Music Publishing Quiz 2

Publishing $ for popular music comes primarily from four streams

Performances, Mechanicals, Synchronization, Print and other income

Stephen C Foster is known as

“the father of American music”

Tin Pan Alley

started as a street in NYC where multiple publishing companies set up; 28th Street between 5th and 6th Avenue, where many publishers set up shop in the late 19th century 

After the Civil War

people wanted more pianos which led to a higher demand for sheet music

Large publishing companies based in NYC

HARMS Inc. and M. Witmark and Sons

Music Publishing Association of the United States of America founded in

1895

How did songwriter compensation start in the Tin Pan Alley days?

Songwriters were hired under contracts, gave publishers exclusive rights to music in exchange for salary pay 

Post Industrial Revolution 

Publishers wanted to make money rather than just for the art, “assembly line” style

Plugging

Painists hired by the publishing companies would play songs in music stores in order to sell the sheet music

Payola

publishing companies made deals and arrangements with popular artists at the time to perform songs they wanted to push; now illegal

Music publishers are

rights holders and licensers

Your copyright exists as soon as

you put it down on paper, a computer, recording, etc.

Registering your work gives you

additional rights

Your work has to be … in order for you to go to court and sue someone to infringement 

registered

How many PA copyrights can you have?

one

How many SR copyrights can you have?

multiple

Mechanical royalties

the fee payable for the use of the underlying composition

Performance royalties

relate to the performance of a song ex. Radio, TV, the Internet, etc.

Synch fee/royalty

music with visuals etc. TV shows, movies, commercials

Percentage synch deal

5% of the budget; more popular overseas

Step deal

upfront fee, then bumps/performance awards; every time the movie reaches a certain financial milestone, $5,000 more is paid

Stephen Foster’s popular songs

“Oh Susanna” “Beautiful Dreamer” “My Old Kentucky Home” and “Camptown Races” 

How much did Stephen Foster sell “Oh Susanna” for?

$100

How much did Stephen Foster sell all rights to all future rights for?

$1,900

What does the name “Tin Pan Alley” refer to?

the sound of a bunch of tin pans clanging (multiple pianos playing at once)

When did the Music Publishers Association form?

1895

What did they Music Publishers Association do?

provided a framework for modern performing rights groups 

When did ASCAP (The American Society of Composers, Authors, and Publishers) form?

1914 

Booming

singing the song in big groups in public

copyright

a “copy-right” or “the right to copy”; “Copyright is a legal term used to describe the rights that creators have over their literary and artistic works

Copyright is fully articulated under

Copyright Act of 1976

MFN

Most Favored Nations

What is copyright-able?

Copyright law applies to “creative works” of authors

What types of copyright are protectable?

Literary, musical, dramatic, choreographic, pictorial, audiovisual, sound recordings, architectural, compilations and collective works

When was sheet music added to the US Copyright Act (1790)?

1831

When did sound recordings get their own copyright?

1972

A copyright is vested in the … upon …

author, fixation

author

the person who created the work

Fixation

may be in any state of completion

If only one person created the work, then

that person is the author

If more than one person created it, then

they may be “joint authors”

If it was created as a “work for hire,” then

the employer is the author

COPYRIGHT REGISTRATION

Copyright must be registered in order to bring an infringement lawsuit; If registration pre-infringement: “statutory damages,” “attorney fees”

COPYRIGHT NOTICE ©

It informs the public who claims the work and provides basic information; With notice, infringers cannot claim “innocent infringement” 

**PA**

**Performing Arts (Publishing/Composition)** 

**SR**

**Sound Recording**

Copyright rights

Reproduction, Adaptation/derivation, Distribution, Public performance, Public display, Digital public performance of sound recordings

How long does a copyright last? (Pre - 1978)

copyright lasted two 28 year terms (56 years)

How long does a copyright last? (**Post 1978)**

the life of the author + 70 years. If there were more than one author, then it's the life of the last author to die + 70 years 

What is copyright infringement?

Whenever a third party uses a copyrighted work in a manner that violates one of the owner’s exclusive rights

remedies for copyright infringement

Damages (money), Injustice relief, Possible criminal penalties, If registered pre-infringement, statutory damages/attorney fees

“Copying” boils down to two questions

Did the defendant have “access” to the plaintiff's work?; is there “substantial similarity” between the copyright-able elements of the two works?

What qualifies as fair use

Purpose/character of use; Nature of the copyrighted work; Amount and sustainability of portion used; Effect of use on potential market

PA form is used to register works of the performing arts; two forms

unpublished(registration number beginning with PAu) or published(registration number beginning with PA)

Copyright transfers have to be

in writing

The section 115 compulsory license is

a statutory mechanical license that permits anyone to reproduce and distribute copies or non dramatic musical works, subject to certain conditions.

The conditions of the section 115 license include the following: 

**No first use mechanical license; No audio-visual license; Cover or exact reproduction; No sampling; Payment**

What does the Music Modernization Act (MMA) do?

The MMA revamps secretion 115 of the US Copyright Law

Three main sections of the MMA

Title I - The Musical Works Modernization Act, which creates a blanket license for interactive streaming services, and establishes a mechanical licensing collective (MLC) making it easier for services to obtain licenses and for creators to collect royalties; Title II - The Classics(?????) Protection and Access Act, which created federal rights for owners of sound recordings made before February 15, 1972; The MMA also sets a new “willing buyer/willing seller” rate standard that will require all digital platforms to pay fair market value for mechanical licenses.

What is the Mechanical Licensing Collective (MLC)?

The MLC is a nonprofit organization created in 2019 by the MMA to administer blanket mechanical licenses to eligible digital music services in the US, and to pay the resulting royalties to songwriters, composers, lyricsts, and music publishers 

What kind of royalties does the MLC collect?

This means that the MLC will only collect and pay **mechanical royalties for interactive streaming and downloads** generated by eligible Digital Service Providers (DSPs)

What kind of royalties does the MLC not collect?

Non-interactive streaming (ex. Online radio); Public performances of any kind (ex. Live shows, radio, TV); Audiovisual (ex. Youtube, TikTok, Amazon); Syncs; Lyrics, lyric stickers (ex. Instagram); Physical sales; Any non-US generated usages 

What exactly does the MLC do?

Offer and administer blanket licenses; Collect and distribute royalties payable; Create and maintain a “musical works database”; Coordinate the identification of the owners of rights in a particular musical work or sound recording; Process claims of ownership by authors and composers and manage dispute resolution; Collect the “administrative assessment” charge from the digital music providers; Keep track of “non-blanket license” activity 

Mechanical royalties

The statutory rate is the default rate set by the “Copyright Royalty Board” for reproduction in physical, DPD, and streaming form - “Compulsory licensing”; The compulsory and mechanicals only apply to “audio-only” reproductions. If audiovisual, you need permission

The Copyright Royalty Board is

a US system if three copyright royalty judges who determine rates and terms for copyright statutory licenses and make determinations on distribution of statutory royalties collected by the US Copyright Office of the Library of Congress 

Digital mechanical royalties

Until July 2022, 10.5% rate; July 2022, the CRB upheld the 15.1%; Phono IV pertaining to the years 2023 - 2027 - settlement for certain mechanical streaming rates in the US to gradually increase to 15.35%

Physical mechanical royalties

Also, as a part of Phono IV, the CRB approved rates for physical phonorecord or permanent downloads to 12 cents per track or 2.31 cents per minute of playing time or fraction thereof, for 2023, and includes inflation-based adjustments for subsequent years of the rate period 

Music publishing income streams

Mechanical royalties; Synch fees/royalties; Performance income; Print (and other income)  

What are Controlled Composition Clauses?

Record labels must pay mechanical royalties to their own artists who record their own compositions (just like 3rd party writers); Songs written by the artist are “controlled” compositions

Why do Controlled Composition Clauses exist?

Record labels don't want to pay the full statutory rate to writers they are already paying record royalties to as recording artists; They want artists to agree to a reduced rate (“controlled rate”)

Rates for Controlled Composition Clauses

The rate may be reduced, subjected to song “caps” per-release: 75% of statutory (\~$0.12) x 11 for LPs, 5 for EPs, etc.; But the Copyright Act says digital royalties must be at 100% (streaming and downloads) 

What are performance royalties?

Fees paid for the right to “publicly perform” musical compositions in almost any manner

**Examples:** radio, TV, restaurants, venues, streamings, taxis, webcasting, apps, online games

What do performance royalties cover?

Copyright owners get “performance royalties” (set by gov):

* “Blanket license fees” or % of revenues, paid by establishment, TV/radio stations, website owners, digital service providers… 
* Royalties based on #/prominence of plays 

Who pays for performance royalties?

The party performing the music pays the performing rights organizations (the **“PROs”)** who take a % and pay the rest 50% to the songwriter(s) (the **“writer’s share”**) and share 50% to publisher(s) (the **“publisher’s share”**)

Who are the PROs?

ACAP, BMI, SESAC, GMR

What is the consent decree?

PRO fee calculation is very complex and governed by esoteric laws. ASCAP and BMI’s fees are set by a government “consent decree” (but not SESAC and GMR), according to a set of common-sense factors:

* **Restaurants:** square footage, capacity, live music, cover charges, etc. 
* **Radio:** as of 2017, most pay 1.7% of revenues (public radio is flat fee) 
* **Streaming:** Spotify pays 15.1%, ½ for mechanicals and ½ for the PROs 
* **TV:** a total sum is allocated yearly by market size and # of households 
* **Venues:** size, ticket sales, centrality of music (i.e., frequency, dancing) 

Performance Royalty Calculation

\
* **Radio:** stations submit “playlists”, PROs go and gather sample data (Luminate, Mediabase) 
* **TV:** producers submit “cue sheets”, PROs sift TV schedules and data 
* **Venues:** artists submit “set lists” to their PROs (venue, date, songs…) 
* **Streams:** services submit data RE: # of plays/listeners, time of day

(Note: “subscription” pays higher royalties than “ad supported”)

US Theater Rule:

Theater do not pay PROs for performances of compositions in movies played in the theaters. But when the same film is broadcast or streamed inline or internationally, it does generate performance royalties. 

What is synch income?

Fees paid for a “synchronization license” (i.e. right to sync a song to an A/V work)

**Examples:** films, TV shows, ads, film trailers, YouTube, video games, apps, web ads, cover videos… 

What does a sync fees

“sync fees” are generally paid up front 

* A “fee” is a flat amount payable at once; sync fees vary from “gratic” to millions 
* Specific media types and featured used, in general, tend to pay higher sync fees 
* Negotiated based on “free market” rato 

“Sync or micro sync royalties” may be paid (YouTube)
* A “royalty” is a % of sales prices/revenge (mechanical and performance) 

Who pays for sync fees?

The party syncing music (film/TV producer, network, game developer) pays writer/publisher. Youtube has licenses with most publishers for most music 

Sync License Terms

\
* **Project:** name of production, parties, specific scenes, air dates, etc.
* **Subject rights:** which musical composition does the license cover (masters for a master use license); what % does the licensor own/administer 
* **Duration:** varies from 1 year (or less) tp “perpetuity” (i.e. forever); if limited in duration, fee needs to be repaid to renew/extend license 
* **Territory:** can be limited to region(s), state(s), countries or “universe” 
* **Fees:** most fees are agreed on a “most favored nations” basis (I.e equal) with the master or to similar syncs in the work 
* **Use:** approved “media” (TV, digital, etc.) “scene description”; maybe soundtrack rights; edits/alterations ok? VV (visual vocal), VI (visual instrumental), BI (background instrumental i.e. classical music playing in the background) BV (background vocal i.e. vocal music playing in the background) , etc. 

Print income

\
* Physical print and digital print (Genius, Spotify)
* Grants rights to reproduce a song in printed form 
* Used for merch, lyric books, tabs, posters, etc. 

Difference between personality and mixed folios:

\
* Personality: a collection of songs from one writer or artist 
* Mixed: a collection of of songs from different songwriters

Grand rights

\
* The rights for music to be used in a production 
* Need to be licensed directly by the publisher 
* Similar to a sync license, but the fee is almost always based on a percentage of box office revenue

2021 industry revenue breakdown

Largest type of publishing income: performance; performance makes up 51% 

2nd largest: sync; 25.8% 

3rd largest: mechanical; 18.5%

Miscellaneous: 4.5%?

Compulsory license

* You get one for a song that’s already been released.


* Has a statutory rate 

How to differentiate between performance and transcription license:

* Performance vs song with ad or something else
* Transcription license: like a sync license but for radio