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Synching Up Copyright, Contracts, Amazon and Warner Music Group

A little over a week ago, I attended through meetup.com, a panel discussion on synchronization licensing. As a refresher, synchronization licensing, or “synch” licensing, is the permission required to incorporate copyrighted music into audio-visual works, such as films TV shows, ads, videogames and, yes, YouTube videos. The panel was put together by Legal Hackers and included computer types, artists (including one who produced a video of a 7-foot clown singing – quite well, I might add, a cover of Lorde’s “Royals”) a music publisher and a copyright lawyer.

If this discussion had occurred a few years ago, I would have expected it to have a copy-left, copyright-is-bad slant. However, in this digital, DIY climate, even the video remix artist on the panel recognized the importance of copyright and was quite knowledgeable about synch licensing. Everyone seemed to agree that artists should be paid, but obtaining synch licenses is a real obstacle because of what economists would call high “transactions costs.”

Proposed solutions included compulsory licenses, as with audio-only “mechanical” licenses” like those issued by The Harry Fox Agency and/or some form of “blanket” license similar to those that ASCAP and BMI provide. The problem is, many artist contracts have approval rights for synchs because unlike a simple cover, putting their music to video, especially if it’s to a product, service or cause they don’t like, can drastically change the meaning of the music. So, there’s no clear solution yet, but it will probably involve technological improvements in song identification and licensing procedures.

Speaking of contracts that make it more difficult for creators to earn income from their works, Amazon is launching a new streaming service to compete with the likes of Spotify, Pandora and YouTube. I was recently asked by a client to advise as to whether he should sign up. Having reviewed the Amazon contract, the executive summary of my advice, in which others concur, is “don’t.” Among other things, Amazon states it can change the royalty rates at any time. That’s bad enough. But the contract also says you can’t take your works out of their service unless you also take your music down from all the other services. That’s even worse.

Amazon is obviously a 900 pound gorilla with very clever lawyers but I think they may be a little too clever here as other lawyers are pointing out that these provisions are perhaps a tad overreaching. But going back to basic economics, moral outrage from the blogosphere won’t make Amazon change its terms. That will only happen if content owners refuse to sign up and Amazon doesn’t have enough music to offer to be able to compete.

And speaking further of contracts, it’s just been reported that Warner Music Group’s labels have entered into a $11.5 million settlement with various artists, including Sister Sledge, relating to payment for distributions of downloads and mastertones (ringtones). This class action lawsuit focused on whether these distributions were “sales” or “licenses” of the artists’ master recordings. In a typical recording contract, sales are typically paid in a 10-15% of the sale price and subject to all forms of deductions and recoupment, depending upon the language of the contract. License fees, on the other hand (such as a synch license for using the song in a film or TV show, for example), are typically split 50-50% between the label and the artist. In older recording contracts, the language may not be clear as to how these newer technologies should be handled. You can guess which side made which argument.

The takeaway: you – or at least your lawyer – should always carefully read any contract.

The Biggest Mistake Composers Make About The Music Business

I hear it all the time.  Composers think that if they just sign up with a performing rights organization (PRO) like ASCAP or BMI that’s all they need to do to protect themselves.

Don’t get me wrong – every composer should belong to a PRO. But there are at least seven ways a composer can make money from the use of his music and the PROs only handle one.

Most composers are never taught anything about the music business. They’ll sign up with a publisher and leave everything to them. But it’s harder than ever to get a publishing deal and publishers typically want to own the copyrights to your music and take 50% of the royalty income – and a lot more for sheet music. So either by choice or necessity, most composers are self-published. But do you really know what’s involved in being self-published?

There’s much more to it – and more money to be made – than just selling downloads and collecting PRO royalties.

Here’s how composers make money from their compositions:

Licensing of Non-Dramatic Public Performing Rights: Your PRO licenses performances of your works in live venues, in radio and TV broadcasts and over the internet. And your PRO will pay you directly. However, this is the only income stream your PRO represents. They don’t handle any of the others!

Licensing Works in Audio-Only Sound Recordings: Record labels get a mechanical license when a composition is recorded and distributed in LPs, CDs MP3s and other audio-only formats, whether in physical copies or in downloads.  Once a work has been commercially recorded, anyone can “cover” the work, provided the label pays applicable mechanical royalty, either directly to a musical publisher or through a mechanical rights clearing house, such as The Harry Fox Agency, Inc.

Licensing Music in Audiovisual Works:  When someone wants to use a composition in an audiovisual work, as in films TV shows and video games, they need to get a “synchronization” or “synch” license.  There is no set rate for synch licenses and fees vary greatly from a few hundred to hundreds of thousands of dollars depending upon the value of the work, the nature of the project (blockbuster movie or student film), the usage (title credits or underscore), the territory (worldwide, US only) and the duration of the license (perpetuity or one year).  If someone wants to use pre-recorded music in a project, they need two licenses: the “synch” license for the use of the underlying musical work and a “master use” license from the owner of the particular recording of the work, usually a record label.

Sales of Printed Materials for Smaller Works:  Smaller works, like SATB chorals, chamber ensembles (like string quartets), solo piano pieces and even jazz and wind ensemble works are usually sold, not rented. They may be sold directly to the public online in PDFs or in printed editions through distributors such as Hal Leonard and Alfred Music.

Rental of Performance Materials: Because they are both voluminous and expensive to produce, performance materials for larger-scale pieces such as works for full orchestra, operas and musicals are typically handled on a rental basis. That means the rental agent rents out the score and parts for a fee to the performing organization or presenter who then sends them back.  Rental fees are based upon a variety of factors, including the duration and instrumentation of the work and the level of the performing group and may run several hundred dollars per performance.

Licensing of “Grand Rights” or Dramatic Performances: PROs in the United States only license non-dramatic (sometimes called “small rights”) public performances of your work. If you write an opera, musical, ballet or other dramatic or choreographic work, your PRO will not license performances of these works and you won’t get paid performance royalties from them. That means if you don’t have a publisher that means you’ve got to do this yourself.  Grand rights license fees are typically based upon a percentage of “the house” or ticket sales, determined by the average ticket price and the capacity of the venue.

Reprints of Excerpts, Sampling, Arrangements and Other Permissions:  If someone wants to use an excerpt of your work in an article or text, wants to create an arrangement or wants to reprint lyrics in liner notes, or wants to quote or “sample” your composition in a new work, they will need permission from the owner of that work. Similarly, composers will also need to obtain permission if they quote or sample someone else’s work or set copyrighted text to music. There is no set rate and permission may be denied for any reason.

So now you know there’s a lot more to music publishing than just belonging to ASCAP or BMI.  Do you think you can do all this by yourself? Do you know what the appropriate deal points and fees are?  Do you want to spend your time photocopying and shipping performance materials?

Talk to other composers about their experiences with music publishers and with self-publishing. These days, it doesn’t have to be an either/or proposition. There are ways composers can control some aspects of their business themselves while having publishers and other professionals handle others. And if you do work with a publisher, publicist or other professional, make sure you also talk to a lawyer before signing the contract.

 

This article is adapted and abridged from a more detailed article on music publishing available to American Composers Forum members on the ACF web site.

Happy Birthday, You’re Sued!

The mere filing of a copyright case doesn’t usually make a major splash in the media but when it involves the most performed song in the world, even The New York Times takes notice.  Apparently, filmmaker, Jennifer Nelson, was making a documentary about the song, “Happy Birthday to You” and didn’t like the idea that Warner/Chappell Music insisted on her taking a $1500 license to use the song in the film as she – and probably most people – think it’s in the public domain.  So yesterday, Ms. Nelson filed a birthday suit of sorts: an action in federal court seeking a declaratory judgment that the song is, in fact, in the public domain and no permission is needed to use it.

So, in little more than the time it takes to sing the song, I’m going to use it as a way to review a few basic copyright law principles that are sometimes misunderstood. Let the questions begin!

What is the public domain? The public domain is the body of works, music, novels, plays, texts, etc., that is no longer (or never was) protected by copyright and is therefore free for anyone to use or adapt.

When is a song in the public domain? As they say in Facebook status land, “it’s complicated.”  For songs written since 1978, a U.S. copyright lasts for the life of the author (or last surviving author if there’s more than one) plus seventy years. If there’s no author, such as a work-for-hire, the term is 95 years. For older works, the U.S. used to have a system of an initial term and then the copyright had to be renewed for, you guessed it, the “renewal term.” For these older copyrights, the initial term was 28 years and the renewal term, through various extensions, was increased to 67 years, for a total of 95 years.  There’s more to it than this, but basically, if a work was written prior to 1923, it’s most likely in the public domain here. Maybe you’re thinking that’s an awfully long time when the Constitution says that copyrights are supposed to be “for limited times.” Larry Lessig thought so when he challenged the 1998 Sonny Bono Copyright Term Extension Act but the U.S. Supreme Court strongly disagreed.

Do I need to get a license to sing “Happy Birthday to You” to my kid at my backyard barbecue? Even assuming the song is still under copyright – and as we’ll soon see that’s a big assumption – the answer is still “no.” U.S. Copyright law gives copyright owners a certain bundle of rights. Among them is the exclusive right to authorize “public performances.” A backyard barbecue, a birthday party in your basement and most other gatherings among “a normal circle of a family and its social acquaintances” is a private performance for which no permission is needed.

What if I sing the song at a gig or at a party of 500 of my closest friends and acquaintances? You’re probably safe to sing the song – or any other copyrighted song. Most public venues where music is performed (concert and catering halls, clubs and stadiums) or broadcast (TV and radio stations) have licenses from “performing rights organizations” such as ASCAP, BMI and SESAC. These companies issue “blanket” licenses to venues and broadcasters (and web sites, too) which allow the licensee to perform all the works in their respective repertories as much as they want.

Why would a filmmaker need a license? The permission that Warner/Chappell sought from Ms. Nelson for her film is known as a “synchronization” or “synch” license because the user is synchronizing music to picture. Whenever a pre-existing copyrighted song is used in any audio-visual work, such as a film, TV show, TV ad or videogame, a synchronization license is required from the copyright owner, usually a music publisher. If you’re using pre-recorded music, then you need permission from both the music publisher of the song and the copyright owner of the recording, typically a record label.

What if I post a video of my kid dancing to a Justin Bieber song? Putting aside issues of taste, technically, you’d need synch licenses from the music publisher(s) of the song and from The Bieb’s label although the actual performance of the video may be covered if the site has licenses from the performing rights organizations. As a practical matter, unless your home video is generating millions of views or you’re selling truckloads of DVDs it’s unlikely that anyone will come after you for a technical violation.

So, is “Happy Birthday to You” in the public domain? That’s for the court to decide, but if the facts are as alleged in the complaint and as cited in the  news reports and elsewhere, it seems that the song would be “PD” as we music types say.  The melody is said to come from a song called “Good Morning to All” written in 1893 and, the combination of music and lyrics is said to have appeared in print in 1912, possibly earlier. By my reckoning, if these are the facts, both 1912 and 1893 are prior to 1923. At least one legal scholar, Richard Brauneis, has written a 68-page article (with 320 footnotes!) in which he concludes that the song is in the public domain.

How can Warner / Chappell claim the song is still under copyright? Again, the facts will play out in the lawsuit, but it seems that W/C has a 1935 copyright registration, crediting different writers as the creators of the song. The complaint alleges that this registration is for a piano /vocal arrangement of the song.  Another of the things in the “bundle of rights” a copyright owner gets is the right to make a “derivative work” of the underlying work, such as an arrangement or adaptation. Turning a novel into a film constitutes making a derivative work, which is why the novelist gets paid when the film is made.

For example, the song “Simple Gifts” is a Shaker hymn from the nineteenth century.  Most people know it from Aaron Copland’s arrangement of the tune in his ballet, “Appalachian Spring.” As the original song is PD, anyone can perform the original melody and lyrics or make their own arrangement. But, if you want to use Mr. Copland’s treatment of the work you’ll need permission from Copland’s publisher, Boosey & Hawkes.  So, if the underlying song, “Happy Birthday to You” turns out to be in the public domain, anyone can use it and make their own arrangement of it, as long as they don’t use any particular copyrighted arrangement of the work, such as ones owned by Warner / Chappell.  And, of course, you can write a new song, with your own melody and lyrics, and call it “Happy Birthday to You” as titles are not copyrightable.

It Takes (At Least) Two To Tango: Using Pre-Recorded Music In Audiovisual Works

So you’ve made a funny video of your cat that you want to post on YouTube and you think that if you put the Stray Cats’ Stray Cat Strut as the soundtrack it would be really groovy. Now, you know a little something about copyright law and you actually do the right thing and get permission from EMI Records to use the “master” in your video.  Correctly feeling that you’ve achieved a minor miracle by getting someone in the synch licensing department at a major label to pay attention to your request, you think you’re done, right?

Wrong. To use pre-recorded music in an audio-visual work, whether it’s a feature film, TV show, video game or a video on a web site, like YouTube, you need the permission of both the copyright owner of the recording (typically a record label) and the permission of the copyright owner(s) of the underlying song that’s embodied in the recording (typically one or more music publishers).  Why? Because the Copyright Act says so.  The permission that you need is called a “synchronization” license – as you’re synchronizing music to picture – or a synch, for short.

To better understand this, think about songs that have been “covered” a lot. Most jazz fans like me are familiar with the Johnny Hartman recording of Billy Strayhorn’s Lush Life, which many think is the definitive rendition.  My favorite is Nat Cole’s – the original, not the Cee-lo Green remix although I like that, too.  But there are dozens of recordings of that standard to choose from, including covers by Johnny Mathis, Linda Ronstadt and Robert Goulet.  The reason for so many covers is that the song is itself a copyrighted work, with a legal life separate and apart from any individual recording of it. And the copyright to the song is likely owned by one or more music publishers.

Therefore, in order to secure all the rights you need have your cat struttin’ away, you have to get the permission of the owners of the song, EMI Longitude Music and Rockin’ Bones Music, Inc. (at least that’s who BMI’s web site says are the music publishers) and permission of the owner of the particular recording of the song, EMI Records.  That means in order to put the track of your choice to your swingin’ cat video, you need to get three companies to dance: the record label and two music publishers.

Well, you say, “I’m not selling the video. Do I still need permission? And if I just put it up on YouTube or my own web site, what’s anybody really gonna do about it?” You’ll have to read my next post to get the answers.  Stay tuned.

© 2011 Marc D. Ostrow