several years.

Had the band created a band agreement in the beginning, they could have discussed these issues and decided how all of their material would be treated in the event of a breakup. While the agreement wouldn’t have prevented a breakup, it would have clearly explained how the material was to be treated and how the members could proceed when the event occurred instead of potentially stripping the members of the proceeds of their contributions.

How and where do you get it in writing?

The best option is to hire an experienced music attorney to draft these agreements with language and terms specific to the situation at hand.

If you cannot hire an attorney due to the cost or other reasons, you can download high-quality contract templates drafted by a music attorney at Indie Artist Resource. Each template covers the most common issues faced in those situations by musicians and comes with instructions to facilitate easy completion of the agreement.

If a formal contract is still not possible, having some evidence in writing is beneficial. You can follow a verbal conversation with an email saying, “To recap the terms of what we discussed…” and then briefly summarize the terms so there is a written record of it. While it is not the same as or as strong as having an actual signed contract, it does help to leave some trail of proof if things go wrong down the line. This is a good idea especially for situations where contracts aren’t always used, like casual agreements with venue talent buyers or promoters.

This article was originally published on Sonicbids.com.

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

If this article is considered an advertisement, it is general in nature and not directed towards any particular person or entity.

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June Music Legal and Business Roundup

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Categories: Copyright, Infringement, Legal Disputes, Legal Issues, Music, Music Industry, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

cowgirl, lasso, roundup

Image via freeimages.com

Here’s a recap of my article’s this month:

 

The most talked-about topic in the music legal world this month was certainly the copyright infringement case where band Spirit is sued Led Zeppelin over allegations that “Stairway to Heaven” infringed on Spirit’s song “Taurus.”  The good news is that Led Zeppelin Wins ‘Stairway to Heaven’ Jury Trial!

Here’s a recap of the week’s trial coverage:

What was also exciting is the recent push by artists to urge online content providers like YouTube to #valuemusic.  This call to action also involves the request to reform the Digital Millennium Copyright Act (DMCA) which allows safe harbor provisions for YouTube and other online content providers.

In other news, those on the other side of the spectrum are filing lawsuits to force certain musical compositions into the public domain so that they don’t have to pay the license fees for them.  This is one of a few lawsuits to follow the “Happy Birthday” case.  This is certainly not a way to #valuemusic.

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Key Clauses in Management Agreements Part 4: Key Man Clauses

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

Erin M. Jacobson, Esq. - Key Man ClauseIn the last set of articles regarding management agreements, I have explained the term, commissions, and sunset commissions. In this article, I will explain what is known in the industry as the “key man clause.”

A good music attorney representing the artist will make sure there is a “key man clause” in the artist’s management agreement.

What happens if you sign with a management company and then your manager leaves the company? What if the other people at the company don’t understand your artistic vision or image, don’t jive with your personality, and/or don’t advocate for your career? I bet you’d wish you could continue working with the particular manager that has left the company, right? Right.

The scenario described in the paragraph above is exactly what the key man clause protects against. While it won’t be labeled as a “key man clause,” a good music attorney representing the artist will make sure that there is language in the agreement ensuring that if the artist’s specific manager leaves the company, the artist has the right to also leave the company and follow the manager wherever (s)he goes.

This language does not obligate the artist to leave the management company. If the artist feels there are others at the company who can manage the artist’s career just as well (or maybe better) than the leaving manager, then the artist is free to stay with the company. However, the artist does have the option to leave and follow the leaving manager at that point to protect the artist against being stuck in a management arrangement without someone that advocates for the artist.

Many management agreements don’t include this language and many artists (and some attorneys!) don’t know to ask for it.

If you need a management agreement drafted or reviewed click here to contact me now.

If you need a DIY solution in the form of a template agreement, get one from Indie Artist Resource ( CA residents click here  and non-CA residents click here).

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Are You Sure You Own Your Masters?

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

Erin M. Jacobson, Esq. - Master Ownership

What are Masters?

Throughout the music business, master recordings or “masters” are typically regarded as to as the original or official recording of a performance fixed in a tangible medium like tape, ProTools file, or even mp3, from which copies can be made. Masters are usually recorded in a recording studio or similar setup and these are the original tracks that get mixed and mastered (another sound processing step using the same term but with a different meaning than a master recording). Released recordings purchased on a CD or digital download are not masters, these physical goods are copies of the original masters.

Who Owns the Masters?

Common sense and matters of principle usually cause most independent artists to feel they should own their masters because they are the ones that contributed the performance and are often paying for the recordings. However, oftentimes other owners can be involved as master ownership can vary based on law as well as contract.

Some important aspects in copyright law refer to joint authorships and contributions to collective works. True joint authors that meet certain requirements will co-own a copyright and will be able to exercise the same rights in regard to that copyright. People other than the artist who were involved in the recording of the masters can make the argument that their contribution to the recording counts as a copyrightable contribution and thus makes them joint owners.

Contributors

Independent producers and engineers

These contributions can include influencing the sound whether by musical contribution or other direction, recording techniques, microphone placement, etc. Some producers and engineers are more involved than others. With engineers, it’s mostly about the recording and/or mixing techniques used. In the case of producers, they might just be advising on the sound and encouraging the best performances from the artist, or they might actually be playing instruments on the recordings or co-writing the songs. Producers and engineers may be able to argue partial master ownership based on their contributions, but many independent producers are also using contracts to ensure they own all or part of the masters in an attempt to build an income-producing catalog in addition to their producer fee and royalty. For some producers with great influence in the industry, this may be a requirement for artists to work with that producer, however, I always advise artists to make sure that giving up this ownership is actually worth the success this producer will add. Do not give up ownership (or at least not a large portion of it) without being certain that it will be worth it from a career standpoint.

Performing musicians

The contribution here is usually singing or playing instruments, but in either case it is considered a performance and the performer has rights in and to his or her performance. In some cases the vocalist or musician may simply be singing or playing exactly as instructed, and in some cases may be contributing riffs or other variances adding to the work. In either instance, just paying the vocalist or musician for services rendered may not prevent them from coming back to claim rights in their performances later. Having the vocalist or musician sign an agreement making sure they are giving up all rights to their performance and any contributions they have made is essential.

Recording Studios

Recording studios sometimes say that they own the masters and they will then release the ownership to the artist once the bill has been paid. Studios argue this because the masters were recorded on studio property, with studio equipment, and studio employees. While these arguments have been successful in past cases regarding photography, success of these arguments from a music industry standpoint would depend on the actual circumstances of the situation. While the studio does have an argument based on this contribution, these tactics serve mostly as a way for the studio to make sure it gets paid.

Most artists think because they may have paid these other people for their services, that their ownership rights are covered. However, paying for something doesn’t always mean ownership of it, especially under copyright law. Section 202 of Copyright Law says “Ownership of a copyright, or of any of the exclusive rights under a copyright, is distinct from ownership of any material object in which the work is embodied.” So while you may have tape (or hard drive) in hand, that won’t stop someone from claiming an ownership stake of the copyright.

Record Labels

Usually, a recording agreement will provide that the label will own all master recordings recorded by the artist during the term of the agreement.

“Work made for hire” is another buzz word that artists (and labels) think applies because there was payment for services – and because mostly all recording agreements include this language. A work made for hire must be made by an employee under the scope of his or her employment, or in the case of independent contractors, must be specifically commissioned by the party seeking to own the work and fall within certain categories listed in the law. In most situations where artists are recording music, the parties involved (whether it be artist v. label, artist v. recording studio, artist v. producer/engineer, etc.) are independent contractors, so the employee provision will not apply. Sound recordings are also not included in the specific categories that copyright law lists as eligible for work made for hire status. Most labels make the argument that record albums are collective works (one of the allowed work made for hire categories), but this ambiguity leaves masters open for joint ownership without a proper copyright assignment.

In the Real World

A recent example occurred where A&M Records sued a recording studio claiming one of the studio owners had rights to the master recordings for the album “Temple of the Dog”, by the band of the same name, a side project between musicians Chris Cornell (Soundgarden, Audioslave) and Eddie Vedder (Pearl Jam). The label claimed it bought the masters and the rights from the studio and had an agreement to prove it, but those on the studio side said that not all owners of the studio had signed the agreement and the owner who had not signed the agreement had not given up his rights to the recordings. The lawsuit recently settled out of court, and the tapes were returned to Chris Cornell.

 

What should an artist to do to ensure master ownership?

Artist intending to fully own their masters should have written agreements in place with everyone involved in the recording process — the studio, engineers, producers, and hired musicians. These agreements should clearly state that the artist owns the masters and include language whereby these contributors will transfer their rights in the masters to the artist.

These agreements do involve many components and complex language, so they should be drafted by an experienced music attorney. If the artist’s financial situation prevents him from hiring an attorney (or other reasons prevent hiring an attorney), then DIY templates of the appropriate agreements can be downloaded from Indie Artist Resource (For IAR templates, CA residents click here and Non-CA residents click here).

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

If this article is considered an advertisement, it is general in nature and not directed towards any particular person or entity.

This article was originally published on Sonicbids.com.

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