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Transcript:
My name is Kamal Moo. I’m an attorney in Los Angeles and I’ve been an attorney for about six years. Most of that time I’ve also been an artist manager. A lot of my bands are on record labels so, you know it’s kind of a unique perspective as both a manager and a lawyer. The firm that I’m a partner in, we opened it up last year and we have a lot of music clients, film clients and, you know, a lot of times a lot of music clients come to me and ask just questions about copyright law, because they don’t understand it, and these are people who’ve been working in the business for years and years but they just don’t understand the basics of copyright law. So, you know, I thought it would be best to come, you know, to school and just tell people some basics so, as musicians, you’ll know when things (?)0:48 . So you can protect yourselves and won’t run into any problems later. The first thing– the one thing I tell every artist who comes to me is that the music industry, it exists because of copyright law. The music industry as we now it today exists mainly because people create music and own it. So the next question is, “What is a copyright?” A copyright is a type of protection that grants authors exclusive rights to the works they create. So that’s novels, paintings, photographs and, of course, music. Ideas cannot be copyrighted, only expressions of ideas. So if you have the greatest American novel in your head, you can’t copyright that, you have to write it down somewhere. Same thing with a song, you have to write it down or record it. And it’s also a type of property that can be sold, licensed, inherited, transferred– basically, it’s intellectual property, and so you can sell it or do whatever you want with it. Generally, a copyright lasts for the life of the author plus seventy years. So if I write a song today and I die in 2020, the copyright is good until 2090. So my heirs can, you know, benefit from that. So if I write the next ‘White Christmas’, my family would be good for a long time. Another question– I’m sorry?
Let’s say sixty-nine years comes up, can the family renew it?
No. There are some provisions to allow for renewal of a generally known and if, once it terminates, a copyright goes into– the work goes into the public domain so anyone can use it without permission. The contract expires at that point.
How about Happy Birthday?
Happy Birthday is an interesting case because that was written a long time ago, I think 1918 or something, so technically it would have expired by now; however, Mortor Chefhold (?)2:37 , which is a publisher, still owns– still claims copyright ownership to it. So rather than cross Mortor Chefhold, people just go get a license. It’s kind of iffy if it’s protected still and if the– before 1978– I mean, this is really going deep into it, but before 1978, the copyright law was completely different than it is now. So the life of the author plus seventy applies to works made after 1978. Before that, there was a real complicated calculation that, frankly, even I don’t understand, so it gets pretty heavy. So Happy Birthday goes back a long time, it’s under a different, you know, set of laws and iffy rights than today. A copyright law might exist once a work is created and registration with a copyright office does not require, but strongly recommend it. If you need to sue someone for infringing on your copyright, you need to register first. But under the law, once you write something down, it’s original, it’s yours, you have your copyright. But, you know, to take legal action, you must register. OK. So what rights do you get with a copyright? As the name would imply, you get the right to make copies of a work. The right to distribute copies of a work. The right to make derivative works– that is remixes, sequels (if you write a book, you can write a sequel to that book so you have a whole series of books), and the right to perform/display the work publicly (so if you make a painting, you control where it’s displayed in public– in a gallery, or whatever). So let me know if I’m going too fast, by the way, for anybody. So that brings us to music copyrights. There are two types of music copyrights that you can own. The first one is the musical composition. That’s the lyrics and the melody. So if you take a piece of staph paper and you write some lyrics and then write the notes down, that’s a composition, because you’re setting down how the melody’s supposed to go and what the lyrics are. The second kind of copyright is a sound recording copyright and that’s the actual audio recording that would– that would result. So for example, if you open up your computer and you sing into it and it creates and mp3 files, that mp3 file is a sound recording, you can have it copyrighted. Now these are two completely different copyrights and people really need to– you need to really understand the difference between these two. So this is the example I’ve developed to explain this to people. Now if a musical composition is like the blueprint to build the house, then the sound recording would be the finished house. I thought you’d like that. So the idea is that you can have one blueprint and build fifty houses from one blueprint and in the same way, you can have one musical composition and have fifty sound recordings made from that. So let’s say “Thriller”, by Michael Jackson, you know, he wrote “Thriller”, he wrote the lyrics and the melody and all of us went home right now and recorded a version of “Thriller” on our computers, we’d each have a sound recording that we would own and we would own the sound recording in, you know, that form. We’d own that copyright, but Michael Jackson would still own the musical composition because he’s the one that created it originally. So these are two different things and we have to really, you know, keep that in mind. And, you know, whenever a contract is put in front of you, a music contract, generally it’s going to address one of these two copyrights– musical compositions, sound recordings. So with that in mind, let’s talk about music publishers. A music publisher is a company that requires the rights to musical compositions. So what happens is a songwriter signs a music publishing deal to write songs exclusively for a publisher for a set amount of time. So for example, let’s say we have a songwriter named Bill and Bill’s a special songwriter and I’m a publisher and I go to him and I say, “Bill, you’re a great songwriter, but you should just stick to that. Let me handle the business for you.” So we’d sign a music publishing deal and I would take care of all the business side, all the business stuff, and he would take care of all the creative, you know, songwriting and, you know, also, some well-known music publishers are EMI, Mortor Chefhold, these are (?)6:35 music publishers. So I’m going to talk about a typical music publishing deal. So let’s say I go to Bill again and I make him an offer and this is what a typical music publishing deal would look like: the songwriter who wrote the song (and since he wrote it, he own’s 100% of the copyright of the musical composition) but he would assign ownership to me because, remember, it’s a type of property so he would sign a contract, whereby he would transfer all his rights in his composition into my name, so I’d be his publisher. In return, I would split all income I make from his compositions 50/50 with Bill. And sometimes if Bill’s really good, I’ll pay him in advance, which is just an amount of money up-front for him to– induce him to sign the deal. When I was in college, I interned at DMD Music Publishing and there was a really, really famous songwriter/producer at the time who got paid $4 million for his publishing as an advance. Those are very rare nowadays, but that’s kind of, you know, if you’ve the compositions to back it up then, you know, you can really make a good deal. And also there are various types of publishing deals, but this is the most common setup. There’s, you know, others called co-publishing deals and administration deals– I mean, basically, this is the kind of setup that you’re looking at if you’re going to be a songwriter. So for anyone who wants to be a songwriter/composer, this is what you’re going to have to, you know— yes?
What happens if it never (?)8:07 but your music publisher has to…
Right. Generally, it’s 50/50 net income and I’ll talk about that a little bit further in the record deal part, but I’ll get back to that. Yeah, it’s 50% of net income and I’ll explain later what that is. OK. So now that Bill’s assigned his compositions to me and I’m his publisher, how do I get money with his compositions? And the short answer is licensing. There are different ways to make money through renting licenses to people– remember, a copyright gives you the rights to, you know, make copies of the work, distribute the work, perform it publicly and make derivative copies– derivative types of the work. So people have to pay you for that right if they want to use that work. So I’m going to go through, really briefly, a few of the different licenses that publishers use to make money for– on big compositions. OK, first the mechanical license. A mechanical license is a license that allows the making and the selling of mechanical copies of a composition. That’s CDs, vinyl, digital downloads, etc. So for every– for every song that’s downloaded on iTunes, the songwriter and its publisher gets paid. And the standard royalty rate for that 9.1 cents for each unit sold. So let’s say you download– you sell a song on iTunes for 99 cents, 9.1 cents of that has to go to the songwriter and the publisher, which they would split 50/50, of course. Now this rate is set by the government; however, you can negotiate a lower rate. That’s called what’s called a controlled composition , which basically you’re paying a lower rate than that 9.1 cents so you can pay 75% of that. Also, there are what’s called compulsory mechanical licenses and that’s basically something in the law that says if anyone wants to do a cover song– a cover version of a song that’s already been released– you don’t have to have permission, you just have to give notice to that publisher that you’re going to do a cover version and you have to pay them 9.1 cents for every unit sold. So if all of us want to do a cover version of “Thriller” and go home and record it, we just have to send a letter to the publisher of “Thriller” and say, “I intend to do a cover version of this, I’m going to get a compulsory license from you.” And as long as you, every month, send them a check for 9.1 cents for every unit you sell, that’s perfectly fine. And that’s why there’s so many cover bands out there. The second way to make money from compositions are through performance royalties. This is income from public performances of musical compositions and that’s over radio, television, theaters, restaurants, colleges, basically any public place that music is played, they have to pay for the right to play that music. Yes?
If you’re not being paid to play that music, if there is no monetary transaction in the performance, do you still have to pay the royalty?
You mean if you’re like–
Do you still have to pay the licensing fees to the publisher? Like, let’s say I took “Thriller” to, I don’t know, an open mic night. Would I still– and I did it multiple times. Like, let’s say I did it five nights a week for a month, so…
Actually that’s– and that’s my next point, so thanks for asking that. Basically these performing royalties are– performance royalties– are collected by one of the three organizations in America: ASCA, BMI, and CSEC (?)11:27. And the reason is if you added up all the radio stations and all the TV stations and theaters and colleges all across the country, that’s hundred of thousands, if not millions, of different public places you can play music and, you know, I can’t go around to all these public– there are, like, a million venues and get licenses for bill, you know, because that would just take forever. So what I would do is go to one of these three organizations, which are non-profits, and I would say, “ASCA I want you to go on my behalf and issue these licenses to all these places and then collect royalties for me.” And what that does is– and how that works, basically, is ASCA would come to CalState Long Beach, they would walk around the campus and say, “OK, you have this many students, you have this many performance songs, you play this kind of music, so we’re going to give you, for a flat fee, a license,” what’s called a blanket license, “to play anything in repertoire that you want– any ASCA artists, any ASCA songwriter that we represent or publish with.” So what they would do is they would, you know, the venue would pay the license, the college would pay the license, and at the end of the quarter, ASCA would take all the money together and they would basically divide it amongst all the songwriters and publishers based on different formulas they have. So if the song is on the radio every five minutes, which happens sometimes, that songwriter would have a very nice cut of that pie. So I hope I answered your question. It’s not the song– it’s not the performer that pays, it’s the venue.
Oh, OK.
So CalState Long Beach pays a license fee to ASCA and BMI and CSEC, they have to get a license from all three, and they can play any of their, you know, songwriters that they represent– any of their music in, like, this room or out in the quad or whatever. So does that make sense everybody? OK. The next type of license is what’s called a synchronization license, aka a synch license. And I don’t know why they have it at H in music law, it should be c instead of ch, but I don’t know why, but that’s kind of the jargon, is the synch license. This is when you combine a musical composition with the moving picture. So it could be a movie, TV show, or a commercial. So for example, if a character sings Happy Birthday in a movie, you need a synch license. Or if the characters are driving down the street in a movie and something comes on the radio and you hear, in the audience, you need a synch license. There’s no standard fee for a synch license, so the sky’s the limit. That’s why you hardly ever hear a Beatles song in a movie, or a Prince song, because they have– they’ll ask for $1 million. Because I guess they want to protect their brand, or whatever, but there’s no standard for this license so definitely it can be, you know, this high.
Record, I may have misinterpreted this but music that’s written specifically for a film, there’s no licenses collected for the movie being shown in the movie theater?
Well, I mean, are you talking about, like, when the movie is shown and then the music is played in the movie?
Yeah, like, the original score?
That’s what– previously when I was talking about performance royalties, the theater would have to get a license from ASCA or BMI or CSEC because they are a venue that’s displaying theater.
They don’t do– BMI don’t pay for movie stars, theatrics in the US? Just outside of the US, as I understand, right?
I’m actually more familiar with ASCA than BMI, because I’ve dealt more with them.
Everything is the same, OK?
I have to be honest, I don’t deal with that type much, honestly, but I know that they have to get some kind of– basically, I know that they do have some kind of license they grant them, like whether it’s through ASCA… There is a performance rights regulation in America that does collect that kind of royalties and stuff like that. So what you’re paying for with this license is you’re paying for the right to synchronize the song with your movie and wherever it’s displayed, you’re going to need a separate performance license. That’s not going to concern the producer of the movie, if that makes any sense. And maybe to clarify a little bit, if you’re talking about like a score in the movie?
Yeah.
OK. The composer– that’s what’s called a work for hire and a producer of the movie would go to a composer and say, “I want you to write the score for my film. Sign this (?)15:32 .” And they’re going to sign all the rights to the producer. This is more if you have a pre-existing piece of music that you want in your movie. So if you have– if you want have “Thriller” in your movie, you’re going to have to get a synch license because it already exists apart from the movie. If it existed before the move, you’re going to have to go to the publisher to get his permission. If your commissioning a work from a composer for a score to be in a movie, you’re commissioning that work specifically for the movie, you’re paying him for the right for that, as a work for hire. So you’re going to– the producer will own that after the composer does it. OK– that– OK, is that good for now? OK and of course there’s a few other licenses such as theatrical production and musicals, this is what’s known as grand rights licensing so if you have a stage play that has some music in it, you’re going to have to get a grand rights license. And of course, sheet music and song books for everybody– you know, you have a songbook get sold, the songwriters get paid, the publishers get paid. And website (?)16:26 services. So I’m going to shift gears a little bit now–
Can I just get in real quick before you shift gears? On the synch licenses, if you were to get another band to do a cover and you want to, say, cover a Beatles song in your movie, you pay– you make the arrangement at the time and then do they then pay that money, that 1 cents…?
No, actually, that’s a good question. The 9.1 cents applies to selling, mainly, just copies of the song. So let’s say you’re making a CD and you’re selling a copy of a song that’s available for download from iTunes. A synch license applies strictly to synchronizing the motion picture with the song, itself. So there’e two separate rights.
Oh, OK.
So let’s say you’re producing a movie, you have to get a synch license– if you want to go ahead and also sell copies of it, you’d have to get a mechanical license because you’re using it in different ways.
But if you just cover a song and it sounds– it’s really a cover, it’s not just a re-do, I have to say there’s not really any difference, but do you still have to negotiate a synch license with whoever owns the rights to the Beatles song?
Yes.
OK.
Because the composition is always the same. Whatever form you put it in, whether you do a synch license and you put it in a movie, or someone does a cover– it’s still a musical composition, you have to get a license for it. It’s a different use and a different type of license, but it’s always going to be the same thing.
With a synch license, are there two parts to the licensing? To the license to composition and the recording as separate?
I was going to get that, actually, next, yeah.
OK, perfect. We ran into that… this record and a producer used a (?)18:04 song without permission.
Right.
Throughout the whole movie and they found out that this came up and then they had to take it out because it was more money than they had even thought it could be.
It’s surprising how many producers just don’t– they just don’t do it and they don’t think about it until after. But if we have to have this song and then the worst thing you can do is put out a movie that has unclear music in it, because if there’s no license for it you can get sued for a quite a bit of money, if you put it out without getting the proper permission. So definitely, it’s something that you need to look out for. And this is actually kind of– I’m going to talk a little bit about more movie stuff, too– I’m going to shift gears to sound recordings. So everything I just talked about was musical compositions. Now I’m talking about specifically sound recordings. Record labels are companies that produce and sometimes require sound recordings. And so a performer or band would sign a record deal to exclusively create sound recordings for that record label and, of course, some well-known record labels are Interscope, Atlantic and Epic and there’s many more. So you have to– you have to remember that a sound recording copyright is a piece of property and you can sell it to a record label or you can just sign a personal services agreement to say that, “Everything I sing is going to belong to you, record label.” And there’s different ways to make income with a sound recording. For example, (?)19:35 . So when iTunes sells that song for 99 cents, remember that, OK, let’s say 29 cents comes off the top and iTunes keeps that and 9.1 cents comes off the top to go to the songwriter who owns the composition. Whatever’s left, which is about– that’s 60 cents? That would belong to the record company. And also another way of making money through a sound recording is from my master use license and that’s what you spoke about earlier. When you go to license something, let’s say, to be in a movie– if you want the original Beatles song, you’re going to have to get a synch license for the composition to be synchronized with the film and you’re also, if you want use the original Beatles recording, you have to go their record company and get a master use license, so they’re two separate licenses– one for the composition, one for the sound recording. And, you know, people just do one and not the other for reasons I don’t understand, really, but they should do both, because if you’re going to use the original sound recording– but you can also hire a cover band, like you mentioned earlier. You know, you just get a synch license, but then you don’t want to pay the Beatles prices for their sound recording, so you put– you get your own band– you get Coldplay or somebody to come and do a– do their own version of it and they do a sound recording for you and they’ll be, cost, you know, save you a lot of money basically. Also– OK?
I was just wondering about altering the original track. If you have the sound recording and you alter it, like, how much do you have to alter it before it comes a different sound recording?
If you’re using any sound recording that someone else owns the copyright in, you really should get a license. It’s just, you know, even if you twisted it and do stuff to it, you still– they may not recognize it, but there are ways you can get in there, you know, there are experts out there that can do some forensic stuff… Like CSI for sound recordings. And they can find it.
So if you did get a cover band to record an original song, you’d obviously need a license for, would you need a master use for that cover, even though it’s specifically recorded for your movie?
It depends. If you’re– if you as a producer are paying for it and paying them to record it for you, you’d probably, you know, you’d own the official sound recording. Now if they’re signed to a record label already and they’re making recordings exclusively for another label, you’re going to have to do a deal with them to make sure that you’re not running afoul of their contract. So basically, you know, the number one rule is investigate. Sound recordings, compositions– if you want to use it in a movie, if you want to use it in any way, investigate who owns them, because you’re going to have to get a license for them, otherwise you can get sued. And copyright infringement is– can get expensive. Also master recordings or sound recordings also have– you can get other income from streaming online through the Spotify, Pandora.. It’s not nearly as much as, like, radio play, but it’s something. And also, as you know, sound recordings have fewer ways of generating income as compared to compositions. There are just way more ways to license a composition than there is to get a sound recording– than there is to license a sound recording. The next point I wanted to go over is if you’re ever offered a record deal, these are the points you really need to look out for. I don’t know if any (?)22:48 in here, but hopefully, you know, for a record deal, you know, there’s a few things you should do. Well, number one, you should call me and I will help you go over it and tell you what’s in there, but failing that, you should do the following: you should ask how long the term is, and that’s how many albums do you owe to the record company. Sometimes the contracts are two years, three years, but generally it’s by album. So it’s in your best interest to get as small number of albums as possible, maybe two or three. I’ve seen seven albums in a contract which, you don’t get stuck in a contract that long and, just a side note, too, an album– a generally accepted length for an album is thirty-five minutes. So the idea is you’re going to record– each album’s going to be about thirty-five minutes long and that’s about ten tracks, basically. Next is what is a royalty rate and how is it calculated? This is basically, for every record they sell, you know, you’re going to get a back-end royalty rate on it. So it’s in between 7% and 50%, it really depends on your leverage. And also how it’s calculated is a really important question to ask because back in the old days, they had what’s called ‘breakage’, so if they shipped of vinyl records, 10% of them got broken (?)24:05 , they’ll pay you 90% on the 90% that actually made it. So we’re going to lower the amount that got paid. Some record deals I see still have that amount for breakage even though stuff is digital now. Like, what’s going to break on iTunes? It doesn’t make any sense. So people have to be aware of this, they’re going to find any way the can to give you less money. So you have to think, like, “OK, how much is going to come out for free goods, breakage, promotional goods,” all that, so they’re going to find a way to reduce your royalty rate. And the thing is too, like, back to the royalty rate thing for a second, a 50% royalty rate– but I’ve seen bands that go, “Oh, we got a 50% royalty rate,” but then they run up all these expenses and say, “Oh no, we’ve brought in $100,000 but we’ve got a list of expenses, so here are your $2,000.” Because they have a weird way of calculating how much they’re going to pay you and so that’s really something to look out for. Another question is is there an advance? Meaning, are they going to give you some money up front to sign this deal? $100,000? $500,000? And, you know, the fees all becoming smaller and smaller these days because record deals aren’t what they used to be, really. And also, are there are any 360 deal terms in the contract? Now a 360 deal is something relatively new. Back, a long time ago, in the 70’s, 80’s, 90’s, you could sell ten million records and that’s how record companies made their money, was sale of CDs and, you know, basically the CDs– they made a lot of money doing that. But ever since, after Napster came along, all the file sharing, people, you know, the record sales have been hurt. So what record companies will do now is when you sign to Interscope Records, they just don’t want a regular record deal, they’re going to want a piece of everything you do. So a 360 deal would include– like if you were in a movie, they get a piece of income from the movie; if you– when you go on tour, they can take a piece of your tour income; some of your merchandising income– they’re going to take a little bit of everything. This may sound terrible and sometimes it is, but one of hte bands I actually managed had a 360 deal and the one good thing about it was that the label was always there for us. Meaning if we were on tour and needed help, they would help us. Or if we needed more merchandise, they would help us more than they would their other bands because they had more of a stake in our success. So it’s kind of– it’s good and bad. It’s bad because you’re giving up more, but it’s good, in a way, because you’re getting more from the label usually. And it depends on how nice your record label is, too, which, some are not very nice, so…. to say the least. OK, the last topic I’m going to talk about now are managers versus agents. A lot of people come to me and say, “What is the difference between a manager and an agent?” And this is really something important that anybody in the music business should know. OK. Agents, in California, agents are the only people allowed to procure employment for artists and in music, that basically means booking shows and appearances. And procure, of course, just means going out and looking for gigs for the musician. An agent must be licensed by the state, so they have to go through a whole application process and post and bond and all these things, and also an agent usually makes 10% of all the deals they find/negotiate for an artist. Now a manager, on the other hand, a manager is more of an adviser to the artist and supervisor to the development of the artist’s career and takes care of logistical issues. So– and I can tell you from being a manager, what this means basically is you just have to do whatever it takes to keep the trade running. I mean, if you’ve got– you book– you book, like, flights for everybody, you make sure you get paid your royalties you’re supposed to get paid, you make sure things run on time. If the artist’s girlfriend dumps him, you’ve got to talk to him and say, “Hey, you’ve got to do this show and now stop crying, please.” It’s whatever you have to do, basically a manager is a catch-all. He does whatever it takes to– and it’s– it takes a certain kind of personality to be a manager, which I do not have one. That’s why I do the law more than the managing. I have one artist I still manage who, actually, is great to work with, but generally it’s pretty difficult because a lot of egos get involved and everything. There’s no licensing required for managers and mangers cannot procure employment like agents can, but they can– the one exception is they can find and negotiate a record deal on behalf of the artist. And usually a manager is paid 15% of the artist’s income. Now sometimes a manager will charge more, like 20-25%, but if they’re asking for more than 15%, you really should find out if they’re worth it and do your homework and see if they– I had a client recently who, they signed a management deal for 20% in September and in December he came back to me knowing how he could void the contract and then the contract was, like, 18 months and I said, “You’re just, like two months into this thing,” and he said, “No, I can’t work with this guy.” And I said, “Well you should have,” you know, “you should have thought of that before you signed the contract for 18 months.” And I told him what was in there, but it was kind of, you know, it’s definitely– you’ve got to investigate your managers before you sign with them and see if they’re worth the money. And supposedly Elvis’ manager took 50% of his income, so the sky’s the limit, I guess. I take 15% because I’m manageable, but.. . Now I just wanted to talk briefly about music, the music business and where I see it going. One thing I noticed is that a lot of non-entertainment companies have been starting entertainment divisions. Like Red Bull, Mountain Dew– they have record labels. And I actually have a potential client who I’ve been talking to who, he actually owns an export company and they export agricultural goods like grapes and stuff to China and to different parts of Asia because they don’t– the people there will pay a premium for California grapes. So he wants to start a wine company and he wants to start, basically, a small record label to help him with the wine company. And it’s a great idea because Red Bull, Mountain Dew…. like, wine companies– they’re main product is, you know, a drink. You know, they’re not trying to make money from records and if their record label takes a loss one year, then they don’t really care as much because they’re making money from their sodas and everything. So that’s a– it’s a great idea. I don’t know how it’s really going to play out, it’s pretty new, but if it, you know, it makes sense, given today’s, you know, the economy and the way the entertainment business is going, in general. Also, there’s the importance of live touring and merchandising. My brother’s band, for example, was signed to an independent record label and we did pretty well on record sales and, you know, they got some royalty checks, but the bulk of their income was from touring and t-shirts. It’s amazing how much you can make, you know, selling t-shirts for Warped Tour– it’s incredible. So that’s definitely something, you know, if anyone here is a musician, think about how you can merchandise your brand in a unique way. My client, who is a hip hop violinist, he wears, like, he wears like a black hat and a black hip hop shirt so we’re going to stat branding the hat and the shirt and start selling that with his name on it because it just makes sense. And, you know, you can’t download a hat, so it’s kind of… it’s kind of nice because you can– you can do a show and you can sell merchandise with people who can’t (?)31:16 I mean, really, in a significant way. So definitely that’s something to do. And the future of recorded music is a little bit cloudy to me. Some people think that, you know, music will be, sort of, the toy in the happy meal in the future and something that you kind of use to sell other things and just like the Red Bull and Mountain Dew– they’re using music as a vehicle to sell their drinks, they’re not using it to sell the music itself. That’s not to say the quality’s bad, because some of the artists on Mountain Dew’s record label actually are legitimate good artists. I mean, they’re indie artists that they picked up and if, like, a certain brand, like the wine company I was talking about, if they can find the right artist to kind of fit with their brand, it would just make a lot of sense. So… Final thoughts. I mean, I think it’s kind of– it’s both scary, but it’s also kind of exciting in the way the music industry, you know, in the way it’s headed right now. I mean, there’s a lot of things that are unsure, but there’s a lot of opportunity out there. I mean, if you told someone ten years ago a ringtone would go platinum, they would laugh in your face. Because who knew that you could sell, like, a million copies of a ringtone? Or that you, you know, you could license things to a website– there’s all these different ways to kind of– or who knew that, you know, if Kim Kardashian tweets something, she’d get paid $100,000. I mean, it’s– there’s different ways to make money now and it’s a chain-link dynamic but you don’t really– I mean, no one really knows where it’s headed. I mean, anyone who tells you otherwise really, you know, doesn’t know what they’re talking about because it’s really surprising. I mean, I’m constantly amazed with some of the deals that come to me that I negotiate and I was like, “I never thought of it that way, but you know… why not?” So that’s kind of all I have and it’s a– yeah?
There’s a couple of bills pending in congress right now, I can’t remember the acronyms for them, but…
SOPA?
Yes.
Yeah.
Could you comment on those?
From what I understand, and I’ve read a few articles about it, which is the Stop Online Piracy Act– they’re kind of, some of the measures that they’re proposing are very harsh and they’re kind of draconian in a way and so there’s a lot of companies who are against it, like Google and Apple and, you know, Wikipedia and stuff because if that bill passes, basically, the government can shut down any website for any– you know, any kind of trivial copyright violation. It’s a little too heavy-handed and that’s why it’s got a lot of stir going. I personally agree with a lot of those companies, I think it’s a little too heavy-handed, but the thing is with so much piracy going on, people are– Congress is deadest to find a solution and I don’t blame them. I mean, but I think they’re overdoing it a little bit because it’s going to be just too much burden on websites to… they’re not going to cooperate. So yeah.
I was curious about sampling, like if you’re doing DJing or remixes or thinks like– or even if you make it original but you use samples from existing recordings… if there’s like a definite limitation of how much of the original portion you can take?
Some people try and use the fair use argument– fair use a defense to copyright infringement and there’s criteria for that. Now as a lawyer, I can’t tell you– you can use two seconds or five seconds or whatever, because it’s just– like, if you– then it becomes ind of an abstract debate about what constitutes a song and what’s recognizable and this… So it’s really, it’s really, you know, it’s a good idea to get a license no matter what. Now there are plenty of records out there that use samples that are unclear. It happens. I mean, I know it happens. I would never advise my client to not clear something, but if they do, I mean, if they don’t get caught, I mean, good for them, but I can’t really say– but I can’t really say– so I can’t tell you to (?)34:59 or not but you could, you know, get a license (?)35:04 that you don’t own the rights to. Yeah?
I just read an article saying there’s companies out there that will specifically listen to people who sample to see if maybe they want to know if they can get money as well.
Yeah, it’s definitely– you can get into a lot of trouble if you don’t get the right clearances. I mean, there is the rapper Notorious B.I.G. who released an album in 1994– a bunch of uncleared samples on that and then eventually they released a new version in 2005 with all the samples removed, but who cares by then, you know? So it’s really– you can roll the dice, but I wouldn’t recommend it. But I don’t like risk so… that’s why I wanted to be an attorney.
If you have an agent, or if an artist has an agent, are they– are they allowed to procure their own employment, in addition to the agent finding employment for them? Or are they restricted to the employment found by the agent?
You can go out and find your own employment, but if you can’t find someone– employment through someone else, with an artist, (?)36:07 unless they’re licensed as an agent. Now, does it happen like– managers all the time will go out looking for employment. I can tell you that from practical experience. And you’re not supposed to but it happens and a lot of times managers will take it up to that point and then the agent will take over once they’re actually talking about the deal. If anyone watches the show Entourage, you’ll know that, like, Vince Chase who is the star– who is the movie star, he has an agent an a manager and they’re always kind of duking, trying to get the deals and everything, but at the end of the day the agent has to do– actually has to do the finished deal for it to be legal, basically. OK.
With concert dance, I know we have to do grand rights, but also do we have to do recording rights? Because we’ve had huge issues here in the dance department with– a couple colleges in the past have gotten in some legal trouble by using certain recordings and the grand right, I guess, and what they cover under campus and educational blanket is very fuzzy. So, just, we’d like to know…
With grand rights, that applies strictly to the composition. If you’re going to use the actual, original recording, sound recording, in your show, you really should get a master use license, or it is just a good idea. I mean, some people get away with it, but I mean, just like anything else, I would recommend– any time you’re using anybody’s work as your own, you know, you should– actually, the funny thing is– I’ll tell you a quick story. This morning I got a call from this television company that’s producing a show, it’s like a legal drama, and they had this plot line and they were asking me their opinion on it. Like, so we have this guy, a songwriter, and his girlfriend left an angry message on his answering machine. He used it in a song and the song became a huge hit, so what could she sue him for. And I was like, “Well, I mean, she could try and make an argument that the message you left on the machine was spoken word poetry and then…” Eff you, eff you– you know. And then, so the idea is that and then he used it in his composition– theoretically, they could make an argument and say, “Oh, it’s my poem I’m leaving on the machine, so I own the rights to it.” Also it can use her actual voice that she made on a recording– that’s another use without her permission. So, you know, that– my point being that, like, in that case, it’s the same thing. If you’re using anybody’s recording or composition in any way, you should really get permission for it. Sure?
At what point would you say a band should look for an agent or a manager in their development?
Honestly, they will come looking for you once you have some success. It’s a weird thing because– don’t get (?)38:47 I need a manager to get to the record labels or to get a tour or whatever, but really, they’re kind of– I hate to say it, even though I’m a manager, I can say they’re kind of jerks. So, like, they’ll come looking for you once there’s– they’ve smelled some success on you, you know? So if you start to get some buzz going online, you’ve got a few million hits on YouTube and you’re doing some shows, people are coming out to your shows, you’re going to start getting some inquiries about that. So I mean, and also, you really only need a manager when there’s something to manage. Meaning, like, you have things going on; you have, you know, this record label who wants to come and talk to you or there’s people who want to put you on tour– then you’re going to need someone to negotiate on your behalf, because I don’t recommend bands doing business on their own behalves. It’s hard to be the person who’s doing the deal and be the person who’s signing the deal. It’s just– you’ve got to get a lawyer or an agent or a manager– somebody who can really just operate on your behalf, because it’s definitely, you know– there’s an old saying that only a fool– the lawyer who represents himself has a fool for a client, basically– that’s what it is. It’s true. You would never represent yourself in any kind of negotiation. Yes?
What about churches as venues? You know, if they have to do a performance or something for a Sunday service, do they have to have– I forgot what it’s called…
The blanket license for mass or what not? Yes, they have to get that.
They have to get that just as well?
Any public place that plays music has to get a blanket license. So if you’re going to Universal City Block, they play music there, you’ve got to get a license.
What kind of music could they perform without having a license like that?
Something that does… maybe something that like, the CEO’s daughter made that isn’t a member of ASCA. I mean, like, because basically, like, when ASCA and EMI and CSEC, they kind of have the monopoly on that– you have to…
Right, so something that the composer wrote and is performing– you know, the performer is the composer. That you wouldn’t have to, there’d be no one to go after you, right?
Theoretically, no. But realistically, like, you’re going to have to get an ASCA license anyway.
Or music that is copyrighted for the print, so you purchase the book of the music. If there’s no copyright on the recording or the sound of it, then you can perform it anywhere, right?
Yeah, I mean, if something is in the public domain– let’s say it’s a really old song–
But even if it’s not public domain, like, you know, Eric Hopeland’s not public domain.
Right.
You know, if a church doesn’t have that blanket license and you bought the book of his piano sonata and you perform it in a church, who’s in violation?
Well, I mean, I remember a story from way back where I guess some venue had let their ASCA license lapse, or whatever, and then there was a sign up saying, telling some musician, like Robert Plante or something, “Don’t play any ASCA songs”, but he did anyway. I mean, there’s really– I mean, yes, you could theoretically get sued, but I mean it’s, you know, a venue would most likely shut down if they couldn’t get their ASCA license. Because, you know, you get in trouble and any public venue that plays music, they have to get a ASCA license, BMI license, CSEC license, they just have to. I mean, to operate, it’s like a normal business expense. A restaurant, if it’s going to play music, they have to get a license, they have to get a blanket license.
OK. And the reason I just wondered because I just can’t imagine how many churches there are that have a music director that doesn’t know anything about that and just goes and picks music that they like to play for the service on Sunday morning.
That wouldn’t even really be the responsibility of the music director, so much as the church, like the CEO– or whoever would run a church. The head pastor? Yes?
That happened. We were at the job or somewhere, was an ASCA member. and the church would send them a bill and it wasn’t much, it was, like, $35, and the members would pay the fee and then the year goes up. But they could play anything from ASCA but it was just four people playing this one tune.
Yeah, yeah. There was a story–
And it wasn’t original.
Right and there was a story about some famous record executive opened a restaurant and he had music in there and some guy from ASCA came asking him for money and he thought it was like the mafia coming to shake him down. Like, “Oh yeah, you gotta pay us the money for those songs.” He was like, “What? For songs? Really?” And that’s kind of, you know, people don’t realize, like, if you’re going to do a club or a bar– anything that plays music– you’ve got to get these licenses. I mean, that’s just a must. Yes?
This is kind of off here, but OK, you know people– OK, the church thing kind of made me think about, you know, there’s lighting surfaces and a lot of times there”ll be coffee with music and you’ll be like, “Oh, that’s our song and I walk down the aisle,” or whatever. What about, like, if they got married in a park or just, like, some random place like that where they wouldn’t have a public license like that, what would be– or on the beach or something. Would they– if an ASCA member walked by, would they be, like, “You’re using our song”?
If weddings are allowed to be in that park, that park probably has an ASCA license.
Oh it would?
Yeah. I mean, if they’re going to allow anybody to do any kind of event in a place, you have to get it. I mean, the only time ASCA doesn’t apply is if you play music in your home. I mean, you don’t need a license for there, obviously, but if you’re playing anywhere public, if you’re going to get a venue that’s renting it out to weddings and bar mitzvahs and birthday parties, you’re going to have to get a license because you’re going to be in trouble. Yeah?
How much are those usually? Is it like a monthly thing? A monthly payment?
It depends and, you know, ASCA and BMI and CSEC– they issue licenses to, you know, radio stations, tv stations, everywhere, basically. It really depends on the size of your audience. So a small–
If it’s like a club, like, or a venue?
It depends on, like, how– like they– where the club is, what city it’s in, how much traffic they have, what kind of music they’re planning on playing– it’s a lot of different factors. Like I said, CalState Long Beach I’m sure has an ASCA license, they have to have one. So they would look at the student population, how big it is, what kind of concerts you have coming through, how often and so forth and then they’d ind of give a quote based on that and, you know, it’s a pretty– ASCA and BMI and CSEC are huge operations. I mean, they have a lot of different things going on so they have the resources to go out there and negotiate with everybody, it’s pretty intensive, so you know…
I would just say, if you have tracks that you upload to something like or like Sound Cloud, is it– could it be independent between those websites what type of agreement there is for, like, because then they’re just– you’re essentially just using it like it’s a publishing union, right? So do they– can they potentially claim ownership over the music you’re distributing through…
No. Those websites, generally, if you read the terms of use, they’ll say, “All the intellectual property belongs to you,” so they’re just giving you a venue to– a place to put your music out there for people to hear, but they’re not, like, they’re not claiming ownership usually. So it’s just, you know, it’s not– you don’t have to worry about your rights, usually, with those type. Now, I’d have to read the terms of use, but I’ve never heard of a website trying to take– because then no one would use it, you know? So… It’s– that’s kind of the way it goes.
Do you know– does Sound Exchange collect royalties for websites like that? Like Sound Cloud?
Actually yeah and going back to the sound recording things, sound recordings do have limited royalties that are paid on digital streaming. So Spotify, Pandora, etc. Sound Exchange collects those on their behalf. It’s kind of like the ASCA for musical– for sound recordings.
Right, but even like– even Sound Cloud and things like that, more– things that aren’t as– yeah, I guess Spotify, they use the license, but even– but even like Sound Cloud, if you just upload a song– like you could technically collect a royalty for your sound being played by somebody else… do you know what I mean?
Technically, but I mean, it’s not…
It’s not going to be an issue…
Yeah, I mean, OK. I’ve gotten royalty checks before for 1 cent on behalf of the bands that are like… The things is it costs more to mail it to me than actually what’s there but they have to mail it anyways. So it’s– it may be like 1/100th of a cent but… good times. Good times roll. Yeah?
Digital Rights Management
What’s going on with right now in the music industry? Because it’s a good concept, but I know a lot of people aren’t really too happy about it…
DRM — DRM is Digital Rights Management, which is kind of– back in the old days of, like, iTunes, you had to have an authorized computer to play it, so you had to authorize your iTunes to play DRM-protected material and actually I think they did away with that, didn’t they? On Apple? Like, so it’s just a straight-up… I know that Steve Jobs made a big thing against that, the record companies made him put it on there. It’s kind of like people just want to own music and then I think they realized that the DRM was kind of self-defeating in the long-run. People want to have the music unrestricted, do what they want with it, which is a good example. Because it’s good because it’s theirs, but it’s bad because they could put it out on a college server. I personally think DRM doesn’t really make a lot of sense because there’s a lot of ways to get music that, you know, to get around the DRM The whole way with Apple and iTunes was you just burn a CD and then re-rip it into an mp3 and then the DRM would be gone. That was the old way of doing it, so there’s definitely ways around it, so I don’t really think it’s really worth it to try and go through that trouble. Yeah?
YouTube Licensing
What about YouTube? Do they have to play some type of one-hit license for everything that gets uploaded there?
That’s a different story because it’s not a public performance, per say. Like, it’s not like a venue, like this. Now they do have deals in place with people for profit-sharing and, you know, you do grant them the right to, like– it’s not like what you were saying about hosting your stuff, they’re not taking, you know, an ownership interest in it and you can’t but, you know, a lot of it is like no one puts this stuff on YouTube expecting to make money off of it. That’s just the way they kind of display their work. And, you know, like I said, if somebody, like, Rebecca Black has “Friday” and she makes– she has, like, fifty million views, I mean… YouTube will definitely have a profit-sharing agreement with her because there’s so much money there and, you know, why not? Make sense? Yes?
There’s tons of copyrights and stuff going off on YouTube that the labels are having them take it down at one point or another, so are they paying anything to ASCA or BMI that is a blanket that would help cover that at all, or have the labels basically accepted that in some sort of way? Or…?
It’s weird, because, like, it’s a tricky area because then you’re like, “OK, does ASCA and BMI really– does it count as something they would cover?” You know? Meaning, like, the venue. They cover physical venues, like this. Do they cover ASCA? I mean, does SCA cover YouTube and those kind of things? Does it count as a venue, per say? As far as I know– I mean.. I don’t think that they really do much with them. I mean, I’d have to really look into it more, honestly.
They’re not selling right?
No, because, I mean, it’s not like– it’s weird, because, like, Spotify is, it’s identity is, a streaming service like a radio station– they’re in business for that. YouTube– anybody, like, “I lit my hair on fire, let me put it on YouTube,” you know? It’s not really there for, like, distributing music, per say, it’s for just anybody that puts things up. And of course, if there’s ever a violation, they’ll take it down, but yeah.
But there’s tons of stuff out there that is a violation, but no one’s taking it down.
Because there’s so much to find, you know? Like, it’s pretty difficult.
I was just going to say that a lot of times what you see with copyrighted material is it’s just explicitly the song or the piece of music and what they’ve done– they’ve added advertisements to it in some way, but they’ll also often have a link to where you can purchase the file legitimately.
Right.
So this is more of a– they’ve turned these into sort of demos or exposes for the tracks, themselves, and so if you want the high-quality version, here’s a link to buy it.
And, you know, that’s kind of– like I said, it’s about the future, about where it’s headed, because is that a viable way to make money? I mean, maybe. I mean, it’s pretty new and I couldn’t tell you. This thing changes, yearly. Honestly. Like, just the way people distribute their music and, you know, get paid royalties and stuff, it’s… Yeah?
Changes in Copyright Law
As a lawyer, how often is the law changing on you to keep up with?
Copyright law is pretty much, I mean, it doesn’t change a whole lot, honestly. But it’s just ways of dealing with copyright law changing. I mean, like I said, the 360 deal– that’s a whole new thing that just didn’t exist six years ago or seven years ago. So there’s all kinds of– or even these deals with the beverage companies. I mean, those deals didn’t exist a long time ago. So it’s just– copyright law doesn’t change so much as the contracts you enter into and a lot of my– the challenge for me is kind of finding new ways to put together deals that make sense for everybody. And it’s fun but it’s frustrating sometimes…
If you were hired to compose music for a film and you created physical recordings of the music that was going to be in the film prior to the production of the film, would you then own the rights to the original music, rather than the company that hired you owning the rights to the music?
It depends on the contract you sign.
OK.
And I’ll give you a quick run-down of like– let’s say, for example, you and I write a song together. The default view of the law is that we own it 50/50. So the same way that if I’m a movie company and you’re a composer and if I don’t have you sign anything that assigns all your work to me, we’re going to own it 50/50. So it really depends on the nature of the deal you sign and it’s negotiable. You know, if you say, “I want to retain a certain amount of ownership of the composition,” or whatever, of the composition, the sound recording– you can try to negotiate that. They might tell you to get lost, but it’s something you could ask for and, but like I said, that’s what they do. Whenever you collaborate with someone on a song, if you write a composition, you should have something written down that clearly delineates who owns what. And then I own this much percentage and you own that much percentage. Because it gets kind of messy because they’ll say, “Oh, I wrote 90% of this, you wrote 10% so you deserve this much.” And then you could say, “Well, under the law I own 50% so you can,” you know, “good luck with that argument.” So that’s… *applause”
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