Constructing a successful and sustainable career in the music industry is very similar to building an empire. An artist must establish a home base, gather his strength, and send out efforts until his influence expands – controlling more and more territory and conquering the hearts and minds of more people. However, it is equally important to build strong defenses to protect the assets that the artist’s empire is built upon. Specifically, a musician has to protect himself and his music if he wants to succeed in the music business.
Many different bricks go into building the foundation of a musician’s defenses, such as limiting his liability (LLC), securing his art (copyright), and establishing sources of revenue that announce his existence to the world (royalties and registrations). One of the most important pieces of this protection is the ability to protect the musician’s look and his brand or image. This image includes the musician’s name, both individually and the band’s name, his voice, and even the way he dresses on stage. Such protection is accomplished through a trademark.
What is a Trademark?
Under United States law, a trademark is a word, symbol, or device, used in commerce, which identifies the source of a good or service. As previously mentioned, this word, symbol, or device, can be your name, a logo, of even a particular look or display that is uniquely you own – i.e. your identifier. Most often this identifier is a musician’s band name and logo. When people see the identifier associated with a song or painting, they know exactly who made that particular piece of art. However, it is not enough to just think of a clever name or logo, but a musician must actually publically that name or logo it in a commercial manner before any trademark rights exist. This “use” can be playing a live gig under the band name or offering merchandise with the name and/or logo on it for sale. The band name is known as a service mark and the logo can be protected by both trademark and copyright law.
Much like copyrights, trademarks do not necessarily require registration. Trademark rights are established the first time the name or logo is used to sell something – the commercial use. Using “TM” next to the name or logo indicates that someone is claiming the trademark rights in an identifier but has not yet registered the trademark with the government. Once a band name or logo is registered with the government, the artist can use ® next to the name or logo. Notably, registering your trademark has several benefits: 1.) it announces to the world that someone has a right to that particular name or logo; 2.) it establishes a specific date when you acquired the rights in that name or logo; and 3.) it allows you to recover money and other remedies that are not always available without registration, such as filing a lawsuit in Federal Court. Often, just the threat of a lawsuit is enough to deter other bands from using your name or logo.
What is the Point of Trademarks?
Now, you should have an idea of what a trademark is, but the importance of a trademark is where things get interesting. If you hold a trademark in a name or logo, no one else can use that name or logo, with very few exceptions. Also, a trademark is a piece of property (intellectual property to be precise) that can be owned, bought, sold, or licensed. Musicians can even sell or rent the right to use their trademark for a specific geographic area. However, the place to start is choosing a name or logo that is not already owned by someone else.
For instance, a newly organized St. Louis rock band wants to pick a strong name that tells the public they love rock and Greek mythology. The group quickly picks “Minotaur.” However, before printing flyers, starting a website, or getting any new tattoos, the band realizes they need to make sure that no one else has a trademark in the name “Minotaur.” Otherwise, they run the risk of infringing that person’s trademark rights and open themselves up to a major lawsuit. The first place they check is the United States Patent and Trademark Office (www.uspto.gov), which reveals 30 different registered trademark records for the word “minotaur.” These registrations range from upholstery companies to engine parts. Next, the group checks Google (www.google.com), performing rights organizations (www.ascap.com – www.bmi.com), internet domains (www.internic.net), and any other source they can find where bands would list themselves.
Since there are so many people using the name “Minotaur,” the band consults with an entertainment attorney who helps them perform a comprehensive search and analyzes the options. He stresses that a band name cannot infringe another trademark but it also cannot infringe someone else’s copyrights. After careful review, the group decides to use “Minotaur” in a stylized format to make them stand out. They put the new logo and band name on their website, t-shirts, and file a formal registration with both the State of Missouri and the federal government Now Minotaur should be adequately protected, and the band can rest easy that one else can simply steal their band name without serious repercussions. In order to maintain exclusive rights in that name, Minotaur only needs to keep using the name when they sell their services or merchandise. Notably, if a musician does not use the trademark in commerce for 3 years, he loses his rights in that trademark, as it is considered abandoned.
Obtaining a trademark and using it to protect your music is a fairly simply process. However, much like any other area of music law, spending a little time and effort up front can save an endless amount of headaches and lost profits down the road. Trademark infringement leads to lengthy and expensive litigation, and “I didn’t know I couldn’t do that” is not a defense. If an artist is willing to take the take and put in the effort to understand the laws that affect his craft, then he can successfully build a sold protective wall around his music. Such protection forms the foundation of a long, sustainable career in a very chaotic and constantly changing industry. Everything starts with a song, but you must protect and nurture that song in order for it to grow.
Matthew T. Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at Nagel@wuestlingandjames.com.
* Articles are primarily educational and do not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
Tuesday, December 8, 2009
Trademarks - Protecting the Empire
Constructing a successful and sustainable career in the music industry is very similar to building an empire. An artist must establish a home base, gather his strength, and send out efforts until his influence expands – controlling more and more territory and conquering the hearts and minds of more people. However, it is equally important to build strong defenses to protect the assets that the artist’s empire is built upon. Specifically, a musician has to protect himself and his music if he wants to succeed in the music business.
Many different bricks go into building the foundation of a musician’s defenses, such as limiting his liability (LLC), securing his art (copyright), and establishing sources of revenue that announce his existence to the world (royalties and registrations). One of the most important pieces of this protection is the ability to protect the musician’s look and his brand or image. This image includes the musician’s name, both individually and the band’s name, his voice, and even the way he dresses on stage. Such protection is accomplished through a trademark.
What is a Trademark?
Under United States law, a trademark is a word, symbol, or device, used in commerce, which identifies the source of a good or service. As previously mentioned, this word, symbol, or device, can be your name, a logo, of even a particular look or display that is uniquely you own – i.e. your identifier. Most often this identifier is a musician’s band name and logo. When people see the identifier associated with a song or painting, they know exactly who made that particular piece of art. However, it is not enough to just think of a clever name or logo, but a musician must actually publically that name or logo it in a commercial manner before any trademark rights exist. This “use” can be playing a live gig under the band name or offering merchandise with the name and/or logo on it for sale. The band name is known as a service mark and the logo can be protected by both trademark and copyright law.
Much like copyrights, trademarks do not necessarily require registration. Trademark rights are established the first time the name or logo is used to sell something – the commercial use. Using “TM” next to the name or logo indicates that someone is claiming the trademark rights in an identifier but has not yet registered the trademark with the government. Once a band name or logo is registered with the government, the artist can use ® next to the name or logo. Notably, registering your trademark has several benefits: 1.) it announces to the world that someone has a right to that particular name or logo; 2.) it establishes a specific date when you acquired the rights in that name or logo; and 3.) it allows you to recover money and other remedies that are not always available without registration, such as filing a lawsuit in Federal Court. Often, just the threat of a lawsuit is enough to deter other bands from using your name or logo.
What is the Point of Trademarks?
Now, you should have an idea of what a trademark is, but the importance of a trademark is where things get interesting. If you hold a trademark in a name or logo, no one else can use that name or logo, with very few exceptions. Also, a trademark is a piece of property (intellectual property to be precise) that can be owned, bought, sold, or licensed. Musicians can even sell or rent the right to use their trademark for a specific geographic area. However, the place to start is choosing a name or logo that is not already owned by someone else.
For instance, a newly organized St. Louis rock band wants to pick a strong name that tells the public they love rock and Greek mythology. The group quickly picks “Minotaur.” However, before printing flyers, starting a website, or getting any new tattoos, the band realizes they need to make sure that no one else has a trademark in the name “Minotaur.” Otherwise, they run the risk of infringing that person’s trademark rights and open themselves up to a major lawsuit. The first place they check is the United States Patent and Trademark Office (www.uspto.gov), which reveals 30 different registered trademark records for the word “minotaur.” These registrations range from upholstery companies to engine parts. Next, the group checks Google (www.google.com), performing rights organizations (www.ascap.com – www.bmi.com), internet domains (www.internic.net), and any other source they can find where bands would list themselves.
Since there are so many people using the name “Minotaur,” the band consults with an entertainment attorney who helps them perform a comprehensive search and analyzes the options. He stresses that a band name cannot infringe another trademark but it also cannot infringe someone else’s copyrights. After careful review, the group decides to use “Minotaur” in a stylized format to make them stand out. They put the new logo and band name on their website, t-shirts, and file a formal registration with both the State of Missouri and the federal government Now Minotaur should be adequately protected, and the band can rest easy that one else can simply steal their band name without serious repercussions. In order to maintain exclusive rights in that name, Minotaur only needs to keep using the name when they sell their services or merchandise. Notably, if a musician does not use the trademark in commerce for 3 years, he loses his rights in that trademark, as it is considered abandoned.
Obtaining a trademark and using it to protect your music is a fairly simply process. However, much like any other area of music law, spending a little time and effort up front can save an endless amount of headaches and lost profits down the road. Trademark infringement leads to lengthy and expensive litigation, and “I didn’t know I couldn’t do that” is not a defense. If an artist is willing to take the take and put in the effort to understand the laws that affect his craft, then he can successfully build a sold protective wall around his music. Such protection forms the foundation of a long, sustainable career in a very chaotic and constantly changing industry. Everything starts with a song, but you must protect and nurture that song in order for it to grow.
Matthew T. Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at Nagel@wuestlingandjames.com.
* Articles are primarily educational and do not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
Many different bricks go into building the foundation of a musician’s defenses, such as limiting his liability (LLC), securing his art (copyright), and establishing sources of revenue that announce his existence to the world (royalties and registrations). One of the most important pieces of this protection is the ability to protect the musician’s look and his brand or image. This image includes the musician’s name, both individually and the band’s name, his voice, and even the way he dresses on stage. Such protection is accomplished through a trademark.
What is a Trademark?
Under United States law, a trademark is a word, symbol, or device, used in commerce, which identifies the source of a good or service. As previously mentioned, this word, symbol, or device, can be your name, a logo, of even a particular look or display that is uniquely you own – i.e. your identifier. Most often this identifier is a musician’s band name and logo. When people see the identifier associated with a song or painting, they know exactly who made that particular piece of art. However, it is not enough to just think of a clever name or logo, but a musician must actually publically that name or logo it in a commercial manner before any trademark rights exist. This “use” can be playing a live gig under the band name or offering merchandise with the name and/or logo on it for sale. The band name is known as a service mark and the logo can be protected by both trademark and copyright law.
Much like copyrights, trademarks do not necessarily require registration. Trademark rights are established the first time the name or logo is used to sell something – the commercial use. Using “TM” next to the name or logo indicates that someone is claiming the trademark rights in an identifier but has not yet registered the trademark with the government. Once a band name or logo is registered with the government, the artist can use ® next to the name or logo. Notably, registering your trademark has several benefits: 1.) it announces to the world that someone has a right to that particular name or logo; 2.) it establishes a specific date when you acquired the rights in that name or logo; and 3.) it allows you to recover money and other remedies that are not always available without registration, such as filing a lawsuit in Federal Court. Often, just the threat of a lawsuit is enough to deter other bands from using your name or logo.
What is the Point of Trademarks?
Now, you should have an idea of what a trademark is, but the importance of a trademark is where things get interesting. If you hold a trademark in a name or logo, no one else can use that name or logo, with very few exceptions. Also, a trademark is a piece of property (intellectual property to be precise) that can be owned, bought, sold, or licensed. Musicians can even sell or rent the right to use their trademark for a specific geographic area. However, the place to start is choosing a name or logo that is not already owned by someone else.
For instance, a newly organized St. Louis rock band wants to pick a strong name that tells the public they love rock and Greek mythology. The group quickly picks “Minotaur.” However, before printing flyers, starting a website, or getting any new tattoos, the band realizes they need to make sure that no one else has a trademark in the name “Minotaur.” Otherwise, they run the risk of infringing that person’s trademark rights and open themselves up to a major lawsuit. The first place they check is the United States Patent and Trademark Office (www.uspto.gov), which reveals 30 different registered trademark records for the word “minotaur.” These registrations range from upholstery companies to engine parts. Next, the group checks Google (www.google.com), performing rights organizations (www.ascap.com – www.bmi.com), internet domains (www.internic.net), and any other source they can find where bands would list themselves.
Since there are so many people using the name “Minotaur,” the band consults with an entertainment attorney who helps them perform a comprehensive search and analyzes the options. He stresses that a band name cannot infringe another trademark but it also cannot infringe someone else’s copyrights. After careful review, the group decides to use “Minotaur” in a stylized format to make them stand out. They put the new logo and band name on their website, t-shirts, and file a formal registration with both the State of Missouri and the federal government Now Minotaur should be adequately protected, and the band can rest easy that one else can simply steal their band name without serious repercussions. In order to maintain exclusive rights in that name, Minotaur only needs to keep using the name when they sell their services or merchandise. Notably, if a musician does not use the trademark in commerce for 3 years, he loses his rights in that trademark, as it is considered abandoned.
Obtaining a trademark and using it to protect your music is a fairly simply process. However, much like any other area of music law, spending a little time and effort up front can save an endless amount of headaches and lost profits down the road. Trademark infringement leads to lengthy and expensive litigation, and “I didn’t know I couldn’t do that” is not a defense. If an artist is willing to take the take and put in the effort to understand the laws that affect his craft, then he can successfully build a sold protective wall around his music. Such protection forms the foundation of a long, sustainable career in a very chaotic and constantly changing industry. Everything starts with a song, but you must protect and nurture that song in order for it to grow.
Matthew T. Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at Nagel@wuestlingandjames.com.
* Articles are primarily educational and do not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
Royalties: Getting Paid in the Music Business
For the third installation of our royalty’s discussion, we will walk through the flow of money for a main-stream radio song. So far we have outlined the major players and defined the various types of royalties that each may be entitled to. Let’s put those players to work and see who gets paid.
Jeffrey Mandain is an aspiring songwriter from St. Louis, Missouri and after years of toil and a few tears, he writes a song called “Whiskey For My Hound Dog.” Mandain cannot play a single chord on the guitar, so he calls his friend Jack Preacher to help put the song to music. Preacher puts together a sorrowful guitar melody that speaks to everyone that hears the rough track that he records in Mandain’s garage. Neither Mandain nor Preacher know anything about royalties, copyrights, or how to get the song from Mandain’s garage to the bright lights of show business, so they call S&E Entertainment, a local publishing company. Recognizing the potential of “Whiskey For My Hound Dog,” S&E agrees to work with Mandain and Preacher and pays them $10,000.00 for a 50/50 split of the copyrights to the song’s music and lyrics. Since S&E is a savvy publisher, they get the exclusive right to exploit Mandain and Preacher’s portion of the copyright, which means they can sign licensing contracts as if they owned 100% of the copyright.
Soon after signing the contract, S&E registers Mandain and Preacher as songwriters on ASCAP, a performing rights organization, and registers “Whiskey For My Hound Dog” as a musical composition with ASCAP. S&E also registers the song with the Harry Fox Agency, the mechanical rights agency that S&E prefers to use.
So far, we have established a few of the players:
- Songwriters: Mandain and Preacher
- Publisher: S&E
- Performing Rights Organization: ASCAP
- Mechanical Rights Agency: Harry Fox Agency
Preacher received $5,000.00 and Mandain received $5,000.00 from S&E in exchange for 50% of the copyright and the ability to license the music and lyrics (the musical composition).
S&E immediately goes to work and calls Buzz Village Records, a promising record label in St. Louis. Buzz Village recently signed a budding star in Leia Sonalta, a young pop singer with a sultry voice. S&E and Buzz Village agree that “Whiskey For My Hound Dog” would be the perfect single to break Sonalta into the mainstream music world, and the two companies sign a contract that grants Sonalta a recording license to record a version of the song. Buzz Village pays S&E $1,000.00 for the recording license, and Sonalta records the track at Buzz Village’s in-house studio, including Preacher’s guitar work in her version. The recording is wildly successful and Buzz Village immediately presses 1000 CDs to send out to local radio stations.
Now we have a few more players and more money involved:
- Record Company: Buzz Village
- Performer: Sonalta
S&E received $1,000.00 from Buzz Village for the recording license, and distributes $250.00, $250.00 to Preacher, and keeps $500.00. (Remember S&E owns 50% of the copyright now). Buzz Village now owns the copyright to the master recording of Sonalta’s version of “Whiskey For My Hound Dog,” based upon their contract with the artist. Finally, Buzz Village pays $91.00 to S&E in mechanical royalties because they press 1000 copies of the musical composition (1000 CDs x 9.1 cent statutory rate). S&E distributes this money to Preacher and Mandain based on their contract ($22.75 each and $45.50 to S&E).
For purposes of this example and ease of math, let’s assume that under Sonalta’s contract with Buzz Village, Buzz Village retains the copyrights to her recordings and they split all profits from her albums 50/50. Any discussion of recoupment by the record label or any other aspects of a recording contract are outside the scope of this article.
Totals
• Preacher: $5,272.75
• Mandain: $5,272.75
• S&E: -$9,454.50
• Buzz Village -$1,000.00
• Sonalta $0.00
Sonalta’s version of “Whisky For My Hound Dog” is a smash hit! It plays on the radio constantly and record stores are clamoring for the opportunity to carry Sonalta’s album in their stores. Buzz Village quickly presses 100,000 CDs that all sell out in a week (retail price - $15 per CD). Cover bands across the country start playing “Whiskey For My Hound Dog” in bars and small venues, and Sonalta goes on a nation-wide tour to support the album. Also, websites allow users to stream the song and download short snippets of the song. Buzz Village and S&E also assign a synchronization license with a major movie studio to feature the song as the main title. The studio pays $10,000.00, which S&E and Buzz Village split 50/50.
Things have started to get interesting. Buzz Village pays $9,100.00 to S&E in mechanical royalties for pressing the 100,000 CDs. S&E also receives $5,000.00 for the sync license. ASCAP pays S&E $20,000.00 in performance royalties for the radio play, the cover bands, and Sonalta’s nation-wide tour (yup, she has to pay too even though she made it famous). S&E and Buzz Village also agree that Buzz Village will pay 2 cents for every copy of the album because Sonalta demanded to have the lyrics printed in the album notes ($2,000.00). SoundExchange pays $5,000.00 to both S&E and Buzz Village for all of the digital streaming that occurred on the Internet and the Musical Works Fund pays S&E $1,000.00 in AHRA royalties for all the people that illegally copied the album at home.
When you work out the math and distribute the money according to the contracts, the totals are:
• Preacher: $14,297.75 (lyrics only belong to Mandain)
• Mandain: $15,297.75
• S&E: $9,095.50
• Buzz Village $742,900.00
• Sonalta $750,000.00
Clearly, I made up the amounts involved and I did not account for a tremendous number of costs that go into the activities described in this example, such as pressing costs, artwork, shipping, overheard, etc.. Not to mention, I did not account for any of the intricacies that are part of the licensing and recording contracts between these parties. However, this example does outline the different ways that the Players use the Royalties for the final Payoff. Moreover, this cycle continues forever until the copyright holder dies or sells the copyright to someone else.
Matthew T. Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at Nagel@wuestlingandjames.com.
* Articles are primarily educational and do not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
Jeffrey Mandain is an aspiring songwriter from St. Louis, Missouri and after years of toil and a few tears, he writes a song called “Whiskey For My Hound Dog.” Mandain cannot play a single chord on the guitar, so he calls his friend Jack Preacher to help put the song to music. Preacher puts together a sorrowful guitar melody that speaks to everyone that hears the rough track that he records in Mandain’s garage. Neither Mandain nor Preacher know anything about royalties, copyrights, or how to get the song from Mandain’s garage to the bright lights of show business, so they call S&E Entertainment, a local publishing company. Recognizing the potential of “Whiskey For My Hound Dog,” S&E agrees to work with Mandain and Preacher and pays them $10,000.00 for a 50/50 split of the copyrights to the song’s music and lyrics. Since S&E is a savvy publisher, they get the exclusive right to exploit Mandain and Preacher’s portion of the copyright, which means they can sign licensing contracts as if they owned 100% of the copyright.
Soon after signing the contract, S&E registers Mandain and Preacher as songwriters on ASCAP, a performing rights organization, and registers “Whiskey For My Hound Dog” as a musical composition with ASCAP. S&E also registers the song with the Harry Fox Agency, the mechanical rights agency that S&E prefers to use.
So far, we have established a few of the players:
- Songwriters: Mandain and Preacher
- Publisher: S&E
- Performing Rights Organization: ASCAP
- Mechanical Rights Agency: Harry Fox Agency
Preacher received $5,000.00 and Mandain received $5,000.00 from S&E in exchange for 50% of the copyright and the ability to license the music and lyrics (the musical composition).
S&E immediately goes to work and calls Buzz Village Records, a promising record label in St. Louis. Buzz Village recently signed a budding star in Leia Sonalta, a young pop singer with a sultry voice. S&E and Buzz Village agree that “Whiskey For My Hound Dog” would be the perfect single to break Sonalta into the mainstream music world, and the two companies sign a contract that grants Sonalta a recording license to record a version of the song. Buzz Village pays S&E $1,000.00 for the recording license, and Sonalta records the track at Buzz Village’s in-house studio, including Preacher’s guitar work in her version. The recording is wildly successful and Buzz Village immediately presses 1000 CDs to send out to local radio stations.
Now we have a few more players and more money involved:
- Record Company: Buzz Village
- Performer: Sonalta
S&E received $1,000.00 from Buzz Village for the recording license, and distributes $250.00, $250.00 to Preacher, and keeps $500.00. (Remember S&E owns 50% of the copyright now). Buzz Village now owns the copyright to the master recording of Sonalta’s version of “Whiskey For My Hound Dog,” based upon their contract with the artist. Finally, Buzz Village pays $91.00 to S&E in mechanical royalties because they press 1000 copies of the musical composition (1000 CDs x 9.1 cent statutory rate). S&E distributes this money to Preacher and Mandain based on their contract ($22.75 each and $45.50 to S&E).
For purposes of this example and ease of math, let’s assume that under Sonalta’s contract with Buzz Village, Buzz Village retains the copyrights to her recordings and they split all profits from her albums 50/50. Any discussion of recoupment by the record label or any other aspects of a recording contract are outside the scope of this article.
Totals
• Preacher: $5,272.75
• Mandain: $5,272.75
• S&E: -$9,454.50
• Buzz Village -$1,000.00
• Sonalta $0.00
Sonalta’s version of “Whisky For My Hound Dog” is a smash hit! It plays on the radio constantly and record stores are clamoring for the opportunity to carry Sonalta’s album in their stores. Buzz Village quickly presses 100,000 CDs that all sell out in a week (retail price - $15 per CD). Cover bands across the country start playing “Whiskey For My Hound Dog” in bars and small venues, and Sonalta goes on a nation-wide tour to support the album. Also, websites allow users to stream the song and download short snippets of the song. Buzz Village and S&E also assign a synchronization license with a major movie studio to feature the song as the main title. The studio pays $10,000.00, which S&E and Buzz Village split 50/50.
Things have started to get interesting. Buzz Village pays $9,100.00 to S&E in mechanical royalties for pressing the 100,000 CDs. S&E also receives $5,000.00 for the sync license. ASCAP pays S&E $20,000.00 in performance royalties for the radio play, the cover bands, and Sonalta’s nation-wide tour (yup, she has to pay too even though she made it famous). S&E and Buzz Village also agree that Buzz Village will pay 2 cents for every copy of the album because Sonalta demanded to have the lyrics printed in the album notes ($2,000.00). SoundExchange pays $5,000.00 to both S&E and Buzz Village for all of the digital streaming that occurred on the Internet and the Musical Works Fund pays S&E $1,000.00 in AHRA royalties for all the people that illegally copied the album at home.
When you work out the math and distribute the money according to the contracts, the totals are:
• Preacher: $14,297.75 (lyrics only belong to Mandain)
• Mandain: $15,297.75
• S&E: $9,095.50
• Buzz Village $742,900.00
• Sonalta $750,000.00
Clearly, I made up the amounts involved and I did not account for a tremendous number of costs that go into the activities described in this example, such as pressing costs, artwork, shipping, overheard, etc.. Not to mention, I did not account for any of the intricacies that are part of the licensing and recording contracts between these parties. However, this example does outline the different ways that the Players use the Royalties for the final Payoff. Moreover, this cycle continues forever until the copyright holder dies or sells the copyright to someone else.
Matthew T. Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at Nagel@wuestlingandjames.com.
* Articles are primarily educational and do not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
Tuesday, November 17, 2009
What You Need to Succeed
At S&E Entertainment, we work with independent artists with 2 goals in mind: help them make money and provide the tools and knowledge that provide an opportunity to play music as their fulltime job. That being said, there are certain traits that an independent artist needs to have in order to meet both those goals. Please understand that when we refer to a musician and as "independent artist," that means the group does not have a record deal (big or small) that would provode outside support to promote the group and its records.
This is a short list of the traits that we feel are essential for an indie artist to have in their band. Notably, not one person needs to possess all of these traits. A band can divide tasks based on ability/interest or hire support staff to help - i.e. business managers, lawyers, computer wiz, etc..
Traits of Successful Indies:
This is a short list of the traits that we feel are essential for an indie artist to have in their band. Notably, not one person needs to possess all of these traits. A band can divide tasks based on ability/interest or hire support staff to help - i.e. business managers, lawyers, computer wiz, etc..
Traits of Successful Indies:
- Write Great Songs: There is an unbelievable amount of music being recorded and disseminated every single day across the globe. People know a great song when they hear it, and in the age of digital music and the Internet, they don't have to sit through your crappy song to hear something else. If your music isn't that good, then people won't spend their time or money on it. You don't have a major label and major label money working for you in an effort to convince the public that you're worth $15.00 a ticket.
- Ability to Connect with Fans: The days of the brooding artist are over. With the advent of MySpace, Facebook, Twitter, and other social networking sites, fans expect to be able to reach out and contact their favorite artists in an instant. Moreover, they expect a response. You aren't the Beatles, the Eagles, Aerosmith, or even Brittany Spears. If someone likes your music enough to send you a personal message, then expect you to spend the time to send them a personal message back. Yes, it may take away time that you would otherwise spend on your music, but if you don't get back to them, chances are that they won't come back to you. If you don't like communicating with people, find someone in your badn that does or hire someone to run these fan portals.
- Legal Knowledge: We aren't advocating that you send someone to law school, or recruit at the Bar Association for a bass player. However, the band needs to possess a basic understanding of your rights as a musician, including copyright, trademark, contract law, and torts. The information is out there - go do your homework. If you don't have the time, patience, or just plain don't understand, spend the money to consult with a lawyer. AND LISTEN TO HIM/HER!
- Computyer Savvy: It is 2009, not 1994. People expect to sleek, fast websites that deliver content immediately. They do not want to see blink text, garish color schemes, or to wait on long load times. If you don't know anything about basic web design, find someone who does - FAST! The Internet has the ability to level the playing field for indie bands ... or it can make you look like completel amatuers and cheapen your hard work
- Business Smarts: Someone in the band must take the lead in forming and fostering business relationships. The same was true 50 years ago, and is still true today - who you know can make or break your career. Make those connections, and present a professional business attitude. Have an idea of what constitutes a good deal vs. a bad deal. Again, do your homework, as knowledge about a particular deal can make all of the difference. How much do bands normally get paid at this venue? Do you pay for gas money for out-of-town acts? What's the difference between a "point" and a "percentage" and "gross" and "net"?
- Unexhaustable Work Ethic: When we sign a band to our publishing company, we look for people who cannot sleep at night. We want them to be so concerned about their career, selling their music, and promoting their brand, that it literally keeps them up at night. Those are the people that stay late at venues shaking hands and handing out business cards. They are up at 3:00 AM sending MySpace messages and hand writing thank you letters. Remember, your art and your talent is a gift, but that gift is nothing without investing hard work to nurture it.
Royalties - Getting Paid In The Music Business
Part II of explaining royalties in the music business involves defining what royalties are available to musicians and how those royalties are assigned and collected. When analyzing royalties, it is crucial to understand that copyright law is the deciding factor in who owns the royalty rights and who is paid according to those rights. If you do not have a firm grasp on copyrights, please review the prior article on that subject.
Copyright law is all about who controls the exclusive rights to a piece of art (i.e. music in this case) and exercising those rights to exclude other people from using that piece of art. Importantly, individuals can give the copyrights away to other people and companies or they can grant permission to another person to use the copyrighted piece of art – a license. A license is a contract between the copyright owner and another person or company, which allows that other person to use the art for a particular purpose. While I understand this can be a lot to understand at first, it will all make sense in the end.
Remember, copyrights can be bought, sold, and given away just like any other piece of property. As we work through each individual royalty, I will refer to the copyright holder. This is the person who actually owns the copyright, and it is not necessarily the songwriter. In fact, the copyright holder is rarely the songwriter (except for independent musicians) because the songwriter has probably sold the copyright in the musical composition to a publisher (either in part or completely), a performer, or a record company.
PART II – The Royalties
Print Royalties – Though not used very often in recent years, the copyright holder of a musical composition is a due a royalty every time his music or lyrics are printed on paper. This includes printed sheet music and lyrics in album notes. The lesson here – if you are not the copyright holder of the lyrics, you have to pay the copyright holder if you want to print the lyrics in your album or on your website.
Performance Royalties – A performance royalty is paid to the copyright holder of a musical composition any time the composition is (wait for it ….) performed. This includes play on the radio and live performances. For instance, if a cover band played your song at the local bar, you should get paid a performance royalty. A performance rights organization (PRO) collects performance royalties, based on a blanket license. Normally, venues and radio stations pay a flat fee every year to a PRO so that they can play any song that is registered with that PRO. The copyright holder is paid a portion of this license fee, based upon how many times his musical composition was played.
Mechanical Royalties – A mechanical royalty is paid to the copyright holder of a musical composition any time that composition any time that composition is reproduced on some type of physical media. Basically, this means that anytime a song is put down on a CD, cassette, record, or DVD, the copyright holder gets paid. The person reproducing the song must get a mechanical license from the copyright holder of the musical composition and a mechanical license from the copyright holder of the sound recording. Remember any particular record song has three distinct copyrights (the music, the lyrics, and the actual recording of a performing playing those music and lyrics). This mechanical license is available from one of the mechanical rights agencies, and the license fee is set by the United States Library of Congress’ Copyright Office.
Currently (as of October 2009), the rate is 9.1 cents per unit reproduced (i.e. 9.1 per CD that the musical composition appears on). Mechanical royalties are paid directly to the copyright holder(s) or their publishers. Notably, a copyright holder can agree to be paid less than the statutory rate set by the Copyright Office – this is common in record deals. There are also certain uses of a musical composition to which a copyright holder cannot refuse. In those cases a compulsory license is used and the copyright holder is paid according to the rate set by the Copyright Office.
Synchronization Royalties – In order to reproduce or play a musical composition in a film, television program, commercial or any other visual presentation, the person displaying the images must obtain a synchronization license (a “sync license”) from the copyright holder of the musical composition and a master use license from the copyright holder of the sound recording. More often than not, the copyright holder requires the film or television program to pay a synchronization royalty, based on the number of times the program is shown. There is no statutory or set rate for synchronization royalties, and each use is individually negotiated.
Digital Royalties – Digital royalties are very similar to performance royalties. These cover simulcasting, webcasting, streaming, downloading, and other on-line music services that PROs do not or cannot monitor. These royalties are normally assigned with a blanket license, but this is a very new area for music royalties and is not completely defined yet. SoundExchange, a type of PRO, was formed to track the music played on the Internet and distribute royalties to copyright holders.
AHRA Royalties – In 1992, Congress passed the Audio Home Recording Act, which requires the manufacturers of digital audio recording devices (DVD and CD burners) and blank recording media (CDRs, DVD-Rs, and cassette tapes) to pay a percentage of all money made from selling these devices and media to the Register of Copyrights. The Register then distributes that money to the Sound Recording Fund and the Musical Works Fund to make up for performers, songwriters, and record companies lost sales from people burning illegal copies of the copyrighted material. The two Funds distribute the money to songwriters and record companies through the PROs.
In Part III, we will put all of this information together and demonstrate how all of the players and royalties work with a song and how everyone enjoys the final payoff.
Matthew T. Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at Nagel@wuestlingandjames.com.
* Articles are primarily educational and do not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
Copyright law is all about who controls the exclusive rights to a piece of art (i.e. music in this case) and exercising those rights to exclude other people from using that piece of art. Importantly, individuals can give the copyrights away to other people and companies or they can grant permission to another person to use the copyrighted piece of art – a license. A license is a contract between the copyright owner and another person or company, which allows that other person to use the art for a particular purpose. While I understand this can be a lot to understand at first, it will all make sense in the end.
Remember, copyrights can be bought, sold, and given away just like any other piece of property. As we work through each individual royalty, I will refer to the copyright holder. This is the person who actually owns the copyright, and it is not necessarily the songwriter. In fact, the copyright holder is rarely the songwriter (except for independent musicians) because the songwriter has probably sold the copyright in the musical composition to a publisher (either in part or completely), a performer, or a record company.
PART II – The Royalties
Print Royalties – Though not used very often in recent years, the copyright holder of a musical composition is a due a royalty every time his music or lyrics are printed on paper. This includes printed sheet music and lyrics in album notes. The lesson here – if you are not the copyright holder of the lyrics, you have to pay the copyright holder if you want to print the lyrics in your album or on your website.
Performance Royalties – A performance royalty is paid to the copyright holder of a musical composition any time the composition is (wait for it ….) performed. This includes play on the radio and live performances. For instance, if a cover band played your song at the local bar, you should get paid a performance royalty. A performance rights organization (PRO) collects performance royalties, based on a blanket license. Normally, venues and radio stations pay a flat fee every year to a PRO so that they can play any song that is registered with that PRO. The copyright holder is paid a portion of this license fee, based upon how many times his musical composition was played.
Mechanical Royalties – A mechanical royalty is paid to the copyright holder of a musical composition any time that composition any time that composition is reproduced on some type of physical media. Basically, this means that anytime a song is put down on a CD, cassette, record, or DVD, the copyright holder gets paid. The person reproducing the song must get a mechanical license from the copyright holder of the musical composition and a mechanical license from the copyright holder of the sound recording. Remember any particular record song has three distinct copyrights (the music, the lyrics, and the actual recording of a performing playing those music and lyrics). This mechanical license is available from one of the mechanical rights agencies, and the license fee is set by the United States Library of Congress’ Copyright Office.
Currently (as of October 2009), the rate is 9.1 cents per unit reproduced (i.e. 9.1 per CD that the musical composition appears on). Mechanical royalties are paid directly to the copyright holder(s) or their publishers. Notably, a copyright holder can agree to be paid less than the statutory rate set by the Copyright Office – this is common in record deals. There are also certain uses of a musical composition to which a copyright holder cannot refuse. In those cases a compulsory license is used and the copyright holder is paid according to the rate set by the Copyright Office.
Synchronization Royalties – In order to reproduce or play a musical composition in a film, television program, commercial or any other visual presentation, the person displaying the images must obtain a synchronization license (a “sync license”) from the copyright holder of the musical composition and a master use license from the copyright holder of the sound recording. More often than not, the copyright holder requires the film or television program to pay a synchronization royalty, based on the number of times the program is shown. There is no statutory or set rate for synchronization royalties, and each use is individually negotiated.
Digital Royalties – Digital royalties are very similar to performance royalties. These cover simulcasting, webcasting, streaming, downloading, and other on-line music services that PROs do not or cannot monitor. These royalties are normally assigned with a blanket license, but this is a very new area for music royalties and is not completely defined yet. SoundExchange, a type of PRO, was formed to track the music played on the Internet and distribute royalties to copyright holders.
AHRA Royalties – In 1992, Congress passed the Audio Home Recording Act, which requires the manufacturers of digital audio recording devices (DVD and CD burners) and blank recording media (CDRs, DVD-Rs, and cassette tapes) to pay a percentage of all money made from selling these devices and media to the Register of Copyrights. The Register then distributes that money to the Sound Recording Fund and the Musical Works Fund to make up for performers, songwriters, and record companies lost sales from people burning illegal copies of the copyrighted material. The two Funds distribute the money to songwriters and record companies through the PROs.
In Part III, we will put all of this information together and demonstrate how all of the players and royalties work with a song and how everyone enjoys the final payoff.
Matthew T. Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at Nagel@wuestlingandjames.com.
* Articles are primarily educational and do not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
Friday, November 13, 2009
The New Music Age
One of things that we stress to S&E Entertainment clients is that you need to be accessible to as many people as possible, both in person and online. The bottom-line: have a presence where your fans are and provide them the ability to interact with that presence. it is no longer enough to simply put the information out there and hope that someone enjoys it and spends their time and money following your musical career.
A recent article by Kyle Bylin highlights this advice:
"I was ten when I recorded "The Rockafeller Skank" by Fatboy Slim off the radio onto cassette tape. Twelve when “The Real Slim Shady” by Eminem premiered on TRL. The idea that I could reach out and connect with the artists that I liked didn’t exist yet or at least wasn’t familiar to me. MySpace didn’t become popular where I grew up – almost no one that I knew had it. Artists were perceived as unreachable. What you knew about them was based on the lyrics in their songs or maybe a brief interview segment in Rolling Stone. Even the concept of sending traditional fan mail was of no interest, because there was no expectation of the artist reading it or writing back. It was basically the equivalent of trying to actually send your Christmas list to Santa at the North Pole.
In the truest form, I, along with everyone I knew, were passive consumers of music and thought nothing of tuning into the radio and not getting to choose what songs were playing. Waiting through a few terrible videos on MTV in order to hear something good was commonplace and seen as a way to pass the time. Today that’s just not the case anymore. Music fans have set different expectations for artists and insist that they are met. While not everyone has interest in messaging their favorite artist, those that do, anticipate a reply back. Of course, no one is shedding tears when old hats like Metallica or Def Leppard don’t reply, but for Making April or Owl City, fans have come accustomed to the idea that they are able to reach out to these artists and make a real connection.
What does this mean for an artist? Think about it as the blurring of the line between the public artist and the private individual, at a time, when the boundary between home and studio has largely disappeared. On tour, thanks, by and large, to advances in digital technologies, the ability to stay in touch with their fans has become delocalized for many artists, so that it can be done at all hours from almost anywhere. Leisure time once spent doing creative things — where an artist could take time away from it all — has turned into work that ranges from learning how to market themselves online and off, answering an endless barrage of messages from fans, bloggers, and managers, and trying to keep all of their profiles, blogs, and social media tools relevant and up-to-date.
“It’s that the once disparate spheres have now collided and interpenetrated each other, creating a sense of “elsewhere” at all times,” writes Sociologist Dalton Conley in Elsewhere, U.S.A. He continues, “It is the plethora of economic opportunities created by technology that creates a dogging sense of loss, of needing to be elsewhere, doing something different.”1 Whether you liken elsewhere to the next social networking site that seems to have more promising opportunities or the idea that instead of making more music you should be figuring out how to better market the music that you’ve already made — the message is clear — that what it means to be an artist in the twenty-first century will be drastically different from what previous generations have experienced."
A recent article by Kyle Bylin highlights this advice:
"I was ten when I recorded "The Rockafeller Skank" by Fatboy Slim off the radio onto cassette tape. Twelve when “The Real Slim Shady” by Eminem premiered on TRL. The idea that I could reach out and connect with the artists that I liked didn’t exist yet or at least wasn’t familiar to me. MySpace didn’t become popular where I grew up – almost no one that I knew had it. Artists were perceived as unreachable. What you knew about them was based on the lyrics in their songs or maybe a brief interview segment in Rolling Stone. Even the concept of sending traditional fan mail was of no interest, because there was no expectation of the artist reading it or writing back. It was basically the equivalent of trying to actually send your Christmas list to Santa at the North Pole.
In the truest form, I, along with everyone I knew, were passive consumers of music and thought nothing of tuning into the radio and not getting to choose what songs were playing. Waiting through a few terrible videos on MTV in order to hear something good was commonplace and seen as a way to pass the time. Today that’s just not the case anymore. Music fans have set different expectations for artists and insist that they are met. While not everyone has interest in messaging their favorite artist, those that do, anticipate a reply back. Of course, no one is shedding tears when old hats like Metallica or Def Leppard don’t reply, but for Making April or Owl City, fans have come accustomed to the idea that they are able to reach out to these artists and make a real connection.
What does this mean for an artist? Think about it as the blurring of the line between the public artist and the private individual, at a time, when the boundary between home and studio has largely disappeared. On tour, thanks, by and large, to advances in digital technologies, the ability to stay in touch with their fans has become delocalized for many artists, so that it can be done at all hours from almost anywhere. Leisure time once spent doing creative things — where an artist could take time away from it all — has turned into work that ranges from learning how to market themselves online and off, answering an endless barrage of messages from fans, bloggers, and managers, and trying to keep all of their profiles, blogs, and social media tools relevant and up-to-date.
“It’s that the once disparate spheres have now collided and interpenetrated each other, creating a sense of “elsewhere” at all times,” writes Sociologist Dalton Conley in Elsewhere, U.S.A. He continues, “It is the plethora of economic opportunities created by technology that creates a dogging sense of loss, of needing to be elsewhere, doing something different.”1 Whether you liken elsewhere to the next social networking site that seems to have more promising opportunities or the idea that instead of making more music you should be figuring out how to better market the music that you’ve already made — the message is clear — that what it means to be an artist in the twenty-first century will be drastically different from what previous generations have experienced."
Thursday, November 12, 2009
Royalties -- Getting Paid In The Music Business
Some artists are truly inspired and moved to action by the music in their hearts. They would lovingly ply their trade on the street corner, adhering to a strict vow of poverty just to know they could have their music heard. However, most musicians want to be compensated for their talent and efforts – if nothing else to pay the rent and eat. They too are inspired and moved by their music, but fame, riches, and glory are also strong motivators – or more likely the fabled ultimate payoff for a lifetime of hard work. It is called the music business for a reason, but far too often artists jump at the chance to “get into the business” without properly protecting their art or even understanding how they are compensated for their music.
Without a doubt, the least understood and most overlooked sources of that compensation are royalties. Through a series of articles we will break down the Players, the Royalties, and the Payoffs.
PART I – The Players
Songwriter(s) – The person or people that wrote the lyrics and/or the musical notes for the song. Together, the lyrics and music are called the musical composition. Notably, the lyrics and music can be written by entirely separate people or groups that each have their own publishers, assigners, and performing rights organizations. Often the individual(s) responsible for the music are called composers.
Performer – The performer is the person or group that actually plays the musical composition at live performances and on recordings. The performer gets permission to perform the musical composition though a license. When the performer or someone within the performer’s group is also the songwriter, this license is usually not written down because if the song belongs to you, then you always have the right to perform it. As we explore a little further, it turns out that the songwriter does not always own his songs because part of the ownership is shared with a publisher.
Record Company – A record company employs performers to play and record musical compositions. In exchange for the marketing a performer, arranging for recording and production of a song, and occasionally a cash advance, the record company owns the master recording of the performer playing the musical composition. In plain English, the record company owns the recorded version of the performing playing the song. This is referred as the master or the sound recording.
Publisher – The publisher is a company that works with the songwriter to promote his musical compositions, encouraging performers to play the song, placing the song in movies and commercials, and pitching the song to record companies. Often, publishers pay the songwriter for partial or complete ownership of the musical composition (usually 50/50). Then the publisher charges a licensing fee to performers, film and television directors, and record companies for the right to use the musical composition. Occasionally, a publisher does not take ownership of the musical composition and the underlying copyrights but merely charges the songwriter a flat fee or percentage to promote and license the musical composition. This type of publisher is called a rights administration company.
Performing Rights Organization – A performing rights organization (PRO) is an association or company that works with songwriters and publishers to monitor and assign royalties any time a musical composition is performed. This includes radio play, live performances, and play on film and television. Very recently, PROs are monitoring and paying royalties on digital plays on the Internet, based on licenses. The major PROs are the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and the Society of European Stage Authors and Composers (SESAC). Notably, songwriters can only register with one PRO.
Mechanical Rights Agency – A mechanical rights agency works with songwriters and publishers to license the right to record a musical composition to performers and record companies. When a performer wants to record a song for which he is not the songwriter, then he must obtain a mechanical license. The mechanical rights agency issues the license, tracks the usage of the recorded song, and facilitates payment between the performers and publishers/songwriters (the mechanical royalty). Of course, the mechanical rights agency charges a percent of the mechanical royalty for their services. The major mechanical rights organizations are The Harry Fox Agency and the Canadian Mechanical Rights Production Agency (CMRRA).
Now armed with the knowledge of the people involved in creating a song, you are now ready to understand the different ways that a musician can get paid for that song (i.e. revenue streams). Come back for Part II – The Royalties.
Matthew T. Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at Nagel@wuestlingandjames.com.
* Articles are primarily educational and do not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
Without a doubt, the least understood and most overlooked sources of that compensation are royalties. Through a series of articles we will break down the Players, the Royalties, and the Payoffs.
PART I – The Players
Songwriter(s) – The person or people that wrote the lyrics and/or the musical notes for the song. Together, the lyrics and music are called the musical composition. Notably, the lyrics and music can be written by entirely separate people or groups that each have their own publishers, assigners, and performing rights organizations. Often the individual(s) responsible for the music are called composers.
Performer – The performer is the person or group that actually plays the musical composition at live performances and on recordings. The performer gets permission to perform the musical composition though a license. When the performer or someone within the performer’s group is also the songwriter, this license is usually not written down because if the song belongs to you, then you always have the right to perform it. As we explore a little further, it turns out that the songwriter does not always own his songs because part of the ownership is shared with a publisher.
Record Company – A record company employs performers to play and record musical compositions. In exchange for the marketing a performer, arranging for recording and production of a song, and occasionally a cash advance, the record company owns the master recording of the performer playing the musical composition. In plain English, the record company owns the recorded version of the performing playing the song. This is referred as the master or the sound recording.
Publisher – The publisher is a company that works with the songwriter to promote his musical compositions, encouraging performers to play the song, placing the song in movies and commercials, and pitching the song to record companies. Often, publishers pay the songwriter for partial or complete ownership of the musical composition (usually 50/50). Then the publisher charges a licensing fee to performers, film and television directors, and record companies for the right to use the musical composition. Occasionally, a publisher does not take ownership of the musical composition and the underlying copyrights but merely charges the songwriter a flat fee or percentage to promote and license the musical composition. This type of publisher is called a rights administration company.
Performing Rights Organization – A performing rights organization (PRO) is an association or company that works with songwriters and publishers to monitor and assign royalties any time a musical composition is performed. This includes radio play, live performances, and play on film and television. Very recently, PROs are monitoring and paying royalties on digital plays on the Internet, based on licenses. The major PROs are the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and the Society of European Stage Authors and Composers (SESAC). Notably, songwriters can only register with one PRO.
Mechanical Rights Agency – A mechanical rights agency works with songwriters and publishers to license the right to record a musical composition to performers and record companies. When a performer wants to record a song for which he is not the songwriter, then he must obtain a mechanical license. The mechanical rights agency issues the license, tracks the usage of the recorded song, and facilitates payment between the performers and publishers/songwriters (the mechanical royalty). Of course, the mechanical rights agency charges a percent of the mechanical royalty for their services. The major mechanical rights organizations are The Harry Fox Agency and the Canadian Mechanical Rights Production Agency (CMRRA).
Now armed with the knowledge of the people involved in creating a song, you are now ready to understand the different ways that a musician can get paid for that song (i.e. revenue streams). Come back for Part II – The Royalties.
Matthew T. Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at Nagel@wuestlingandjames.com.
* Articles are primarily educational and do not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
Monday, October 26, 2009
Trademarks: Building The Empire
Constructing a successful and sustainable career in the music industry is very similar to building an empire. An artist must establish a home base, gather his strength, and send out efforts until his influence expands – controlling more and more territory and conquering the hearts and minds of more people. However, it is equally important to build strong defenses to protect the assets that the artist’s empire is built upon. Specifically, a musician has to protect himself and his music if he wants to succeed in the music business.
Many different bricks go into building the foundation of a musician’s defenses, such as limiting his liability (LLC), securing his art (copyright), and establishing sources of revenue that announce his existence to the world (royalties and registrations). One of the most important pieces of this protection is the ability to protect the musician’s look and his brand or image. This image includes the musician’s name, both individually and the band’s name, his voice, and even the way he dresses on stage. Such protection is accomplished through a trademark.
What is a Trademark?
Under United States law, a trademark is a word, symbol, or device, used in commerce, which identifies the source of a good or service. As previously mentioned, this word, symbol, or device, can be your name, a logo, of even a particular look or display that is uniquely you own – i.e. your identifier. Most often this identifier is a musician’s band name and logo. When people see the identifier associated with a song or painting, they know exactly who made that particular piece of art. However, it is not enough to just think of a clever name or logo, but a musician must actually publically that name or logo it in a commercial manner before any trademark rights exist. This “use” can be playing a live gig under the band name or offering merchandise with the name and/or logo on it for sale. The band name is known as a service mark and the logo can be protected by both trademark and copyright law.
Much like copyrights, trademarks do not necessarily require registration. Trademark rights are established the first time the name or logo is used to sell something – the commercial use. Using “TM” next to the name or logo indicates that someone is claiming the trademark rights in an identifier but has not yet registered the trademark with the government. Once a band name or logo is registered with the government, the artist can use ® next to the name or logo. Notably, registering your trademark has several benefits: 1.) it announces to the world that someone has a right to that particular name or logo; 2.) it establishes a specific date when you acquired the rights in that name or logo; and 3.) it allows you to recover money and other remedies that are not always available without registration, such as filing a lawsuit in Federal Court. Often, just the threat of a lawsuit is enough to deter other bands from using your name or logo.
What is the Point of Trademarks?
Now, you should have an idea of what a trademark is, but the importance of a trademark is where things get interesting. If you hold a trademark in a name or logo, no one else can use that name or logo, with very few exceptions. Also, a trademark is a piece of property (intellectual property to be precise) that can be owned, bought, sold, or licensed. Musicians can even sell or rent the right to use their trademark for a specific geographic area. However, the place to start is choosing a name or logo that is not already owned by someone else.
For instance, a newly organized St. Louis rock band wants to pick a strong name that tells the public they love rock and Greek mythology. The group quickly picks “Minotaur.” However, before printing flyers, starting a website, or getting any new tattoos, the band realizes they need to make sure that no one else has a trademark in the name “Minotaur.” Otherwise, they run the risk of infringing that person’s trademark rights and open themselves up to a major lawsuit. The first place they check is the United States Patent and Trademark Office (www.uspto.gov), which reveals 30 different registered trademark records for the word “minotaur.” These registrations range from upholstery companies to engine parts. Next, the group checks Google (www.google.com), performing rights organizations (www.ascap.com – www.bmi.com), internet domains (www.internic.net), and any other source they can find where bands would list themselves.
Since there are so many people using the name “Minotaur,” the band consults with an entertainment attorney who helps them perform a comprehensive search and analyzes the options. He stresses that a band name cannot infringe another trademark but it also cannot infringe someone else’s copyrights. After careful review, the group decides to use “Minotaur” in a stylized format to make them stand out. They put the new logo and band name on their website, t-shirts, and file a formal registration with both the State of Missouri and the federal government Now Minotaur should be adequately protected, and the band can rest easy that one else can simply steal their band name without serious repercussions. In order to maintain exclusive rights in that name, Minotaur only needs to keep using the name when they sell their services or merchandise. Notably, if a musician does not use the trademark in commerce for 3 years, he loses his rights in that trademark, as it is considered abandoned.
Obtaining a trademark and using it to protect your music is a fairly simply process. However, much like any other area of music law, spending a little time and effort up front can save an endless amount of headaches and lost profits down the road. Trademark infringement leads to lengthy and expensive litigation, and “I didn’t know I couldn’t do that” is not a defense. If an artist is willing to take the take and put in the effort to understand the laws that affect his craft, then he can successfully build a sold protective wall around his music. Such protection forms the foundation of a long, sustainable career in a very chaotic and constantly changing industry. Everything starts with a song, but you must protect and nurture that song in order for it to grow.
Matthew T. Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at Nagel@wuestlingandjames.com.
* Articles are primarily educational and do not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
Many different bricks go into building the foundation of a musician’s defenses, such as limiting his liability (LLC), securing his art (copyright), and establishing sources of revenue that announce his existence to the world (royalties and registrations). One of the most important pieces of this protection is the ability to protect the musician’s look and his brand or image. This image includes the musician’s name, both individually and the band’s name, his voice, and even the way he dresses on stage. Such protection is accomplished through a trademark.
What is a Trademark?
Under United States law, a trademark is a word, symbol, or device, used in commerce, which identifies the source of a good or service. As previously mentioned, this word, symbol, or device, can be your name, a logo, of even a particular look or display that is uniquely you own – i.e. your identifier. Most often this identifier is a musician’s band name and logo. When people see the identifier associated with a song or painting, they know exactly who made that particular piece of art. However, it is not enough to just think of a clever name or logo, but a musician must actually publically that name or logo it in a commercial manner before any trademark rights exist. This “use” can be playing a live gig under the band name or offering merchandise with the name and/or logo on it for sale. The band name is known as a service mark and the logo can be protected by both trademark and copyright law.
Much like copyrights, trademarks do not necessarily require registration. Trademark rights are established the first time the name or logo is used to sell something – the commercial use. Using “TM” next to the name or logo indicates that someone is claiming the trademark rights in an identifier but has not yet registered the trademark with the government. Once a band name or logo is registered with the government, the artist can use ® next to the name or logo. Notably, registering your trademark has several benefits: 1.) it announces to the world that someone has a right to that particular name or logo; 2.) it establishes a specific date when you acquired the rights in that name or logo; and 3.) it allows you to recover money and other remedies that are not always available without registration, such as filing a lawsuit in Federal Court. Often, just the threat of a lawsuit is enough to deter other bands from using your name or logo.
What is the Point of Trademarks?
Now, you should have an idea of what a trademark is, but the importance of a trademark is where things get interesting. If you hold a trademark in a name or logo, no one else can use that name or logo, with very few exceptions. Also, a trademark is a piece of property (intellectual property to be precise) that can be owned, bought, sold, or licensed. Musicians can even sell or rent the right to use their trademark for a specific geographic area. However, the place to start is choosing a name or logo that is not already owned by someone else.
For instance, a newly organized St. Louis rock band wants to pick a strong name that tells the public they love rock and Greek mythology. The group quickly picks “Minotaur.” However, before printing flyers, starting a website, or getting any new tattoos, the band realizes they need to make sure that no one else has a trademark in the name “Minotaur.” Otherwise, they run the risk of infringing that person’s trademark rights and open themselves up to a major lawsuit. The first place they check is the United States Patent and Trademark Office (www.uspto.gov), which reveals 30 different registered trademark records for the word “minotaur.” These registrations range from upholstery companies to engine parts. Next, the group checks Google (www.google.com), performing rights organizations (www.ascap.com – www.bmi.com), internet domains (www.internic.net), and any other source they can find where bands would list themselves.
Since there are so many people using the name “Minotaur,” the band consults with an entertainment attorney who helps them perform a comprehensive search and analyzes the options. He stresses that a band name cannot infringe another trademark but it also cannot infringe someone else’s copyrights. After careful review, the group decides to use “Minotaur” in a stylized format to make them stand out. They put the new logo and band name on their website, t-shirts, and file a formal registration with both the State of Missouri and the federal government Now Minotaur should be adequately protected, and the band can rest easy that one else can simply steal their band name without serious repercussions. In order to maintain exclusive rights in that name, Minotaur only needs to keep using the name when they sell their services or merchandise. Notably, if a musician does not use the trademark in commerce for 3 years, he loses his rights in that trademark, as it is considered abandoned.
Obtaining a trademark and using it to protect your music is a fairly simply process. However, much like any other area of music law, spending a little time and effort up front can save an endless amount of headaches and lost profits down the road. Trademark infringement leads to lengthy and expensive litigation, and “I didn’t know I couldn’t do that” is not a defense. If an artist is willing to take the take and put in the effort to understand the laws that affect his craft, then he can successfully build a sold protective wall around his music. Such protection forms the foundation of a long, sustainable career in a very chaotic and constantly changing industry. Everything starts with a song, but you must protect and nurture that song in order for it to grow.
Matthew T. Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at Nagel@wuestlingandjames.com.
* Articles are primarily educational and do not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
Wednesday, October 21, 2009
MySpace Research
Neilsen Netview recently recent some statistics on MySpace. I think these are intriguing and can provide interesting fuel for marketing fires. Maybe MySpace isn't quite as dead as previously declared. Thanks to Bruce Houghton for the original post.
From comScore Media Metrix
- MySpace Music unique users have grown 169% since launch in September 2008 and1472%, year-over-year
- The site has nearly tripled its unique users since launch
- 12 -17 year olds are 2.3 times more likely than the average net user to visit MySpace Music
- People age 18 - 24 year olds are 2.2 times more likely than the average net user to visit MySpace Music
From comScore Media Metrix
- MySpace Music is the #1 site in time spent for the 18-34 demographic
- The site is #2 in total unique users
- MySpace Music has 18.95 million monthly unique users
Monday, October 19, 2009
Facebook vs. MySpace
If you have not already shifted your thinking about the big social networking sites, HitWise has released new statistics that should give you food for thought.
Facebook accounted for 58.59% of all U.S. visits to the top 155 social networking Web sites in September of this year - a 194% increase since September 2008.
MySpace came in second with 30% of all social networking activity.
Twitter grew 1170% in the last year, but it still accounts for only 1.84% of all social networking traffic.
Tagged.com grew 47% in the last year to stay ahead of Twitter with 2.38% of social traffic.
Facebook accounted for 58.59% of all U.S. visits to the top 155 social networking Web sites in September of this year - a 194% increase since September 2008.
MySpace came in second with 30% of all social networking activity.
Twitter grew 1170% in the last year, but it still accounts for only 1.84% of all social networking traffic.
Tagged.com grew 47% in the last year to stay ahead of Twitter with 2.38% of social traffic.
Friday, October 16, 2009
Distribution Models
A common question that many potential clients pose is "How can I get my music out there and make a few bucks in the process."
As a publishing company for independent musicians, a major part of S&E Entertainment's job is distributing our clients' music through various channels to maximize exposure and income. The music industry refers to each of these channels as a "revenue stream." Notably, a "revenue stream" is not just limited to the distribution of music but can also include merchandising, licensing, and sponorshops.
The current distribution models:
Legacy Sales. This distribution channel consists of physical goods such as CDs, cassette tapes, and vinyl records. It is slightly strange to refer to CD sales as "legacy," but some reports put online music sales at 95% of the market share. Although most independent artists still sell mos tof their music face-to-face, it is a very small amount of total sales. Notably, in terms of dollars, CD sales still exceed digital downloads. The Beatles recent physical release shows the ability of the CD to still bring in money.
Digital Sales. Without a doubt, online sales of digital singles accounts for the majority of music today. Apple and iTunes own 2/3 of the market, with Amazon, eMusic, and a few other services offering MP3 sales to fans. The bottom-line: if you are not on iTunes, you are missing out on 2/3 of the people who might have bought a track.
On Demand Straming. Several websites offer this service to its visitors, wherein the website buys a license from the artists and then allows the visitors to listen to the music. Importantly, people cannot download the tracks, but it is free to listen or involves a small fee for premium services. Spotify is one of the main players in this type of distribution channel.
Paid Subscription. Through services like Rhapsody and Napster, consumers can pay a monthly subscription and either stream or download as much music as they want. In exchange, the service pays the artists a fraction of the consumer's subscription fee. Interestingly, Spotify has started a freemium business model in this distribution channel, but little information is available yet as to its success.
Internet Radio. A new royalty rate agreement set the standards for internet radio stations in the summer of 2009. Basically, the radio stations pay a licensing fee for each song and/or catalog that they play online and visitors tune in for free. Artists recoup a fraction of the licensing fee, usually through their performing rights association affiliation.
As a publishing company for independent musicians, a major part of S&E Entertainment's job is distributing our clients' music through various channels to maximize exposure and income. The music industry refers to each of these channels as a "revenue stream." Notably, a "revenue stream" is not just limited to the distribution of music but can also include merchandising, licensing, and sponorshops.
The current distribution models:
Legacy Sales. This distribution channel consists of physical goods such as CDs, cassette tapes, and vinyl records. It is slightly strange to refer to CD sales as "legacy," but some reports put online music sales at 95% of the market share. Although most independent artists still sell mos tof their music face-to-face, it is a very small amount of total sales. Notably, in terms of dollars, CD sales still exceed digital downloads. The Beatles recent physical release shows the ability of the CD to still bring in money.
Digital Sales. Without a doubt, online sales of digital singles accounts for the majority of music today. Apple and iTunes own 2/3 of the market, with Amazon, eMusic, and a few other services offering MP3 sales to fans. The bottom-line: if you are not on iTunes, you are missing out on 2/3 of the people who might have bought a track.
On Demand Straming. Several websites offer this service to its visitors, wherein the website buys a license from the artists and then allows the visitors to listen to the music. Importantly, people cannot download the tracks, but it is free to listen or involves a small fee for premium services. Spotify is one of the main players in this type of distribution channel.
Paid Subscription. Through services like Rhapsody and Napster, consumers can pay a monthly subscription and either stream or download as much music as they want. In exchange, the service pays the artists a fraction of the consumer's subscription fee. Interestingly, Spotify has started a freemium business model in this distribution channel, but little information is available yet as to its success.
Internet Radio. A new royalty rate agreement set the standards for internet radio stations in the summer of 2009. Basically, the radio stations pay a licensing fee for each song and/or catalog that they play online and visitors tune in for free. Artists recoup a fraction of the licensing fee, usually through their performing rights association affiliation.
Tuesday, October 13, 2009
21st Century Business - Freemium Model
This blog will highlight some of the ideas and techniques that have worked for some bands in the music industry in the very recent past. My purpose is not to deride or encourage any one particular idea, but merely highlight what has worked for some and what may work for you. First - the freemium business model.
Generally, a business model is a framework or structure that a company establishes to place a value on its goods and services and then exchange those same goods and services for the established value from consumers. In short - a business model is a plan to sell your stuff to people that want to buy it.
The traditional business model in the music industry is selling recorded music on a medium that consumers can then listen to at home, and then supplement this product with related merchandise, live performances, and access to the artists. In the last 10 years the medium has shifted from physical goods like cassette tapes and CDs to a digital medium - MP3s and Apple's iTunes. While this shift has made music more accessible and portable, it is also more susceptible to theft and piracy. As a result, CD sales are steadily declining, record labels are going out of business or laying peole off (See WMG), and the overflowing well of money that fueled VH1's Behind the Music extravaganzas has run dry.
Under the freemium business model, a business offers its goods or services for free to the consumer. In exchange, tthe consumer provides contact information to the business (email address, phone number, etc.). The business then attempts to form a relationship with the consumer and offer a premium service for a fee.
Fred Wilson coined the term "freemium" in March 2006, saying:
"Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc., then offer premium priced value added services or an enhanced version of your service to your customer base."
You can see the freemium model in use everyday at Pandora and it has been used with great success by Trent Reznor and Radiohead.
The freemium model is a great way for independent artists to gain a larger following and increase their exposure on a national stage. Give an MP3 away in exchange for an email address or hand out a lo-fi version of your latest EP at a major sporting event, with the promise that a higher quality version is available for a small charge at your website or on iTunes. Essentially, the freemium business model is all about giving something away today in hopes of getting something of greater value tomorrow from a consumer that will keep coming back.
Generally, a business model is a framework or structure that a company establishes to place a value on its goods and services and then exchange those same goods and services for the established value from consumers. In short - a business model is a plan to sell your stuff to people that want to buy it.
The traditional business model in the music industry is selling recorded music on a medium that consumers can then listen to at home, and then supplement this product with related merchandise, live performances, and access to the artists. In the last 10 years the medium has shifted from physical goods like cassette tapes and CDs to a digital medium - MP3s and Apple's iTunes. While this shift has made music more accessible and portable, it is also more susceptible to theft and piracy. As a result, CD sales are steadily declining, record labels are going out of business or laying peole off (See WMG), and the overflowing well of money that fueled VH1's Behind the Music extravaganzas has run dry.
Under the freemium business model, a business offers its goods or services for free to the consumer. In exchange, tthe consumer provides contact information to the business (email address, phone number, etc.). The business then attempts to form a relationship with the consumer and offer a premium service for a fee.
Fred Wilson coined the term "freemium" in March 2006, saying:
"Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc., then offer premium priced value added services or an enhanced version of your service to your customer base."
You can see the freemium model in use everyday at Pandora and it has been used with great success by Trent Reznor and Radiohead.
The freemium model is a great way for independent artists to gain a larger following and increase their exposure on a national stage. Give an MP3 away in exchange for an email address or hand out a lo-fi version of your latest EP at a major sporting event, with the promise that a higher quality version is available for a small charge at your website or on iTunes. Essentially, the freemium business model is all about giving something away today in hopes of getting something of greater value tomorrow from a consumer that will keep coming back.
Monday, October 12, 2009
Copyrights - Joint Works
With A Little Help From My Friends
Great songs come from many places of inspiration, mixing and intertwining any number of themes and emotions. With the exception of the solo singer/songwriter, great songs come from bands with a story to tell. Often one band member will write lyrics about an event in his life, another musician will compose a guitar riff, and everyone else contributes with their own instruments or talents. Bit by bit, a song emerges from their individual efforts. You know the song becomes copyrighted as soon as it is written down and/or recorded, but who owns the copyright when everyone helps create it?
Luckily the U.S. Copyright laws anticipated this situation and defined a “joint work” as an artistic work created by two or more people with the intention that their independent contributions be merged into one complete work. The individual parts can be copyrighted by themselves, but they achieve the intended result when combined. The artists must also have the intent for their contributions to be merged together. This “joint work” rule works for music, drawings, and other artwork. Basically, this means when people work on something together, it is called a “joint work” and they all own a piece of the copyright for that work.
For example, the hypothetical St. Louis band Minotaur is releasing their debut album and need some artwork for the album cover. They contact a local artist, Jim, who agrees to create a design for the album; he asks his friend Jack to help. Jim and Jack split the responsibilities of the album artwork, and they create a masterpiece depicting Minotaur on stage. Most certainly, they both have created independent copyrighted works, with Jim drawing the band members and Jack drawing the adoring crowd. However, Jim and Jack had the necessary intent to join their works together to make a “joint work” for the album cover. Here is where things get tricky.
Jim and Jack own the copyright for the Minotaur album cover together as co-authors. Each of them has the full rights of a single author, i.e. they can perform, copy, reproduce, and license the artwork. The interesting part is neither needs the other co-authors permission to exercise his rights, so long as he properly accounts for any income received related to the work (more on this below). In this case, Jim can license the artwork to Minotaur without getting Jack’s permission. No matter how much Jack hates the band, he cannot stop them from using his joint work, since they got permission from his co-author Jim (assuming that Jim is giving Jack his fair share of the profits). Further complicating the situation, the copyright in a joint work is transferable, so one co-author can sell his part to a third party, or if he dies, the copyright passes to his heirs. Basically, this means you could be stuck in a situation where someone you do not know, and may not like, has permission to use your work. This situation also applies to music and is the reason a band can continue performing a song long after a member leaves the group.
The keys to using a joint work are that a fair accounting must be paid to all co-authors and the use is non-exclusive. In the example above, Jim must share any money he receives from Minotaur with Jack – 50/50. Further, he cannot completely give away the artwork, as he only owns a part of the joint work, which means he cannot give Minotaur an exclusive license to use the cover art, opening the door for Jack to license the exact same artwork to another band.
To ensure your rights are protected, you should have a written contract before creating something with another person. This includes writing a song, recording a track, or creating a logo. The agreement can address almost any issue, but at the very least should touch upon who owns the work, who has the right to use the copyrights associated with the work, who can license or transfer the work, and how profits from the work are divided. For bands, these are issues that can be included in your LLC Operating Agreement. Copyrights can be a very tricky area of the law, but are essential to protecting your rights in your work. Joint works and the rights of co-authors are more detailed and complicated this article can cover, but an entertainment attorney can assist you in navigating these issues and help you understand how to maximize the protections available to you and your art.
Matthew Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at Nagel@wuestlingandjames.com.
* This article is primarily educational and does not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
Great songs come from many places of inspiration, mixing and intertwining any number of themes and emotions. With the exception of the solo singer/songwriter, great songs come from bands with a story to tell. Often one band member will write lyrics about an event in his life, another musician will compose a guitar riff, and everyone else contributes with their own instruments or talents. Bit by bit, a song emerges from their individual efforts. You know the song becomes copyrighted as soon as it is written down and/or recorded, but who owns the copyright when everyone helps create it?
Luckily the U.S. Copyright laws anticipated this situation and defined a “joint work” as an artistic work created by two or more people with the intention that their independent contributions be merged into one complete work. The individual parts can be copyrighted by themselves, but they achieve the intended result when combined. The artists must also have the intent for their contributions to be merged together. This “joint work” rule works for music, drawings, and other artwork. Basically, this means when people work on something together, it is called a “joint work” and they all own a piece of the copyright for that work.
For example, the hypothetical St. Louis band Minotaur is releasing their debut album and need some artwork for the album cover. They contact a local artist, Jim, who agrees to create a design for the album; he asks his friend Jack to help. Jim and Jack split the responsibilities of the album artwork, and they create a masterpiece depicting Minotaur on stage. Most certainly, they both have created independent copyrighted works, with Jim drawing the band members and Jack drawing the adoring crowd. However, Jim and Jack had the necessary intent to join their works together to make a “joint work” for the album cover. Here is where things get tricky.
Jim and Jack own the copyright for the Minotaur album cover together as co-authors. Each of them has the full rights of a single author, i.e. they can perform, copy, reproduce, and license the artwork. The interesting part is neither needs the other co-authors permission to exercise his rights, so long as he properly accounts for any income received related to the work (more on this below). In this case, Jim can license the artwork to Minotaur without getting Jack’s permission. No matter how much Jack hates the band, he cannot stop them from using his joint work, since they got permission from his co-author Jim (assuming that Jim is giving Jack his fair share of the profits). Further complicating the situation, the copyright in a joint work is transferable, so one co-author can sell his part to a third party, or if he dies, the copyright passes to his heirs. Basically, this means you could be stuck in a situation where someone you do not know, and may not like, has permission to use your work. This situation also applies to music and is the reason a band can continue performing a song long after a member leaves the group.
The keys to using a joint work are that a fair accounting must be paid to all co-authors and the use is non-exclusive. In the example above, Jim must share any money he receives from Minotaur with Jack – 50/50. Further, he cannot completely give away the artwork, as he only owns a part of the joint work, which means he cannot give Minotaur an exclusive license to use the cover art, opening the door for Jack to license the exact same artwork to another band.
To ensure your rights are protected, you should have a written contract before creating something with another person. This includes writing a song, recording a track, or creating a logo. The agreement can address almost any issue, but at the very least should touch upon who owns the work, who has the right to use the copyrights associated with the work, who can license or transfer the work, and how profits from the work are divided. For bands, these are issues that can be included in your LLC Operating Agreement. Copyrights can be a very tricky area of the law, but are essential to protecting your rights in your work. Joint works and the rights of co-authors are more detailed and complicated this article can cover, but an entertainment attorney can assist you in navigating these issues and help you understand how to maximize the protections available to you and your art.
Matthew Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at Nagel@wuestlingandjames.com.
* This article is primarily educational and does not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
Thursday, October 1, 2009
Copyrights: Your Sword and Shield
Copyright: Your Sword and Your Shield
Perhaps more than any other element in the overlap between business and art that happens in music, the nature and application of copyrights has spawned endless urban legends and confusion amongst musicians. Copyrights are absolutely essential to an artist being able to assert his rights and ownership over his own art, but few truly understand how they work. Once and for all, let’s put the myths to rest and outline the basics of what copyrights are, how an artist obtains one, and why they matter in the first place.
What The Heck Are Copyrights?
Since cavemen first picked up rocks, mankind has asserted ownership over things – i.e. property. A person’s property includes things like houses, cars, instruments, and his other personal belongings. However, centuries ago people realized that they also own things that cannot be picked up or touched. These intangible pieces of property are just as real as a rock or a car, but you cannot necessarily hold them in your hand, such as logos, an arrangement of musical notes, and the goodwill of a fan. Such items are called intellectual property. Copyrights are a type of intellectual property that a person can own, sell, transfer, and use. Most importantly for musicians, copyrights are the first line of defense in protecting their art and provide the surest way to punish those that would steal that art.
When applied to an artist work like a song, the term “copyright” actually encompasses a bundle of different rights, such as:
• the right to reproduce the work (copy it);
• the right to distribute the work (sell it or give it away);
• the right to display the work;
• the right to perform the work; and
• the right to make derivative works (change it into something new or sample).
Under the law, a copyright vests when an artist fixes an original work in a tangible medium of expression. This legal jargon means that all of the rights and abilities described above are owned by an artist when he makes something new and puts in a form that other people can experience. This could be a new story written down on a piece of paper, a new song recorded on a CD or in a digital file, or even a doodle on the side of the page. Notably, copyrights do not protect ideas, names, logos, and information that is not new. They are intended to protect an individual’s expression of an idea in the medium of his or her choosing.
How Do I Get A Copyright?
A copyright is created at the moment it is fixed, i.e. written down, recorded, printed, etc.. For musicians, the moment that a musical note is recorded or transcribed on a page and the lyrics are written down, a copyright is created. That copyright is owned by whoever created it. A common myth is that the musician needs to mail a copy of the words or a CD to himself and never open the envelope. But, as just discussed, the copyright is created and ownership assigned instantly. Notably, neither the myth nor the reality actually registers the copyright, which is examined later in this article.
A copyright notice is used to tell the world that you are claiming this particular work, be it a song, a painting, etc.. The most common notice is the ©, but for a sound recording, an artist should use ℗. Although it is not necessary to add these symbols for anything created after 1989, they add an additional layer of protection. They take the form:
© year of 1st publication. Owner. All rights reserved.
For instance, when I publish this article, I will add to the bottom:
© 2009. Matthew Nagel. All rights reserved.
Obtaining a copyright for a book or a painting should now seem pretty straightforward – just let your creativity take over and put those ideas down on paper. However, music is a little trickier. A recorded song contains three separate bundles of copyrights: the lyrics, the music, and the sound recording of the lyrics and music together. The rights to copy, distribute, display, perform, and change goes along with each separate bundle, and each bundle can be individually sold or licensed. All of these different rights can produce different revenue streams for the musician. Further, understanding the distinction between the three is important for selling, promoting, and of course registering the songs.
For example, the St. Louis rock band Minotaur just wrote a song called “The Maze” and recorded it at Electric Village Studios. Minotaur owns the copyright in the lyrics to the song. It also owns the music that the band wrote for the song. Finally, it owns the copyright to the sound recording made at Electric Village that encompasses their performance of the lyrics and music together. If Minotaur wants to, it can sell the copyright to the words, release the copyright to the music into the public domain for anyone to use free of charge, and collect license royalties from the sound recording.
What Can I Do With My Copyrights?
In the music business, a copyright is the Holy Grail. A valid, enforceable copyright is the source from which sources of income flow. As Minotaur found out, musicians can copy and distribute the copyright (selling the songs to the public), you can let others perform your songs for a fee (cover song royalties and mechanical royalties), and even sell the copyright or part of it. Television and movies pay for licenses to use the copyrighted songs on their shows, while record labels and publishing companies may buy all the copyrights to a song from the songwriters. These are just a few ways that musicians can use their copyrights, and the opportunities to commercially exploit the bundle of rights and abilities granted within a copyright are continually being expanded in new, creative ways.
While everything reviewed in this article can be accomplished without registering your copyright with the government, full copyright protection requires registration. Registration has two main benefits: the shield and the sword. When a musician registers his copyright with the United States Copyright Office (www.copyright.gov), it is like planting a flag in the sand, claiming that particular piece of property and warning away all comers. In short, it announces to the world which musician owns that particular song and informs all other musicians that this particular song already has an owner. This process acts as a shield, protecting the copyright owner from people who would have never known that arrange or verse had already been claimed. However, registration also acts as a sword, allowing the copyright holder to punish those who would steal his song by filing a lawsuit. Registering the song allows him to win statutory damages and attorney’s fees in addition to the actual damages he suffered and forces the infringer to hand over all the profits made from your property.
A full discussion of royalties, registration, and other details of copyrights are beyond the scope of this article. There are also other aspects of copyright law that are extremely relevant to musicians like co-authorship, works made for hire, and the registration requirements for songs and albums. An entertainment attorney can help you to analyze your copyrights, decide who owns the copyrights, and navigate the registration process. In short, once you understand the true extent and value of your property (that you may have never realized you owned), you can begin maximizing the full potential of that property and open up new doors for your career.
Matthew T. Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at Nagel@wuestlingandjames.com.
* Articles are primarily educational and do not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
Perhaps more than any other element in the overlap between business and art that happens in music, the nature and application of copyrights has spawned endless urban legends and confusion amongst musicians. Copyrights are absolutely essential to an artist being able to assert his rights and ownership over his own art, but few truly understand how they work. Once and for all, let’s put the myths to rest and outline the basics of what copyrights are, how an artist obtains one, and why they matter in the first place.
What The Heck Are Copyrights?
Since cavemen first picked up rocks, mankind has asserted ownership over things – i.e. property. A person’s property includes things like houses, cars, instruments, and his other personal belongings. However, centuries ago people realized that they also own things that cannot be picked up or touched. These intangible pieces of property are just as real as a rock or a car, but you cannot necessarily hold them in your hand, such as logos, an arrangement of musical notes, and the goodwill of a fan. Such items are called intellectual property. Copyrights are a type of intellectual property that a person can own, sell, transfer, and use. Most importantly for musicians, copyrights are the first line of defense in protecting their art and provide the surest way to punish those that would steal that art.
When applied to an artist work like a song, the term “copyright” actually encompasses a bundle of different rights, such as:
• the right to reproduce the work (copy it);
• the right to distribute the work (sell it or give it away);
• the right to display the work;
• the right to perform the work; and
• the right to make derivative works (change it into something new or sample).
Under the law, a copyright vests when an artist fixes an original work in a tangible medium of expression. This legal jargon means that all of the rights and abilities described above are owned by an artist when he makes something new and puts in a form that other people can experience. This could be a new story written down on a piece of paper, a new song recorded on a CD or in a digital file, or even a doodle on the side of the page. Notably, copyrights do not protect ideas, names, logos, and information that is not new. They are intended to protect an individual’s expression of an idea in the medium of his or her choosing.
How Do I Get A Copyright?
A copyright is created at the moment it is fixed, i.e. written down, recorded, printed, etc.. For musicians, the moment that a musical note is recorded or transcribed on a page and the lyrics are written down, a copyright is created. That copyright is owned by whoever created it. A common myth is that the musician needs to mail a copy of the words or a CD to himself and never open the envelope. But, as just discussed, the copyright is created and ownership assigned instantly. Notably, neither the myth nor the reality actually registers the copyright, which is examined later in this article.
A copyright notice is used to tell the world that you are claiming this particular work, be it a song, a painting, etc.. The most common notice is the ©, but for a sound recording, an artist should use ℗. Although it is not necessary to add these symbols for anything created after 1989, they add an additional layer of protection. They take the form:
© year of 1st publication. Owner. All rights reserved.
For instance, when I publish this article, I will add to the bottom:
© 2009. Matthew Nagel. All rights reserved.
Obtaining a copyright for a book or a painting should now seem pretty straightforward – just let your creativity take over and put those ideas down on paper. However, music is a little trickier. A recorded song contains three separate bundles of copyrights: the lyrics, the music, and the sound recording of the lyrics and music together. The rights to copy, distribute, display, perform, and change goes along with each separate bundle, and each bundle can be individually sold or licensed. All of these different rights can produce different revenue streams for the musician. Further, understanding the distinction between the three is important for selling, promoting, and of course registering the songs.
For example, the St. Louis rock band Minotaur just wrote a song called “The Maze” and recorded it at Electric Village Studios. Minotaur owns the copyright in the lyrics to the song. It also owns the music that the band wrote for the song. Finally, it owns the copyright to the sound recording made at Electric Village that encompasses their performance of the lyrics and music together. If Minotaur wants to, it can sell the copyright to the words, release the copyright to the music into the public domain for anyone to use free of charge, and collect license royalties from the sound recording.
What Can I Do With My Copyrights?
In the music business, a copyright is the Holy Grail. A valid, enforceable copyright is the source from which sources of income flow. As Minotaur found out, musicians can copy and distribute the copyright (selling the songs to the public), you can let others perform your songs for a fee (cover song royalties and mechanical royalties), and even sell the copyright or part of it. Television and movies pay for licenses to use the copyrighted songs on their shows, while record labels and publishing companies may buy all the copyrights to a song from the songwriters. These are just a few ways that musicians can use their copyrights, and the opportunities to commercially exploit the bundle of rights and abilities granted within a copyright are continually being expanded in new, creative ways.
While everything reviewed in this article can be accomplished without registering your copyright with the government, full copyright protection requires registration. Registration has two main benefits: the shield and the sword. When a musician registers his copyright with the United States Copyright Office (www.copyright.gov), it is like planting a flag in the sand, claiming that particular piece of property and warning away all comers. In short, it announces to the world which musician owns that particular song and informs all other musicians that this particular song already has an owner. This process acts as a shield, protecting the copyright owner from people who would have never known that arrange or verse had already been claimed. However, registration also acts as a sword, allowing the copyright holder to punish those who would steal his song by filing a lawsuit. Registering the song allows him to win statutory damages and attorney’s fees in addition to the actual damages he suffered and forces the infringer to hand over all the profits made from your property.
A full discussion of royalties, registration, and other details of copyrights are beyond the scope of this article. There are also other aspects of copyright law that are extremely relevant to musicians like co-authorship, works made for hire, and the registration requirements for songs and albums. An entertainment attorney can help you to analyze your copyrights, decide who owns the copyrights, and navigate the registration process. In short, once you understand the true extent and value of your property (that you may have never realized you owned), you can begin maximizing the full potential of that property and open up new doors for your career.
Matthew T. Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at Nagel@wuestlingandjames.com.
* Articles are primarily educational and do not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
Friday, September 18, 2009
Us In The News
Missouri Lawyer's Weekly did a short article on S&E Entertainment's Matt Nagel. You can read the article here:
Lawyer Taps Passion For Music-Soccer
Lawyer Taps Passion For Music-Soccer
Thursday, September 17, 2009
Music As A Business
I stumbled across this article by Bruce Houghton. It speaks complete truth and highlights one of things that we push at S&E Entertainment.
"How can I make music when I'm expected to spend all my time on Twitter and Facebook?"
I'm sorry if this comes as a surprise, but it has never been enough to just make great music. Every generation of musicians has had to face their own challenges which forced them to go beyond creation and recording.
Frank Sinatra made movies to reach a bigger fan base. Elvis's hips and haircut were as much a part of his success as his recordings were. David Bowie learned that image and imagery could propel him to greater heights. After Saturday Night Fever, dance steps helped propel many live shows and for a time MTV made being visual an important component of success.
Whether it's getting in a van and giving an endless string of memorable performances or sitting on the phone for hours talking to journalists, there have always been skills beyond just making music that, if not required, certainly made success more likely.
So when Amanda Palmer tweets her latest exploits and Imogen Heap spends hours answering questions in a forum, they are just doing a modern version - their own version - of costumes, haircuts and dance lessons.
Great music is where it all begins and ends, but in between the path to success is always changing.
- Bruce Houghton
"How can I make music when I'm expected to spend all my time on Twitter and Facebook?"
I'm sorry if this comes as a surprise, but it has never been enough to just make great music. Every generation of musicians has had to face their own challenges which forced them to go beyond creation and recording.
Frank Sinatra made movies to reach a bigger fan base. Elvis's hips and haircut were as much a part of his success as his recordings were. David Bowie learned that image and imagery could propel him to greater heights. After Saturday Night Fever, dance steps helped propel many live shows and for a time MTV made being visual an important component of success.
Whether it's getting in a van and giving an endless string of memorable performances or sitting on the phone for hours talking to journalists, there have always been skills beyond just making music that, if not required, certainly made success more likely.
So when Amanda Palmer tweets her latest exploits and Imogen Heap spends hours answering questions in a forum, they are just doing a modern version - their own version - of costumes, haircuts and dance lessons.
Great music is where it all begins and ends, but in between the path to success is always changing.
- Bruce Houghton
The Decline of MySpace
This article is copied from HypeBot.com. You can read the full article here:
http://www.hypebot.com/hypebot/2009/09/the-steady-decline-of-myspace.html
MySpace's sloppy layouts and big brother corporate ownership has made it an easy target. But its hard to deny that for the last few years MySpace has been one of the most useful sites for garnering new fans and general band to fan interaction.
But things are changing. Slowly but steadily page views and unique visitors to MySpace are dropping even as the numbers at Facebook, YouTube and elsewhere continue to grow. The August auto-tune shut-off may have contributed to the decline in MySpace stats, but the reasons behind the decline go much deeper.
Others on the web are evolving and messy old MySpace is struggling to catch up with the comparison to Facebook the most dramatic. But even without comparisons, MySpace traffic fell 6.73% last month according to Compete and a total of 22% over the last three months according to Alexa measurements
http://www.hypebot.com/hypebot/2009/09/the-steady-decline-of-myspace.html
MySpace's sloppy layouts and big brother corporate ownership has made it an easy target. But its hard to deny that for the last few years MySpace has been one of the most useful sites for garnering new fans and general band to fan interaction.
But things are changing. Slowly but steadily page views and unique visitors to MySpace are dropping even as the numbers at Facebook, YouTube and elsewhere continue to grow. The August auto-tune shut-off may have contributed to the decline in MySpace stats, but the reasons behind the decline go much deeper.
Others on the web are evolving and messy old MySpace is struggling to catch up with the comparison to Facebook the most dramatic. But even without comparisons, MySpace traffic fell 6.73% last month according to Compete and a total of 22% over the last three months according to Alexa measurements
Wednesday, September 9, 2009
Duck and Cover - LLC for Musicians
Duck and Cover
A generation grew up practicing “duck and cover” in the 1950’s at school to protect themselves in the event of a nuclear attack. After you saw the flash of a nuclear weapon, you were to assume the fetal position, lying face-down and covering their heads with their arms … hoping this would save them from Armageddon. Sometimes the plan is not very good (i.e. ducking and covering from a nuclear blast), but other preventative measures are a must and can bring immediate benefits. As an attorney, I am trained to imagine the worst possible scenario and obsess about it coming true, and part of my job is to prevent bad things from happening to my clients in the first place. Whether musicians realize it or not, danger lurks around every corner and the potential to lose everything threatens every time you leave your house.
That may be slightly overdramatic, but the music industry can be a very scary place, as an artist tries to avoid lawsuits, maximize his exposure, and figure out little things with very big consequences – like taxes. However, many of these issues can be taken care of at the same time with a fairly simple procedure: form a Limited Liability Company (LLC). An LLC is a business form that provides limited personal liability and flexible tax benefits without the difficulty of managing a corporation. It is perfect for organizations like bands.
For example the newly formed band Minotaur is getting ready for its first gig at Mom’s Music Club in gorgeous Millstadt, Illinois. Part of the stage show involves pyrotechnics, and during the first song a flash-pot misfires and catches a curtain on fire. The resulting inferno destroys the venue and a ball of fire shoots from the blaze onto the band’s tour van, knocking the van on top of a very expensive row of cars. The lawyers have a field day, filing lawsuits against the four band members. Every member of the band ends up losing his instrument, his car, and his house while destroying his credit and forcing him into bankruptcy.
If Minotaur spent a small amount of money on the filing fee and about an hour of their time, they could have formed an LLC to avoid the situation; an ounce of prevention could have saved their personal lives. Mom’s and the car owners could not sue the individual members of the band – they could only sue Minotaur, LLC. Since the band members were acting in the course of their employment with the LLC, then a lawsuit can only seek the LLC’s assets – not the personal assets of the members. In this case, the LLC would have some money (either contributed from the band members or from getting paid to play), and the tour van should also be owned by the LLC. Just like any other business, an LLC can own things because it is an entity on its own. It can also make and borrow money, sell items, carry insurance, sue and be sued. Importantly, an LLC does not protect its members from intentional acts.
An LLC can be formed very quickly, but with a little forethought, almost any problem a band can face can be handled within the LLC. For instance, a barebones LLC in Missouri only requires filing a one page form with the secretary of state. However, you can also file an Operating Agreement for the LLC, which governs how the business (i.e. the band) will run. I highly recommend addressing, at a minimum, the following situations within an operating agreement:
This list only scratches the surface of possible issues that can arise in the course of running a business, and do not think for a moment that a band is anything less. Forming an LLC provides a musician the greatest possible protection from creditors and mishaps, while allowing the greatest flexibility in how things really work within a band. Solo performers can reap the same benefits from an LLC, although they have fewer issues to address within the operating agreement. It is highly recommended that you consult with an entertainment attorney when preparing your LLC, as he can guide your group through the finer points of the paperwork that are relevant to a musician’s specialized needs.
Matthew Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at matt@sne-entertainment.com
* This article is primarily educational and does not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
A generation grew up practicing “duck and cover” in the 1950’s at school to protect themselves in the event of a nuclear attack. After you saw the flash of a nuclear weapon, you were to assume the fetal position, lying face-down and covering their heads with their arms … hoping this would save them from Armageddon. Sometimes the plan is not very good (i.e. ducking and covering from a nuclear blast), but other preventative measures are a must and can bring immediate benefits. As an attorney, I am trained to imagine the worst possible scenario and obsess about it coming true, and part of my job is to prevent bad things from happening to my clients in the first place. Whether musicians realize it or not, danger lurks around every corner and the potential to lose everything threatens every time you leave your house.
That may be slightly overdramatic, but the music industry can be a very scary place, as an artist tries to avoid lawsuits, maximize his exposure, and figure out little things with very big consequences – like taxes. However, many of these issues can be taken care of at the same time with a fairly simple procedure: form a Limited Liability Company (LLC). An LLC is a business form that provides limited personal liability and flexible tax benefits without the difficulty of managing a corporation. It is perfect for organizations like bands.
For example the newly formed band Minotaur is getting ready for its first gig at Mom’s Music Club in gorgeous Millstadt, Illinois. Part of the stage show involves pyrotechnics, and during the first song a flash-pot misfires and catches a curtain on fire. The resulting inferno destroys the venue and a ball of fire shoots from the blaze onto the band’s tour van, knocking the van on top of a very expensive row of cars. The lawyers have a field day, filing lawsuits against the four band members. Every member of the band ends up losing his instrument, his car, and his house while destroying his credit and forcing him into bankruptcy.
If Minotaur spent a small amount of money on the filing fee and about an hour of their time, they could have formed an LLC to avoid the situation; an ounce of prevention could have saved their personal lives. Mom’s and the car owners could not sue the individual members of the band – they could only sue Minotaur, LLC. Since the band members were acting in the course of their employment with the LLC, then a lawsuit can only seek the LLC’s assets – not the personal assets of the members. In this case, the LLC would have some money (either contributed from the band members or from getting paid to play), and the tour van should also be owned by the LLC. Just like any other business, an LLC can own things because it is an entity on its own. It can also make and borrow money, sell items, carry insurance, sue and be sued. Importantly, an LLC does not protect its members from intentional acts.
An LLC can be formed very quickly, but with a little forethought, almost any problem a band can face can be handled within the LLC. For instance, a barebones LLC in Missouri only requires filing a one page form with the secretary of state. However, you can also file an Operating Agreement for the LLC, which governs how the business (i.e. the band) will run. I highly recommend addressing, at a minimum, the following situations within an operating agreement:
• Who owns the band name? Remember the LLC can own the name too.
• How are any profits divided? When are the divided?
• How are royalty rights divided?
• What happens when someone leaves the group?
• How do you add someone to the group? Or remove someone?
• When does the LLC end?
This list only scratches the surface of possible issues that can arise in the course of running a business, and do not think for a moment that a band is anything less. Forming an LLC provides a musician the greatest possible protection from creditors and mishaps, while allowing the greatest flexibility in how things really work within a band. Solo performers can reap the same benefits from an LLC, although they have fewer issues to address within the operating agreement. It is highly recommended that you consult with an entertainment attorney when preparing your LLC, as he can guide your group through the finer points of the paperwork that are relevant to a musician’s specialized needs.
Matthew Nagel is an entertainment attorney at Wuestling & James in St. Louis, Missouri and an adjunct professor at Fontbonne University and Washington University School of Law. If you have questions, you can reach him at matt@sne-entertainment.com
* This article is primarily educational and does not purport to constitute legal advice. No attorney-client relationship is created between the author and any reader of this article. If you have legal concerns or questions be sure to consult with an attorney licensed to practice in your jurisdiction.
Subscribe to:
Posts (Atom)