Week 1 Class Notes

19 Sep

I.  Who Owns What and How the Money Flows (Sept. 18)

A.  Rights and Royalty Streams in Recording Artist and Music Publishing Agreements

1.  Deconstructing the Sound Recording

Copyright: An original work of authorship that has been fixed in a tangible medium of expression

(a) CIRCLE P

Phonorecord/Sound recording/Master  [(P)] vs.

CIRCLE C

Non-dramatic musical work/musical composition/Song [©]

Non-dramatic  vs. dramatico-musical work

Songs: controlled vs. noncontrolled or “outside”)

(b)

℗, ©, ℗ & ©

(c) Royalty streams:

(i)  Patent in compact disc

(ii) Patents in mp3 encoder/decoder

(iii)   Artist (featured artist), Joint artist, featuring, step out
(iv)  Producer, mixer
(v) Non-featured artists and sidepersons and union

(vi)  Photographer
(vii)   Graphic artist
(viii) Recording studio
(ix)Distributor
(x)  Aggregator
(xi)   Duplicator
(xii)  Record company
(xiii) Songwriter
(xiv) Music publisher

(xv) SoundExchange—indirectly, if master is performed online or on satellite radio

(xvi)  Master use licenses/net receipts
(xvii) Record company or production company
2.  Deconstructing the song

(a)  Songwriter, co-writers

Joint authorship:

a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole.

Joint owners of a copyright each have the right to issue a non-exclusive license in the whole provided there is no “waste” and that there is no agreement to the contrary among the joint owners.

What is a mechanical royalty?

“Minimum statutory” set by Copyright Royalty Judges

Compared to tariff system in Canada

What is a compulsory license?  Phonorecords that have been released

First use license: Exclusive right

Issues for artists who co-write with outside writers:

Controlled compositions issues for mechanical royalties in the US and Canada

¾ rate license (full on digital)

Cap on number of songs (10 x ¾, 11 x full, 12 x ¾, 10 x ¾ unless affiliated writer)

Free video sync license

Paid only on royalty bearing sales

Approvals on sync licenses

All these issues should be covered in a split agreement (note major publishers will not usually agree to anything other than the controlled comp rates)

Protection for outside writers

(b)  Music publisher (tracking the PRO membership) admin vs. copub, single song

(c)  Writer share and publisher share: 50/50, 75/25 co-publishing split

50/50 is copyright ownership between artist publisher and co-publisher

75/25 is income split 50% to writer plus 1/2 of 50% publisher share of income, to equal 75% and 25% to co publisher

At source vs. receipts

Foreign subpublisher’s shares/bonuses

(d)  Royalty types:
(i)  Mechanical royalties
(ii) Performance royalties
(iii) Film and TV licenses—cue sheets

(iv) Score vs. Songs

Studio/film company/TV company owns the copyright in the score, composer keeps the writer’s share

If low budget, composer retains copyright in score subject to a holdback term of years or limitation on using in another film

Soundtrack songs: Composer owns the song, studio is co-publisher and administrator

B.  Ancillary Agreements

1.  Record producer agreements (Questions for Artists: Record Producer Agreements)

Percentage of income vs. royalty rate

producer royalty (e.g., 4%)

all in rate (e.g., 16%)

net artist rate (all in-producer, or 16-4=12%)

retroactively to record one after recoupment of recording costs at the net artist rate

2.  Mixer agreements

Joint authorship applies to sound recording copyrights

4.  Split agreements

C.  Band Business:  Registering with Performing Rights Organizations

ASCAP/BMI/SESAC

Public performance of sound recordings: 1995 the US adopted a limited performance right for sound recordings that applies to webcasting, simulcasting and satellite radio

SoundExchange (featured artists 45%, nonfeatured artists 5%, SRCO 50%, producers get percentage of featured artist under LOD)

Webcasting/satellite radio/simulcasting: Section 114(g) of Copyright Act

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