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The Impact of the DOJ Decision on Songwriters

By | Lessons, Music Business | No Comments
In a brilliant article originally posted to Daily News Bin, prolific songwriter Maureen McDonald (professionally known as Mozella) describes the dire situation that Congress has placed songwriters. If we don’t get these consent decrees updated, and if 100% licensing isn’t repealed, the music industry will never recover.

In recent years, technology and innovation have changed the music industry in many good ways. While the listeners, the technology companies, and record labels have benefited from the growth of streaming music companies, those changes have negatively impacted the livelihood of songwriters. The antiquated laws, or consent decrees, that have traditionally regulated songwriting royalties for radio play and other uses of music does not address streaming music. As a result, the royalties paid to the songwriters for streaming are miniscule compared to those paid for commercial radio.

Songwriters like me depend on collective licensing through the two main performing rights organizations (PROs) in the U.S., ASCAP and BMI, to negotiate with licensees, track our performances, collect and distribute our royalties to us. Songwriters cannot do this on our own. There are trillions of performances of our songs by hundreds of thousands of businesses every year. ASCAP and BMI both operate as not-for-profits and pay out as royalties to us all the money they collect, deducting only operating expenses. They are governed by Department of Justice consent decrees to allow them to aggregate and license our rights without antitrust concerns. But those consent decrees were written in 1941 and are woefully out of date in the new music economy dominated by streaming, which wasn’t even invented the last time they were updated.

Music is enormously valuable to the streaming services. In fact, it is the only product they offer to consumers. And songwriters are the ones who make all of the music possible. The problem is that because of the outdated consent decrees songwriters make almost nothing when our work is streamed while the streaming companies build their businesses on our creative work, without paying us fairly.

In a devastating blow to songwriters last week, the Department of Justice (DOJ) ruled that they will not review or update the consent decrees, ignoring the voices of copyright experts, members of congress, and thousands of songwriters like me. Those of us who write the music are held hostage by these antiquated consent decrees that make it impossible for us to be paid fairly in today’s world of streaming services that pay us almost nothing. All we asked for were reasonable updates to those consent decrees so we could negotiate fair rates. Instead, the DOJ sided with the streaming businesses in essence picking them as marketplace winners at the expense of individual songwriters who are struggling to make ends meet. Under the consent decrees, streaming services like Pandora and Spotify can use our music even before we agree to the rates, and if we cannot agree, they still get to use our music and a single Federal judge appointed for life sets the rate.

Here’s where it gets really unfair: record labels (and the vocal artists signed to them) are allowed to set their own rates for streaming and they do. They do not have the same DOJ rate court system, so they are free to negotiate a fair market price for their product. And guess what? They’re making money. At the moment, the master recording of a song owned by a record label is earning about 14 times as much as the songwriter of the same song. For example, I co-wrote and own about 23% of the song Wrecking Ball by Miley Cyrus. Pandora streamed Wrecking ball 260 million times according to the statement they sent to me. They paid me $3,000. My payment was similar from Spotify. The Wrecking Ball video also has nearly a billion (yes, that’s billion with a B) views on YouTube and I’ll will most likely make another $3,000 there.

Terrestrial pop radio has traditionally reimbursed songwriters at a fair rate but the music streaming industry is growing rapidly. Soon, streaming will be the only format for music listening and at current streaming reimbursement rates, even hit songwriters will not be able to make a living. Currently, many talented but less commercially successful songwriters are giving up songwriting altogether. Eventually, America’s greatest export (pop music) will disappear.

Still with me? There’s more. In addition to the decision to not update the consent decree, the DOJ also ruled in favor of something new called 100% licensing. This means the traditional, logical practice of ASCAP and BMI licensing only the shares or fractions of songs written by the songwriters they represent will be ended. In Variety magazine recently David Israelite, president and CEO of the National Music Publishers Assn., said that the decision was “a massive blow to America’s songwriters.” “The interpretation that the consent decrees demand that all works must be licensed on a 100% basis is both unprecedented and disastrous to the songwriting community,” he said. “The decision represents a misunderstanding of copyright law and directly violates the legal guidance given by the Register of Copyright. The defiance displayed by these career antitrust lawyers in ignoring the legal opinion of the Register of Copyright is shocking”.

Most hit music is written in collaboration with a number of other writers. Songwriters work together and negotiate what percentage of the song each is entitled to. The collaborating songwriters may be represented by different PROs. Historically, each PRO would negotiate for the percentage of the song that the represented songwriter owned. Under the new 100% licensing, ASCAP and BMI may be asked to license shares of songs by writers they do not represent, throwing the entire music licensing system into unnecessary chaos for no good reason. The uncertainty about how works will be licensed will have a chilling effect on the creative freedom of songwriters to write with the collaborators they choose. If a PRO is collecting for a writer they don’t represent at a rate they didn’t approve, what rights do writers have regarding transparency, payment, etc.?

So why did the DOJ decide on the side of huge technology companies and not hardworking, independent songwriters? The technology lobby is highly organized and powerful in the nation’s capital and unfortunately independent songwriters are not. Keep in mind that when you pay for your streaming service, or when advertisers pay for streaming service ad time, the technology companies are making the money and not paying the songwriters fairly. With all the money they make, they hire lobbyists who work to influence decisions made in our nation’s capital. We need your help!

Help protect the future of the soundtrack to our lives: music.

The DOJ was unfair to us and we need your voices. Please email your local congressman/woman and senators in support of appealing these DOJ rulings and also in support of the Songwriter Equity Act which amends the Copyright Act and also voice your rejection of the 100% licensing ruling. It’s a small step, but everyone’s voice matters. Thank You.

The Importance Of Split Sheets

By | Lessons, Music Publishing, Songwriting | No Comments

Split sheets are very important for all creators that collaborate with others. It can mean the difference between getting paid & not seeing a dime.

A split sheet is a simple document that lays out who owns what part(s) of a particular song. It should have the following:

  • Song title
  • Date
  • Names, Publishers & PROs of all writers
  • Split Percentages
  • Signatures of all writers

Standard practice is to split the percentages equally amongst the writers. For example, if there are two writers, the splits are 50/50. You can also break it down by lyric & melody. For example, if Writer A wrote the music & Writers B and C wrote the lyrics, Writer A would receive 50% and Writers B and C would each receive 25%.

The importance of the split sheet comes into play when a song is placed. If you have this split sheet signed and dated by all co-writers, you have proof of ownership. Several scenarios could occur without this backup, including the following:

  • Someone could claim more than their fair share & put the song into dispute. When a song is in dispute, no one gets paid until it is resolved.
  • You could miss the chance of a song placement because a writer couldn’t be found.
  • The song could get placed & someone could erase you from the credits. No credit = no royalties.

Split Sheet Example #1
Split Sheet Example #2

Copyright Reversion & Its Impact On The Music Industry

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The Copyright Revision Act of 1976 (which became effective on January 1, 1978) included a clause that allowed artists & songwriters to reclaim their copyrights from the publishers & labels they transferred the rights to. This means any song created in or after 1978 is eligible for reversion either 35 years from publication or 40 years from the date of assignment of copyright to a publisher.

For example: a song published in 1980 has the termination window of 2015-2020. If they want the copyright to revert back to them in 2016, the notice must be filed between 2006 and 2014.

This has the potential to completely change the music industry. However, it’s too soon to tell.

While albums released in 1978 are the first batch eligible for possible reversion of ownership to pass from labels back to the artists, so far the only acts to file notice of termination for master right recordings with the U.S. copyright Office include Pat Bentar, Journey, Devo and Billy Joel.

Although 2013 theoretically is the year that master sound recordings’ copyright licenses begin to expire for albums and can revert from labels to the artists, no one is sure what exactly will happen.

Read More @ Billboard.com
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Benefits of Copyright Registration

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Although registration is not a legal requirement for a copyright to exist, there are many important advantages of federal copyright registration. A copyright must be timely registered in order to take legal action against an act of infringement. Without federal registration, you cannot legally prevent someone from copying or using your original work.

Advantages of federal copyright registration include:

  • Copyright registration establishes a public record of your copyright.
  • Your copyright must be registered in order to take legal action against an act of infringement.
  • If registered within five years of publication, your registration certificate is prima facie evidence of the validity of your copyright.
  • If registered within three months of publication or before an infringement occurs, once proven, statutory damages of up to $150,000 plus attorney’s fees could be awarded to you as copyright owner, even if your actual damages are minimal.
  • Registration provides powerful ammunition against potential infringement.
  • If you don’t register your copyright and someone else claims your work as their own, you will have to prove that it is actually yours. Registration avoids this burden of proof.
  • Copyright encourages creativity by giving exclusive property rights to “works of authorship,” enabling the creator to reap financial rewards from their works by controlling access to the works in the marketplace.

The United States has copyright treaties with most countries throughout the world, and as a result of these agreements, each country respects the copyrights of the others. Currently, a U.S. copyright is honored in 190 countries around the world.

For more information on registering your works with the US Copyright Office, click here.

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Sampling

By | Articles, Lessons, Music Publishing | No Comments

Sampling occurs when a portion of a prior recording is incorporated into a new composition. When a song is sampled without permission, copyright infringement of both the sound recording (usually owned by the record company) and the song (usually owned by the songwriter or publishing company) has occurred.

In order to legally use a sample, you will need to contact both the owner of the sound recording and the copyright owner of the underlying musical work for permission. License fees for sampling vary greatly and depends on the following:

  • how much of the sample you intend to use
  • the music you intend to sample
  • the intended use of the sample in your song

Licenses can be granted for free, for a percentage of the mechanical royalties (i.e., a couple cents for each record pressed), or for a flat fee. As there are no statutory rates for samples, the copyright owner can charge whatever he wants and does not have to let you use his work at all.

Using samples without permission can lead to you paying statutory damages to the copyright owner from $500-$100,000 per infringement, and a court can even make you to recall and destroy all of your infringing albums.

Do not rely on the “fair use” doctrine or the myth that you can use a certain number of seconds of someone’s song without penalty. Get permission.

– via entertainerlaw.com

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Public Domain

By | Lessons, Music Publishing | One Comment

A public domain work is a creative work that is not protected by copyright and which may be freely used by everyone. The reasons that the work is not protected include:

  • the term of copyright for the work has expired
  • the author failed to satisfy statutory formalities to perfect the copyright
  • the work is a work of the U.S. Government.

Things to note:

  • Be careful when using songs that appear to be public domain. Just because it’s old doesn’t mean it’s public domain.
  • An arrangement of a public domain song can be copyrighted. For example: the song “Rockin’ Robin” is in the public domain, but the arrangement made famous by Michael Jackson is under copyright.

The current status of a work’s copyright protection in the United States is as follows:

WORKS PUBLISHED 1922 & Prior:

These works are in the Public Domain.

WORKS PUBLISHED 1923-1963:

Work is under copyright when published with notice.

The original term is 28 years, which could be extended to a total of 95 years from publication (first renewal of 47 years w/an extension of 20 years, for a total renewal of 67 years). If not so renewed, or if published without notice, the work is now in public domain.

Under the 1909 Act, works published without notice went into the public domain upon publication. Works published without notice between January 1, 1978 and March 1, 1989 (the effective date of the Berne Convention Implementation Act) retained copyright only if efforts to correct the accidental omission of notice was made within five years, such as by placing notice on unsold copies. 17 U.S.C. § 405.

WORKS PUBLISHED 1964-1977:

Work is under copyright when published with notice.

Work enters the public domain 95 years after the publication of the work (Original term is 28 years, with an automatic renewal of 67 years)

WORKS PUBLISHED Before 1978 but not published:

Work enters the public domain 70 years after the death of the longest surviving member, or on 12/31/2002, whichever date is greater.

Protected from 1/1/1978, the effective date of the 1976 Act which eliminated common law copyright.

WORKS CREATED Before 1978 but published between 1978 & 2002:

Work enters the public domain 70 years after the death of the longest surviving member, or on 12/31/2047, whichever date is greater.

Protected from 1/1/1978, the effective date of the 1976 Act which eliminated common law copyright.

WORKS CREATED After January 1, 1978:

Work is under copyright when fixed in a tangible form (written, recorded, etc.)

Work enters the public domain 70 years after the death of the longest surviving author.

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Types Of Publishing Income

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Mechanical & DPD

A Mechanical License is required when a label wants to release a song on a CD. If they want to release the song digitally (i.e. iTunes, etc.), a Digital Phonorecord Delivery License (DPD) is required.

The royalty rate for this type of use (better known as the statutory rate) is set by the Library of Congress, and is currently:

  • $0.091 per song sold (for songs five minutes and under)
  • $0.0175 per minute (for songs over 5 minutes long), rounded to the next minute.
    Example: a song timing of 5:01 would round up to 6 minutes, resulting in a rate of $0.105 per song sold (6 x $0.0175)

Synchronization

A Synchronization License is required when a song is placed onto an audiovisual use (in a TV show, music video, movie, etc.). This is licensed and paid by the production company of the audiovisual use, usually in a lump sum. This payment is negotiable, depending on the songwriter’s bargaining power.

In a synchronization use, both the master copyright & the publishing copyright must be licensed, which means more money for those who self-publish & own their own masters.

Public Performance

When a song is broadcast in a public medium for public consumption (on the radio, in a commercial, at a concert, in a restaurant, etc.), Performance Royalties are generated.

These royalties are licensed & paid to Performance Rights Societies (PROs), who then pay the writers and the publishers. The PROs in the US are:

(NOTE: You can only be affiliated with one of them at a time.)

Print

Whenever your song is sold as in print form (lyrics, sheet music, etc.)

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Types Of Publishing Deals

By | Lessons, Music Business, Music Publishing | No Comments
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Standard Publishing Deal:

The songwriter is signed exclusively to a publisher for a time period, and is given an advance check against future royalties (the amount of which is negotiated & depends on the writer’s bargaining power). The publishing company then co-owns any songs you write during this period, takes care of the administration & exploitation of the catalog, and is entitled to the publisher’s share of the royalties.

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Co-Publishing Deal:

The songwriter and the publisher are co-owners of any songs written during the contract period. The songwriter collects the 50% writers share, and as “co-publisher”, splits the publisher share 50/50 with the publisher. In the end, the writer receives 75% of the income, and the publisher receives 25%.

admin

Administration Deal:

The songwriter licenses a selection of their self-published songs to an outside publisher (or independent administrator) for a time period. The publisher is responsible for handling the administration on behalf of the songwriter, and collects a fee of 10-20%. In this deal, the writer retains 100% of the copyright.

Other types of publishing deals include:

  • Single song agreement: the writer grants publishing rights for one or more songs to a music publisher.
  • Collection agreement: like an administration deal, except the publisher isn’t responsible for exploiting the copyrights. Usually handled by an accountant, attorney, or business manager, the “publisher” only collects royalties on behalf of the writer.
  • Purchase agreement: when one music publisher acquires the catalog of another publisher (whole or partial).
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What Is A Music Publisher?

By | Lessons, Music Business, Music Publishing | One Comment

A music publisher is a company responsible for exploiting the copyrights of its songwriters and composers. This means pitching music to to potential licensees (artists, labels, TV/Film executives, etc.), taking care of all licenses and other paperwork on behalf of the songwriter, and ensuring they receive payment when their compositions are used. In return, they are entitled to a piece of the revenue generated.

If you haven’t signed a publishing deal, YOU ARE YOUR PUBLISHER! If you feel like you can’t take on the task of exploiting and administering your song catalog, then you should look into getting a publishing deal.

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