PRO_Bn_64-65/84 Business
Introduction to Copyright
There is one thing that the music industry relies on more than anything else. It’s not the writing of music, nor is it the playing of music. It’s not a constant stream of new bands exciting customers to part with their money, nor is it the creation of ‘stars’ to help to sell CD and downloads.
The modern music industry could not exist without copyright, because without copyright the music industry would have nothing to sell. But what exactly is copyright, and how does it apply to entrepreneurs in the music world? When was copyright first enshrined in law, how long does copyright exist in music?
What is intellectual property?
Intellectual property is an ‘umbrella’ term that refers to a number of distinct types of legal monopolies over ‘creations of the mind’, both artistic and commercial. Common types of intellectual property include copyrights, trademarks, and patents. Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets, such as musical, literary and artistic works (copyright), discoveries and inventions (patents) and words, phrases, symbols, and designs (trademarks).
What is copyright?
Copyright is the set of exclusive rights that are granted to the author or creator of an original work, such as a songwriter or record company. Copyright is usually but not exclusively granted to the creator of a work of art as opposed to a mechanical engineer. The most important of the rights granted include the right to copy, distribute (often in the form of selling copies) and adapt an original work.
These rights can be licensed, transferred and/or assigned to a company, such as a record company.
How long do these rights last for?
Copyright in recordings lasts for fifty years from the date that the recording was made. Copyright in compositions lasts for seventy years from when the last surviving composer dies. After these periods the work is said to enter the public domain.
Can anything be ‘copyrighted’?
According to Wikipedia, copyright applies to a wide range of works that are substantive and fixed in a medium. What this means is that these rights only exist in works that can be written down, recorded or captured on some medium, so a poem can be ‘copyrighted’ but a thought can’t! Also, the work has to have some ‘worth’, which is a very vague term that can keep lawyers debating for hours over its meaning.
What’s the difference between a copyright and a patent?
A copyright is usually applied to a work of art, whether that be literary, dramatic, a performance or a piece of music. A patent is a different type of exclusive right that is applied to an invention, such as a new kind of car, and is usually granted by a government body on receipt of a design. This is important as you can’t claim a patent on an idea, only the implementation of an idea. The same principle applies to copyright; you don’t have a copyright for the idea of a song, only the actual song itself.
What’s a moral right?
As well as copyright, some countries also recognise ‘moral rights’ of the creator of a work which are separate concepts, such as the artist’s right to be credited for the work. Unfortunately it is very common for an artist to ‘waive’ their moral rights when they sign a record or publishing deal. This is often because the record company cannot guarantee that, for example, the artist will always be credited for their work wherever it is used.
How did copyright begin?
The Statute of Anne, which became law in the UK in 1709 is often cited as the origin of copyright law. It was brought in as an effort by governments to regulate and control the output of printers, a modern invention in the Eighteenth century. It essentially gave governments the ability to control who was printing and distributing what material.
Is copyright the same all over the world?
No. No song or recording is automatically protected worldwide. Each country has its own copyright laws and standards, but there are international treaties which provide copyright protection automatically for all creative works as soon as they are fixed in a medium. The Berne Convention was the first attempt to achieve this and was established in 1886. The Buenos Aires convention was established in 1910 and retained in the Universal Copyright Convention of 1952.
Can I be sent to jail for infringing copyright?
Almost certainly not. Copyright is generally enforced under civil law as it is a property matter and most disputes arise out of the infringement of these rights. However some countries do apply criminal sanctions which can include jail sentences, especially for ‘piracy’.
How do I copyright my work?
Firstly, copyright is not a verb, it’s a noun, you don’t ‘copyright’ anything! Secondly, in the UK (and most of the western world) copyright is granted to an author the moment that the work is recorded in some form. So if you have written a new song and recorded it on a laptop, or written it down on manuscript, you now have the copyright in the composition. It’s as simple as that, there is nothing else that you have to do.
How do I protect my copyright?
There are many conflicting opinions on this matter, please see the handout from the Intellectual Property Office that outlines a typical approach. Unfortunately, in the real world it is close to impossible to protect your copyright unless you are willing and able to employ lawyers and fight court battles to enforce your rights. It’s important to remember that copyright is not intrinsic to your work, it is something that is granted by governments (and enforced by courts), and sadly it can be extremely expensive to pursue someone who you believe has infringed these rights.
Music Publishing
In this week’s session we will be looking at the evolution of music publishing over the centuries, what a publisher is supposed to do for a writer (and what it actually does in reality), and how it’s possible to work as a writer without using a publisher at all.
But first, it’s important to recap on one of the fundamental principles in the music industry; copyright. In every recording you’ve ever heard or bought, there are two copyrights:
- The copyright that exists in the recording
- The copyright that exists in the composition
Music Publishers are companies that are interested in acquiring and exploiting the copyrights in compositions. They don’t sign recording artist per se, they don’t usually make records, shoot videos or commission remixes. They simply sign up writers (who may or may not be recording artists in their own right) and songs, collect the money that’s generated by the use of their songs and occasionally help to place songs in adverts, movies and TV programs.
How did Music Publishing begin?
Music Publishing began in a similar way to how the recording industry began, and only developed into a large scale business with the advent of the printing press in the fifteenth century. Publishers originally simply printed and distributed manuscripts of music, usually church music on a small scale and usually only locally. Through time, and with the development of copyright in the early seventeenth century, publishers expanded their business interests to include not only the duplication of manuscripts but the enforcement and collection of payments from the use of performing rights and mechanical rights.
Manuscripts
Before the invention of the printing press, duplicating manuscripts was a laborious task that required scribes to copy pre-existing works by hand. This meant that large scale distribution of works was difficult and it was unlikely that your work could be copied by an unauthorised scribe. However, the printing press enabled print owners to duplicate manuscripts easily and quickly; initially the legal right to reproduce works in this manner were limited to specified scholars and musicians by the reigning monarch. As copyright enabled the trade and assignment of rights to individuals and companies rather than specific companies with royal assent, the modern market for manuscripts evolved. In the 21st Century, the printing of manuscripts is still an important activity for many publishers.
Performing Rights
Although copyright had existed in compositions and their manuscripts for some time, the legal concept of paying writers the for the use of their work in a theatre did not occur until the eighteenth century in France, where Pierre Beaumarchais, a French musician, inventor and diplomat founded the organisation “Bureau de legislation Dramatique” to which theatres agreed to pay playwrights a portion of their takings to the Society. However, it was not until seventy years later that payments were agreed for composers too.
Mechanical Rights
With the invention of sound recording by Thomas Edison, a new market for recorded music evolved in the early twentieth century. The concept of ‘mechanical rights’, essentially a payment for the use of a composition embodied in a ‘mechanism’ developed.
What does a Publisher do?
The role of a Music Publisher is to collect the monies due to the songwriter for the use of their compositions. This can include payments for:
- Use of songs embodied in recordings sold to the public
- Use of songs embodied in recordings used in commercials
- Use of songs embodied in recordings used in TV programs or Movies
- Use of songs embodied in recordings that are broadcast
- Use of songs performed to the public
The publisher will normally pay an advance to the writer as an incentive for the writer to assign their copyrights to the publisher. The publisher will then control the compositions assigned for a period of time which can be as short as a couple of years to many decades.
The publisher may also be expected to be involved in licensing the compositions for use in commercials, movies and TV shows. When the songs are used in this manner this is known as a ‘sync’, short for the synchronisation of audio and video.
Is it necessary for a writer to use a publisher?
The short answer to this question is no. It’s entirely possible for a writer to avoid working with a publisher and collect the money due to them without a publisher’s help. A writer can join collection societies as a ‘writer member’ and the societies will account to the writer directly.
Performing Rights in the 21st Century
Every time a song is played on radio, every time a song is played on the TV, or in the cinema, or onstage at the theatre, even at a football match, a fee is due to be paid to the composer of the song. As you might imagine, it would be extremely difficult, if not impossible for a composer of a song to collect the money due to them if that involved going round to each and every venue to check whether they had played the composer’s song that week. Instead, composers join collection societies which do this work for them.
What is the PRS?
The PRS is the Performing Right Society, a company formed in 1914 dedicated to collecting the money due to a composer for the performance of their music. ‘Performance’ in this case includes the reproduction of a composition from a recording such as a CD or music file, and so includes the use of a song on a radio program.
Composers join the PRS and give the company a ‘blanket licence’ which enables the PRS to grant rights to venues to use music composed by that composer.
How does the PRS collect money for composers?
Every venue or broadcaster that uses music must apply to the PRS for a licence to reproduce that music for public consumption. The venue or broadcaster pays the PRS a fee, the size of the fee is usually dependant on the amount of people who are likely to hear the music being used in the venue or on the radio station. A small clothes shop or pub is likely to pay a much smaller fee than a radio station.
How does this relate to Music Publishing?
The PRS traditionally accounts directly to the writer of a composition whether or not they have a relationship with a publisher. However, if a writer does have a publishing agreement it is typical for the PRS to pay 50% of the money they collect for the writer directly to the writer’s publisher, paying the remaining 50% to the writer.
It is typical for a publisher to then double their publisher’s share in this payment to account for the fact that they have only received half of the money due for the use of that song. For example:
Publisher’s cut of song ‘x’= 25%
Payment from PRS to publisher for use of song ‘x’= £50 of a total of £100
Publisher is owed £25 for the use of the song, so takes 50% of the sum paid from the PRS (50%x50% of £100 equals 25% of 100% of £100 i.e. £25).
Publishing Contracts
The main terms in a typical recording contract
Every contract is different but each will include some common business terms. Here is your guide to the most important ones:
How many songs am I obliged to write?
Each publishing agreement will specify an amount of songs that the writer agrees to assign to the publisher. This can often be specified as a proportion of songs on a specified album. For example, if a band is signed to a record company and the main writer in a band signs a publishing deal with a publisher, the publisher may agree that a ‘product guarantee’ is fulfilled when the writer has written 70% of the songs on the album.
How many songs could I be obliged to make for the company?
Similar to Recording Agreements, the publisher can decide to continue the agreement for a period of time and retain exclusive rights to any new songs that the writer composes. These are known as ‘options’, and the commencement of each option period will normally trigger the payment of extra advances to the writer.
How do I get paid?
Most publishing deals will include an ‘advance’ which is a payment made to the artist in advance of the royalties the artist will earn when the songs are released in recorded form or played on the radio, TV or in a movie. The writer is usually paid half of the agreed advance when they sign the deal, the other other half when they have fulfilled their ‘product guarantee’.
The agreement will include an agreed royalty rate, often described as a ratio between the writer and the publisher. For example, the agreement might be 70/30, with the composer keeping 70% of the money earned and the publisher retaining 30%.
Can I write for another Publisher while I’m signed?
Usually a publishing deal will be ‘exclusive’, meaning that the composer cannot write for any other publisher during the term of the deal. However, some publishers may simply control the copyrights of specified songs, not the entire work of a writer. In that case the writer will be free to write for other publishers.
What is the territory that the agreement covers?
Most publishers will intend to sign the recording rights of their artist on a worldwide, sometimes universe-wide basis! If this is not the case then the company will specify territories that the agreement covers, such as North America or Europe.
What about 360 deals?
It is becoming increasingly common for Record Companies to control the publishing rights of their signed artists. This has many benefits for the company, as it may enable them to use publishing income to offset the expense of recordings. However, many artists and their managers object to this practice and will often negotiate that the publishing income is not ‘cross-collateralised’.
Publishing Definitions:
Advance: Money paid as a lump sum by a publisher or record company to a writer or artist as an advance payment of royalties due on the sale or exploitation of songs or recordings. This money is recoupable, meaning that in normal circumstances the writer or artist will not be paid further money until the advance has been repaid. Almost every publishing deal will incorporate advances, usually payable on signing of a contract and meeting a minimum release commitment, typically the release of an album or certain number of songs where the signing writer has made a contribution to the writing.
Co-write: The act of two or more writers writing a song together.
Cross-Colateralisation: is a term used when the collateral for one loan is also used as collateral for another loan. In the music industry, this situation could occur if the income generated by the use of a writer’s songs is used to repay the cost of recording that writer’s songs. This often happens when the writer’s publisher is also her record company.
Performance Fees: The money paid to a musician for performing at a gig, on the radio or a TV show etc.
Product Guarantee: It is typical in a publishing contract for the publisher to specify when the writer qualifies for more advances from the publisher. This is normally when their songs are released in a substantial form as described in the agreement, hence product guarantee. It is possible for a writer to work with a publisher for many years without being paid advances as the writer may not have fulfilled her product guarantee through no fault of her own.
Recoupable: In publishing and recording contracts, certain costs that are incurred by the publisher record company must be recovered by exploitation/sales before royalties are paid. These are known as recoupable costs, and typically include the cost of recording an album, half the cost of making a video and the costs associated with touring amongst countless others.
Ringtone: 21st Century Mobile Phones often include the ability to play pre-defined melodies and backing tracks and whole audio files as the sound the phone makes when a call is coming in. A songwriter is paid a predefined sum every time a phone user downloads her song to use in this way
Royalties: Money paid to a writer or artist from the exploitation or sale of songs or recordings. Royalties are typically paid when the recoupable costs
incurred by the publisher or record company have been met, then the writer or artist will be paid a share of the money collected. A common share for a writer in a publishing agreement is 75% of monies collected, 15% is typical for a band in a record deal although both figures can vary enormously.
Song split: An agreement between several parties where the each has agreed how the income from the song is shared.
Track: In song-writing terms, this is the instrumental ‘backing’ to a song.
Top-line: The melody and lyric of a song i.e. the vocal part of a song. This can sometimes include raps and instrumental solos.
Copyright Definitions:
Monopoly: Monopoly is an economic term that describes a situation where one entity (such as a company) has complete or almost complete control over the supply of a good or service into a market.
Asset: Anything that can be owned or controlled to produce value and increases the wealth of an individual or company is an asset e.g. a house.
Intangible asset: Intangible assets are non-monetary (that is property that is not cash or similar) assets that cannot be seen, touched or physically measured. However, these assets must be created through time and effort and are identifiable as a separate asset. An example of an intangible asset could be the ‘know how’ of a team that’s very good at writing songs. However, the ‘happiness’ of an individual or team could not be described as an intangible asset.
Public Domain: When the intellectual property rights in a work have expired the work is said to be in the public domain. In practical terms this means that it is not possible for anybody to ‘own’ these works and they become ‘publicly available’ for anybody to use in whatever way.
Waive: To ‘waive’ means to voluntarily give up certain rights or privileges.
