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Radio Seeks to Pay Songwriters Lower Rates — Again (Forbes.com)

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Categories: Articles, Business, Legal Disputes, Legal Issues, Music, Music Industry, Music Industry Interviews, Performance, Royalties, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Radio Seeks to Pay Songwriters Lower Rates — Again

By:  Erin M. Jacobson, Esq.

This article was originally published on Forbes.com.

A committee representing roughly 10,000 commercial radio stations has sued performance rights organization Global Music Rights (“GMR”) in an effort to further reduce the amount radio stations pay to music composition creators and rights owners for performances of their works. This committee is the Radio Music Licensing Committee (“RMLC”) and it claims that GMR has created an artificial monopoly over works in its repertoire.

Performance rights organizations (“PRO’s”) are organizations that track and collect performance royalties on behalf of songwriters and music publishers. In the United States, there are four PRO’s: ASCAP, BMI, SESAC, and GMR. ASCAP and BMI are the two largest U.S. PRO’s and are also non-profit organizations. Since 1941, ASCAP and BMI have been subject to consent decrees issued by the Department of Justice. These consent decrees are agreements that allow the government to regulate ASCAP and BMI’s license fees and how they operate in order to prevent monopolization and encourage competition. SESAC and GMR are both independent, privately owned companies that operate on a for-profit basis and are not subject to consent decrees.

Music industry mogul Irving Azoff founded GMR in 2013 in order to provide a more boutique experience for managing performance rights licensing and potentially command higher rates for the performances of works in its repertoire, which includes compositions written and/or performed by artists such as Adele, The Beatles, Pharrell Williams, Katy Perry, Madonna, and many more.

Because GMR is not subject to a consent decree, it can deny a license to perform the works in its repertoire and can also negotiate license rates as it sees fit. The RMLC argues that the license fees required by GMR are exorbitant and seeks to lower them by forcing GMR to submit to judicial rate-setting proceedings, which would require a judge to mandate the rates GMR can charge its licensees. This is similar to procedures mandated for ASCAP and BMI, but without subjecting GMR to a full consent decree. The RMLC previously filed a similar suit against SESAC and reached a settlement in the RMLC’s favor.

Terrestrial radio makes its money on advertising revenue, and while radio is far from dead, it no longer holds the status of its heyday. Terrestrial radio and other broadcasters regularly fight to reduce license fees, as terrestrial radio lobbyists were also part of the group in favor of the Department of Justice’s crackdown on ASCAP and BMI’s licensing platforms, the outcome of which is still pending.

Most observers of this situation usually fail to mention that the public perception of radio’s purpose is music promotion. Without music driving the listenership of certain stations, those particular stations would not earn the ad revenue from advertisers who want to reach those stations’ listeners. However, the stations repeatedly seek to reduce compensation to the songwriters and music rights owners that create the very music that establishes their listenership and drives their revenues.

Terrestrial radio isn’t the only industry trying to reduce payments to music creators and rights’ owners. Those of us who regularly handle music licenses know that attempts to undervalue music also come from Internet and digital companies, as well as small bars and restaurants. Visual productions seeking synchronization and master use licenses also regularly try to lowball license fees or request gratis uses.

It is up to music creators and rights’ owners to value music (#valuemusic) and require proper payment for uses of their music, and to those that use music to recognize the value that music brings to their project or 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 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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Erin M. Jacobson featured on Forbes.com

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

I am honored announce I am published on Forbes.com.  My first article for Forbes discusses Frank Ocean’s decision to go independent after his split from Def Jam.

Below is the text of the article and stay tuned as more will be published!

Checkmate:  Frank Ocean Goes Independent

By:  Erin M. Jacobson, Esq.

Originally published at Forbes.com.  Also reposted at Hypebot.com.

Frank Ocean has chosen the road less travelled for major label artists. He recently split with Def Jam, independently released his latest album, Blonde to chart success, and has refused to submit the album for Grammy voting consideration. While a major label deal was once the holy grail of industry success, what does it mean for artists in today’s industry?

Def Jam released Ocean from his deal in September 2016, a relationship described as “a bad marriage” by Spin magazine who also reported that Ocean’s release from his deal was negotiated. A condition of the split allowed Def Jam to distribute Ocean’s album Endless, while then freeing Ocean to release Blonde under his own imprint. In a recent interview for the New York Times, Ocean described his deal with Def Jam as “a seven-year chess game” and used his own money to buy himself out of his contract and reclaim his master recordings.

Ocean’s “seven-year chess game” refers to the seven-album deal structure typical for major labels. Major labels will sign an artist to a seven-album deal, meaning that the artist is obligated (often subject to pick-up options exercisable only by the label) to release seven albums with the label. This concept can be deceiving to those who don’t understand the structure because the length of the contract is tied to the number of albums released rather than a term of years. Fifty years ago the industry moved at a pace where an artist could release at least one album per year and then be done with the contract in seven years. However, artists today often take more than one year to write and record a new album, often not getting back in the studio until being on the road for almost a year after a prior album’s release. The reality of this schedule means that it often takes two years or more before a follow-up release and thus locks the artist into the contract for as long as it takes to complete the seven albums.

What is more unique about this situation is that Ocean not only bought himself out of the contract, but bought out the rights to his recordings as well. Major label (and most independent label) recording agreements stipulate that the label will own the artist’s recordings, as the label is usually fronting the money to make the recordings. Recording agreements don’t automatically come with the right to buy back masters; that clause is usually included via a good music attorney that knows to negotiate for it. However, many artists that have buy-back rights included in the contract don’t get to exercise those rights due to lack of funds. Ocean was in a privileged position in that he was able to accumulate enough of his own money to meet what was probably a hefty price for his freedom.

Ocean’s move towards independence echoes the increasing trend within the industry to control one’s own destiny and retain ownership of one’s work, a view shared by the majority of my artist clients. Today’s artists relish being independent, but the challenge is remembering that a music career is not only creative, it is also a business and needs to be run as such. Ocean seems to have that mentality. “I know exactly what the numbers are,” Ocean states. “I need to know how many records I’ve sold, how many album equivalents from streaming, which territories are playing my music more than others, because it helps me in conversations about where we’re gonna be playing shows, or where I might open a retail location, like a pop-up store or something.” This level of attention to detail is essential for independent artists looking to build a lasting career.

Ocean’s fame earned while he was backed by a major label puts him in an advantageous position because he has already accumulated a fanbase whose continued support will earn him a lucrative living as an independent artist. Artists in this position no longer need major labels because they have enough fame, opportunities, customer loyalty, and cash flow to finance their future efforts. It is much more difficult for artists still building their followings to achieve the same level of success outright, but many independent artists now look more towards making a living off of their music rather than superstardom. In today’s market, ownership and control of one’s work coupled with keeping a majority of the profits entice artists more than a major label’s deep pockets. As Ocean said:

It started to weigh on me that I was responsible for the moves that had made me successful, but I wasn’t reaping the lion’s share of the profits, and that was problematic for me.”

*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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Ask a Music Lawyer: How to Actually Hire a Lawyer

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

By:  Erin M. Jacobson, Esq.

This article was originally published on Sonicbids.com.

I’ve previously discussed what to consider when hiring an attorney and how to find the right attorney for you. Some questions have been asked about what the hiring process actually looks like once you have found the attorney with whom you want to work. Overall it’s fairly simple, however, the process can be filled with uncertainty if you’ve never hired an attorney before. Procedures vary slightly between attorneys, but here’s an idea based on the general landscape and my own personal experience.

1. Speak with lawyer about fees, how those fees are paid, and make sure you are able to pay those fees

As I discussed in a prior article, attorney fees typically range from $250 to $1,000 per hour. When you pay an attorney hourly, you’re paying for that attorney’s time and skill provided during the time spent on your matter, which usually includes phone calls, correspondence, and advising you, in addition to drafting or reviewing an actual document. The attorney will usually use a timer or other program to keep track of the exact time spent on your matter.

Some attorneys will charge certain tasks on a flat fee or charge on an overall percentage basis. While hours are not tracked under these models, the principles of paying for the attorney’s skills are the same. Percentage clients are usually those making sizable incomes and receiving large advances, as otherwise the attorney would be putting in a lot of time in exchange for pennies.

Hourly and flat-fee models will often require an upfront retainer, which is an advance payment of fees by the client. The attorney will then consider the funds “earned” after completing the work covered within that month’s billing cycle.

If there are still funds left in the retainer, those can be carried over to future work or refunded to the client. Some attorneys do still allow for payment after the work has been done, but that has become rare. Attorneys working on a percentage are usually paid by the client’s business manager.

2. Sign the engagement letter and complete any attorney paperwork

When you’ve communicated to the attorney that you would like to hire him or her, the attorney will most likely require you to sign an engagement letter or fee agreement.

This letter is an agreement between the client and the attorney and is there for the client’s protection. The letter usually explains what services the client is hiring the attorney to perform, the agreed-upon fee, an explanation of billing practices and other charges, as well as office policies. You have the right to have this letter reviewed by another attorney.

Other attorneys require some other forms as well, such as information forms to keep a client’s contact and other relevant information on file for convenience. The attorney will let you know what forms are required and how you should submit them.

3. Send contracts/agreements

Once you’ve officially hired the attorney, you can then send whatever contracts or other information you need the attorney to review. The attorney can also start making phone calls or otherwise acting on your behalf.

The exact actions will vary based on your matter, but the gist is that the attorney cannot do any work for you or act as your representative until officially hired by you.

4. Introduce the attorney to other team members

If you have a manager, agent, or other team members you work with and they haven’t already been introduced to your attorney or know that you have hired a particular attorney, they should be notified and introduced to your attorney. Ideally, this would have already occurred so you could have made sure everyone on the team would work well together.

5. Be respectful of the attorney’s time and business practices

Most attorneys keep fairly regular business hours, and in the music business that usually means about 10:00 a.m. to 5:00 or 6:00 p.m. Be respectful of your attorney’s time and don’t expect him or her to return your phone calls or emails outside of these hours unless you know that your attorney keeps a different schedule or is on-call 24/7.

Also remember that you’re not the attorney’s only client, so allow a reasonable amount of time for the attorney to respond to you before following up. Also, don’t assume the attorney’s phone number is a cell phone, so don’t text your attorney unless you know it’s okay to do so.

In addition to being respectful of the attorney’s time, be respectful of your attorney’s payment policies. For example, if the attorney requires a retainer, don’t fight to pay only after work has been completed.

Also, be mindful of how you are being billed (hourly, percentage, flat fee) and what you are being billed for (phone calls, emails, drafting, hourly minimums) so there are no surprises later.

6. Be professional.

Your relationship with your attorney is a professional one, so act accordingly. Attorneys are allowed to be friends and socialize with clients, but don’t make sexual advances towards your attorney, call your attorney names, telephone your attorney when intoxicated (unless you need to be bailed out), or exhibit other non-professional behavior.

Be organized and make sure the attorney has the information needed to do the work for you. Not only does it make the work flow smoother, but it cuts your costs because the attorney doesn’t have to spend his or her time chasing you for information.

Remember, information you give your attorney is confidential. It is important to be honest about all information with your attorney, as your attorney cannot adequately represent you or handle a situation for you if you withhold information.

If you don’t know how your attorney wishes to handle something, what your attorney’s particular policies are, or if there’s something else you don’t understand – ask! As in all relationships in life, honesty and communication are the best policies.

7. Value your attorney and the contribution he or she makes to your career

Your attorney has had years of rigorous scholastic training and experience in the real world. In the case of the music industry, attorneys needs to have a deep understanding of a very complex set of laws (intellectual property, contracts, etc.) in addition to the business and intricate payment practices of a very unique industry.

When you hire an attorney, you’re getting the benefit of the attorney’s vast amount of knowledge and experience. You’re not just paying for a physical product like a contract, you’re paying for the attorney’s expertise and the ability to handle a complex issue effectively and efficiently.

If there’s a legitimate problem with the work or a bill, then by all means address it, but don’t ask your attorney to handle a matter and then complain about what it cost, as it’s insulting to the attorney and the service he or she provides to you.

Overall, just use common sense and be respectful. Your attorney is there to look out for your best interests and is one of the most important relationships of your career.

 

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.

 

Erin M. Jacobson is a practicing music attorney, experienced deal negotiator, and seasoned advisor of intellectual property rights. She protects clients ranging from Grammy and Emmy Award winners to independent artists, record labels, music publishers, and production companies. Ms. Jacobson also owns and oversees all operations for Indie Artist Resource, the independent musician’s resource for legal and business protection offering template contracts, consultations, and other services designed to meet the unique needs of independent musicians.

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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 – Video Format

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Categories: Legal Issues, Music, Music Contracts, Music Industry, Music Publishing, Videos, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

In case you didn’t read the whole article I just posted and you’d rather watch me explain it to you – here are the videos!

Part 1:  Songwriter Split Agreements

Part 2:  Producer Agreements

Part 3:  Band Agreements

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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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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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