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Klickitat Band Camp is owned and operated by Shay S. Scott, partner at the Portland law firm of Haglund Kelley Horngren & Jones, LLP.
COPYRIGHT BASICS:
Anyone who aspires to work in the music industry should have a basic understanding of copyright law and how it applies to music, particularly with the rise of the internet.
What is a Copyright?
A copyright is a form of property ownership. In the United States, the Copyright Act is a federal law that gives you ownership of your songs or musical works from the moment they are fixed in a tangible form. This means a copyright in a song or musical work begins to exist from the moment it is either recorded or notated as music. The copyright protects your ownership in not only the music, but also in whatever original lyrics, melody, harmony, and rhythm accompany the music.
When a work is published (publicly distributed), a NOTICE OF COPYRIGHT should be placed on all copies, such as on the face of the CD or label of the cassette tape. Putting this notice on your CD, however, is no longer required under the Copyright Act. A work that does not carry a copyright notice does not lose any protection. If a notice is used, it should contain three elements:
1. ©, or the word "Copyright," or the abbreviation "Copr."
2. The year of first publication.
3. The name of the copyright owner.
Since a copyright is an ownership right, much like people own cars and houses, it is fully divisible under the Copyright Act. This means that a songwriter can transfer, assign, or sell partial ownership of the copyright to others. Ownership in original music can be split into many shares and in many different ways.
A copyright will last and has a basic term for the life of the writer plus 70 years. If the work is created by two more more authors (joint ownership), the copyright will last for the life of the last surviving author plus 70 years. Joint owners are free to agree to any other ownership rules in writing, but if they don't, then they each have equal ownership of the entire work, including the right to license the work to others.
Owners of copyrights have the right to control use of the song or musical work. This includes the right to grant mechanical, performance, synchronization, and print licenses. In license lingo, the licensor gives the license, and the licensee receives the license. A mechnical license allows a record company or artist to record someone else's song. The songwriter is then paid a royalty on a percentage of the CDs sold. A performance license gives the right to publicly perform someone else's work (live on the radio, TV, in concert, etc.) in return for a royalty. A synchronization license gives the right to use someone's work in a movie or TV show. And a print license gives the right to print and sell sheet music.
The U.S. Copright Office in Washington, D.C. is a great source of information about copyrights. I would urge all songwriters and composers to visit the website, review the registration process, and read the Frequently Asked Questions.
Although you own a copyright in an original work once it is recorded, owners get extra protection under federal law if they register their songs or musical works with the Copyright Office. The cost is $45 per song, but you can register multiple musical works as part of a compilation if you follow the rules. Once a work is registered, there is instant public record of your ownership, which creates a presumption that you own it. You must register a work before suing to stop someone from infringing your copyright, and the application can take months unless you pay a hefty fee to expedite the process. Also, you must register to obtain compulsory mechanical license royalties. In general, artists should register their songs and music as soon as you know some other artist is going to record it, or it will be used in a movie or on TV.
PERFORMING RIGHTS ORGANIZATIONS:
ASCAP, BMI, and other groups represent virtually all American songwriters and music publishers by collecting royalties for performances of their songs and music. In simple terms, these groups collect the income from radio stations, TV stations, programming companies, Internet marketers, and every other entity where music is used and paid for. These royalties are then, in turn, paid to the various publishers and authors who own the songs or music being played and paid for.
As a songwriter, you should research and join one of these organizations to assure you get paid if your song gets airplay. After joining, your must register your songs with the Performing Rights Organization, and after that, you will receive periodic statements, much like a bank statement, calculating your royalties.
There is an abundance of information (both pro and con) about which organization to join, and tons of information on-line expaining how royalties are calculated and paid. You can read up on these issues at ASCAP, BMI, and SESAC.
The fundamental reason behind these organizations is that individual artists and song writers can't possibly devote the time, attention and research required to collect royalties from the plethora of companies that use their music.
WHO OWNS THE SONGS IN YOUR BAND?
If you're in an unsigned band with a singer songwriter, and let's say you play drums, who owns all the songs? To jointly own songs, two or more people must contribute to the creation of the work and intend that their contributions will create a new work. Unless agreed to in some other way, joint owners of a song each have equal ownership rights, they have a right to license the work, they must account to the other owners and share profits if the song makes money, and they can't do anything that would destroy the value of the song.
Yet, if the singer songwriter shows up to rehearsal with the lyrics and chord changes already in their head and an hour later the whole band is playing the song, there is a good chance that the singer owns the entire song once it's recorded - because it was already written more or less before practice, and whatever else was needed to refine the chord changes or melody originated in the singer's head. Sound familiar? I recently represented a drummer who recorded a top 10 song but was never paid. The singer and record label made a lot of money, but the drummer didn't even get a bucket of chicken. That happens all the time. The rhythm section never wants to talk about "business" in the band. Everyone assumes that if the band "makes it," then who owns what will get sorted out fairly, and that the singer songwriter will suddenly develop this flare of generosity and sign a document confirming that everybody owns everything equally.
The reality is that record labels will frequently sign the singer songwriter, and the other band members will own nothing. In fact, the other band members are often replaced by arguably better musicians - after years of hard work backing up the songwriter! That happens all the time as well, and I've seen it over and over. I wish I had a dollar for every musician who has told me this story.
One way to avoid disputes is to write down and sign a piece of paper stating who in the band owns what. This is commonly called a Songwriter Collaboration Agreement. When I record original music of my own, once the first mix is done, I e-mail the other musicians who performed on the song a simple statement: "In consideration for your work in creating [insert name of work], I hereby assign [insert name of collaborator] [insert percent being given] of my copyright, title, and interest in [insert name of work], including all lyrics, publishing, and other associated rights." And then I sign and date it. Alternatively, when your band records a song, you could simply list the song title, list the percents of those in your band who own it and what their contributions were in creating it, and have everone sign and date it.
The way I see it, I get great musicians to collaborate with me all the time, and if I receive some hefty licensing fees in the future, then having to share profits would be a nice problem to have. In my opinion, giving those who play music with me written rights in my songs is a small price to pay, it makes them feel good and valued, and I have a lot of talented musicians eager to record tracks in my studio with me. You can certainly find all kinds of complicated versions of Songwriter Collaboration Agreements on the internet or through your entertainment lawyer, but my point is that even something simple, in writing, would avoid most disputes between band members over song ownership. Personally, I would not play original music in a band without one, not knowing what I do now. I've also ended relationships with songwriters who refused to fairly agree to such an agreement. The light bulb went on above my head, and it said, "Oh, so you want me to produce you and your unfinished song for free, and you want to use all of my gear and have me play piano and arrange your material, but I can't even own 10% of the song when it's done?" Yeah, right.
RECORD DEALS:
In the near future, I intend on posting a comprehensive overview on record deals and recording contracts because my desk drawer is literally filled with them. I've collected them over the years, and I'm continually amazed at what's in them. In the meantime, here are two - and only two - key issues to consider if you are thinking about, or have been offered, a record deal.
In general, musicians are are eager to sign just about anything with anyone who claims they are a record label. I've seen it happen over and over. It happens this way: Band comes in to record, either signed to a record label, or about to sign with a record label. Band is blinded by the allure of saying they are "signed" to a record label. Label promises to pay for the recording, market, distribute, and promote the band and recordings. Band hopes to become the next big thing. Time passes, everyone is broke, chain smoking, and the band's dreams are dashed. Why does this happen over and over?
Without going into great detail, musicians need to understand two important things about successful record labels. The best record labels have two things in common: 1. Money; and 2. Connections. I'm not talking about small amounts of money and a handful of people they know in the biz. I'm talking about the ability of a record label to devote hundreds of thousands of dollars per band in properly developing the group, and proven industry connections that, once the music is well-produced and the band is ready, can launch the group into the market full-steam ahead.
Record labels pop up all the time like little underfunded mushrooms. Sure, they might be able to advance $5,000 or $10,000 per band and commit to a decent amount of distribution, marketing, and booking, but by far and away the majority of independent record labels do not have near the resources and access to capital to properly develop bands, nor do they even come close to having the connections that will give the artists a decent shot of actually getting somewhere once they are ready. So, that's it for now. But if you are considering a record deal, sure, the fine print in the recording contract is very important, but these two issues often doom a band no matter what the contract says. Educate yourself and perform as much due diligence as possible with the "record label" who wants to sign you.
DISTRIBUTION RED FLAGS:
Once your record is mastered, pressed, and packaged with a bar code, you'll embark on the difficult and time-consuming task of putting it up for sale. This will generally involve two avenues - selling the actual CD itself, and digital distribution, such as through iTunes. Unless you are signed to a major record label with a corporate subsidiary devoted solely to distributing your record through worldwide distribution channels, you'll likely encounter a mind-boggling number of different options and doors to open in getting your music out there.
One possibility is entering into a distribution contract with a local distribution company. You pay for your record to be finished and packaged with a bar code, and then you grant rights to the distribution company to sell your record to the public under a distribution agreement. It's then placed in stores, warehoused for internet sales, and the like. The benefit to this is that, ideally, the distribution company will have tons of retail contacts and channels of distribution already established, and they can simply add your CD to their inventory. If you're considering such an agreement, here are red flags you should look out for in reading the written distribution agreement they give you to sign.
Term: What is the length of time the company has the right to distribute the music on your CD? Terms are commonly three or five years. Is the end of the term, meaning when it stops, easy to understand? Or does is involve computing some kind of "tail" or "option period" that is difficult to comprehend? Is the term in "perpetuity," which means that it lasts forever? Can you actually understand how long this term is supposed to last? Make sure you can.
Exclusivity: Unless you are signing a distribution deal with a major player in the record industry that has loads of cash, whopping industry connections, and is promising big-time distribution, be careful if the company wants you to agree to "exclusive" distribution rights. This means what it sounds like. The distribution company, and only the distribution company, has the right to distribute your music. If they do a cruddy job and you've given them an exclusive, you've got big problems and little distribution to boot. If it's non-exclusive, there is less of a concern, because then you can still employ multiple channels to get your music out there for sale without violating any exclusive agreement.
Profits: Distribution agreements always have some type of profit split for the distribution company and the artist, and they invariable give the company some percentage of "net profits" to split with you. Understand that when a company receives money from a CD sale, the money that comes in the door to the company is a "gross profit." After the company deducts all of its expenses associated with the CD sale, what's left over is called the "net profit." Think of a net in the water catching a fish, after all the debris and water flows through the net once it's pulled into the boat, what's left in the net is the fish - or the "net profit." That's how I remembered this as a kid. The point is this: Can you understand how exactly net profits are calculated? Or is this computation left silent or vague in the contract? You do not want to be unfairly paying for a proportion of the distribution company's overhead and other business expenses that have nothing to do with distributing your CDs. Nor to you want to have some "vague" reference to net profits in the contract result in you being surprised later at how little you receive because the company is charging you for all these expenses you had no clue about.
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Soon I'll post more about publishing, digital licensing pitfalls, royalities, and assignments of copyrights. Keep checking back!
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If you have legal questions on any civil issue, including entertainment law, commercial law, civil litigation, business law, estate planning, real estate and mortgage law, or antitrust law, visit our firm's web site at www.hk-law.com and contact me directly.