Radio And Restaurants Screwed The Recording Artist

Originally posted on bpmusic.com on 3/10/2010:

Well, sort of.

Many of you are completely confused about music rights -- like copyright, mechanical licensing, recording master licenses, etc.

Everyone has been there at one time. So don't feel alone.

There's less excuse than ever for confusion with the internet by your side. Reading "from the horse's mouth" is my recommendation.

Start with copyright.gov. Yes, you may have to read some things several times before the meaning becomes clearer. Copy the sections of interest to a word processing file and when it refers you to other sections of the code, copy what's being referred to into brackets at that point. This keeps you from having to jump all around. It's much less confusing. At copyright.gov, you can find links to the actual copyright law and the regulations the Copyright Office have issued under that law. Regulations are published in the Code of Federal Regulations (C.F.R.).

Legal rights in most things are a bundle of many rights.

Before I go further, I am not your attorney or advisor and what I say is intended to get you started on your own search for meaning in all of this. Besides, I am writing this from a composer's viewpoint, not from an attorney's viewpoint. Also, the law is in constant change and this information may be dated when you read it.

Whatever you do, never pretend that you understand what is being said/written about copyrights if you do not truly understand. Do internet searches. Call and ask people/organizations. Even people who work for corporations can be helpful in explaining these things. By all means, check with an attorney if you have any questions.

Regarding music rights, check out "This Business Of Music." Literally, check it out of a library -- it's a book. It can clarify things for you by providing real world examples of how things have been done in the past. The basics in the book still stand. It has been updated, so look for that, too.

Be suspicious of what you read on the internet. If things don't make sense, go back to the source at copyright.gov. Someone may be trying to pull the wool over your eyes. An example would be that some organization implies that I must use their system of operation in order to comply with copyright law. If I read the copyright law and see nothing that requires that I follow their system, I do not have to follow that system. Another example is the commonly accepted "you can legally sample less than 5 seconds" of a copyrighted work without having to pay a royalty. This is not true and never has been. What people are probably confusing here are "fair use" samples. "Fair use" includes use for educational purposes and others. You can read all about them in the law itself.

What's included in the copyright bundle?

1. The right to reproduce the work in copies or phonorecords.
2. The right to prepare derivative works based upon the work.
3. The right to distribute copies or phonorecords of the work to the public by sale or other transfer of ownership, or by rental, lease, or lending.
4. The right to perform the work publicly, in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works.
5. The right to display the copyrighted work publicly, in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work;
6. In the case of sound recordings, the right to perform the work publicly by means of a digital audio transmission.

In the case of a song, there can be many owners of the copyright to the song as it is released to the public. The author of the music, the author of the lyrics, the owner of the recording master, the graphic artist who drew the CD/CD cover and the arranger of the music. With the advent of the singer/songwriter and home recording software/equipment, one person can be all of these people.

Even if these are all separate authors, they could have completed their work on the project as a "work made for hire." This means the author of a particular work does not ever own the copyright -- the copyright is owned by the person/organization that hired that author to do the work. If there is no "work made for hire" agreement, the copyright is assumed to be owned by the author of the work.

The right to reproduce the work in copies or phonorecords. The right to prepare derivative works. The right to distribute.

If you've heard or read about "mechanical rights," this is where they come in. In order for you to get the right to reproduce a work, prepare a derivative and distribute it, you have to advise the copyright owner that you plan to reproduce and distribute the work. The law sets the fee ("statutory fee") you have to pay for this license. Right now, for works under five minutes, you must pay 9.1 cents per copy sold/given away. So, if you record your own CD of ten "cover" songs (authored by someone other than you), for each CD sold, the rights to those works will cost you $0.91.

Who handles mechanical licenses? In many cases, it's the Harry Fox Agency. They represent many music copyright holders regarding mechanical licenses. But, it could be a law firm, a personal agent, the copyright holder, or any other person/entity hired by the copyright holder for this purpose.

The right to perform the work publicly.

Here's where BMI, ASCAP, SESAC, etc. come in. Before radio, music authors made their money by selling copies of their work via piano rolls, recordings and sheet music. Sheet music was HUGE! Everyone wanted to play the latest songs. Restaurants hired musicians to play all the latest (or had a player piano going). Everyone was getting paid -- except the authors of the works performed. Something had to be done! As a result, they created The American Society of Composers, Authors and Publishers, which started licensing their music for public performance. When radio came along, it became a major source of public performance licensing income, too.

This takes me back to the title of this post. Radio and restaurants were paying ASCAP which in turn paid the authors. What about the recording artist who made the song popular? And the owner of the recording? They were left out. They receive nothing in public performance royalties if they do not own the copyright to the underlying recorded work. This is one of the reasons that singers started writing their own songs (or demanded partial ownership before recording the song). It's also the reason that many performers of the early days ended up destitute. While their recorded performances play on and on via radio, TV, movies, Muzak, etc. they receive nothing. The copyright holders of the work (and their music publisher) get all of the public performance royalties. The internet is a different story -- performers/recording companies do get a piece of that public performance license fee "pie."

The lesson here is to always own the music you record! And if you also publish your own music, you get 100% of the public performance royalties (it's normally split 50/50 between author and publisher)!

When you listen to a public performance of your favorite song by your favorite artist, remember that he/she/they are not receiving a penny from the licensing of that performance if the song is owned by someone else. To me, it isn't fair, but that's the state of the law. This is why non-singer/songwriter performers are on tour a lot. Their only income from recorded or live public performance is ticket and merchandise sales. [This may soon change -- there is a move in Congress to include them in the licensing fee structure for AM/FM radio. Also, this is only for terrestrial radio -- the rule is different for satellite radio.]

I've heard the term "synchronization license." What is that?

Here's where things get interesting. If someone wants to use a work that will be synchronized to images for public performance (film, television, internet site, presentation -- flash, powerpoint, whatever), the statutory fee does not apply. It's what the market will bear. Want to record "Happy Birthday" and sell it on CD or for download? That will be 9.1 cents per copy sold. Want to sync "Happy Birthday" -- that will be $10,000 for each use (this is based solely upon rumor -- I haven't checked this out with the copyright holder). HUGE DIFFERENCE! This is why we don't hear "Happy Birthday" more on television or in the movies.

Master Recording License

So far, all I've discussed is the mechanical license for the work. If you want to use an original recording of the work, remember someone other than the song's author may (and probably does) own that copyright. There is no "statutory fee" for this type of license -- it's a "what the market will bear" thing, too. This is why you do not always hear original recordings in commercials, film, television, etc. It's often less expensive to have the song re-recorded than it is to license the original recording.

I hope this starts you on the path to understanding some of the basic concepts in copyright licensing.