Copyrights, Licenses and Publishing Explainedtheallnightparty.com/main/delivery/Copyrights_Licenses_Publishing... · How band gets paid for a music/video license 1. One -time licensing

Copyrights, Licenses and Publishing ExplainedA musicianʼs guide to the dirty details.

Music Copyrights Explained 2

Licensing Music for Film/TV/Video/Cable 4

Royalty Rights for Public Performance* of a SOUND RECORDING 6

Royalty Rights for Public Performance* of a SONG (lyrics and music) 7

Royalty Rights for Digital Performance of Featured Recording Artist and SOUND RECORDING Copyright Owners 8

What is SoundExchange? 9

Summaries: Making Money From Copyrights 11

Copyright Summary 12

A Practical Example: 13

Sample Licenses from YouLicense 16

Licensing With The All Night Party 19

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T H E A L L N I G H T P A R T Y. C O M • 2 8 3 4 S P R I N G G R O V E AV E . C I N C I N N AT I , O H 4 5 2 2 5 • 5 1 3 . 2 5 3 . 3 7 0 2

Music Copyrights ExplainedThe All Night Party licenses works of regional performers to advertisers, producers and creative professionals in TV, radio and advertising. We’ve discovered a niche not addressed by commercial studios, music agencies like Pump Audio and YouLicense: The sound and culture of a regional scene is a great way to link businesses to their community, that to some degree replaces radio for bands by regularly exposing audiences to their sound.

A lot of performers, songwriters, and even labels don’t fully understand their obligations and responsibilities when covering music, or even how they get paid for uses of their own works. So we’ve created this document to help you understand the process.

There are TWO Copyrights for each piece of musicThis is a fundamental point to understanding the distribution of rights, licenses and royalties for a particular piece of music. To keep things straight, SONG will be CAPITALIZED when it refers to the Song Copyright and SOUND RECORDING will be

CAPITALIZED when it relates to the Sound Recording copyright.

1. SONG Copyright

Lyrics & Music

“Music” might be stated as chord progression

Example: Jingle Bells was written by Charles Goodwin, who owns the SONG Copyright

2. SOUND RECORDING Copyright

The actual sounds, on some kind of media

Example: When Jingle Bells is recorded by Sparky & The Smelly Gasses they own the SOUND RECORDING Copyright

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You can make money via copyrights if someone...Covers your SONG • 9.1¢ per physical copy they make.

• Usually paid thru Harry Fox Agency• Based on a statutory rate.

Plays your SONG that is on a video/film – on TV.

• You get performance royalties.• You have to be registered with a

Performing Rights Organization (PRO).• You must be certain that a correct cue

sheet is sent to the PRO.Plays your SONG on the Internet radio. • You get nothing

Plays your SONG on the radio (over-the-air, not internet)

• You must sign up with PRO• You get so many ‘points’ based on where

your song is played• Formula based on sampling media & club

outletsWants to use your SONG in a video/film • Negotiable price.

• They cannot use it without your permission (synchronization license)

Wants to use your SOUND RECORDING for a film/video

• Negotiable price. • They cannot use it without your

permission (master use license)Plays your SOUND RECORDING on the internet radio.

• You sign up with Sound Exchange• They make 3 payments: 50% to SR

owner; 45% to featured performer; 5% to other performers.

• Rate set statutorily. • $0.0019 per play per person with

variations.Plays your SOUND RECORDING on the radio

• You get nothing

About Performing Rights Organizations (PRO)Performing Rights Organizations exist to collect the statutory royalties Congress defines from anyone who uses music. This includes TV, radio and satellite broadcasters, clubs and malls, and most other real world music venues.

ASCAP, BMI and SESAC are the most familiar PROs in the US. While they all do the same work, each measures and collects fees in slightly different ways. Artist’s needn’t join all of them to get paid, but you must join at least one. Which you chose depends mostly on the potential markets for your music.

A new PRO, SoundExchange was created with the enactment of the Digital Millenium Copyright Act (DMCA) around the turn of the century. To get paid for work used on the internet or other new media applications, you must sign up for Sound Exchange, as well as the other entities.

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50%Synch

License50/50 split between the

composer and publisher.

A local writer will likely be his own publisher

Licensing Music for Film/TV/Video/Cable

The Licenses needed

The producer needs both licenses to use the song and the sound recording in his production. Usually the producer will have a standard license agreement. You will want to check with a knowledgeable source or an attorney to make sure your rights are protected or appropriately compensated

Typical Split for a Music-Video LicenseA Licensing company might take some percentage e.g. 50% off the top for finding the opportunity. In addition there would be performance royalties unless negotiated out of the license.

1. SONG CopyrightLyrics & Music


2. SOUND RECORDING Copyright

The actual sounds, on some kind of media

Synchronization License Lyrics & Music

SONG copyright owner permits producer to ‘synch’ song with a

Master Use License

SOUND RECORDING copyright owner permits the producer to use the sound with a video production.

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50%Master Use

License

Typically owned by the recordcompany or by the band if no

record label deal.

How band gets paid for a music/video license1. One -time licensing payment. This payment will be split between the sound

recording owner and the song owner. This payment will be made to you by the video producer or your publisher if you worked thru the publisher.

2. Performance Royalties. The PRO pays this to the song owner and publisher.3. Band has to have an agreement as to who owns what.The licensing one-time payment will come after you prove ownership of the song and the sound recording AND sign BOTH the Synchronization License and Master Use License. These licenses allow the producer to use the song and the sound recording in his video. There is much more to learn about the nature of the two license agreements.

The Performance Royalties come when the video product is shown on the air. However, there will be NO PAYMENTS unless you and your publisher are registered with ASCAP or BMI.

Royalty-Free Music and Statutory RequirementsAs with most things other than death and taxes, clever lawyers can figure out ways around most statutes, and royalty payments are among them. It’s beyond the scope of this document to explain the legalities and details of licensing, but we can present some current alternatives.

Stock photo giant Getty Images now sells music and video, as well as photographs, via a number of royalty free content platforms including istockphoto.com and pumpaudio.com. On these sites, users pay royalties prospectively, up front, based on the application. The stock-house provides the end-user with a blanket waiver of rights in exchange for this one-time payment.

To avoid confusion and problems with PROs, many have adopted a tactic known as “re-titling”. Imagine you have a registered song called “My Big Blue Camaro” with ASCAP and filed a copyright. The stock-agency would re-register the song as “Camaro Big Blue”, identifying itself as publisher of this new composition. This ensures they get paid for any statutory collections on placements they sell, while leaving the artist free to sell the actual track, with original rights-designations intact. Both songs can be licensed, the artist gets paid in either case, but the stock-house’ share comes off the top, and the spins are accounted to the retitled track, not the underlying song. It sounds shady, but it appears to be a fairly common practice, driven by accounting and convenience.

What’s problematic with these agencies are the rates that accompany these deals: They take as much as 65% of each sale. Since they also sell to other agencies (like ANP!), the artist may wind up getting even less than the nominal 35% remaining, as the resellers mark up the sale again! Stock houses like Pump Audio sell a lot of “needledrop” (ad hoc bed music, from finished songs) music because they can deliver clearance and licenses to the filmmakers/creatives with a single click at a known price. It’s a volume business, all about scale, driven by convenience.

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Royalty Rights for Public Performance* of a SOUND RECORDINGA Public Performance includes over-the-air radio, TV, a club, an elevator.

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100%SONG Share

100%SOUND

RECORDING Share

New “Digital Performance” RoyaltiesDoes not apply to radio or TV uses

(these outlets only pay song share per original laws)

50%Composer

50%Publisher

Payable from a Performing Rights Organization (PRO). The 50/50 split is a typical split but different percentages can be agreed upon by the parties.

Reiterating a point: the owners of these rights must be registered with a PRO to ever get any money.

No ASCAP, BMI or SESAC, no money. Period.

The 100% is why the record label prefers to also be the publisher as well as own the SOUND RECORDING.

As of May, 2009 there is discussion in the U.S. Congress about giving Sound Recording owners certain royalty payments for public performances. Currently, SOUND RECORDING owners do receive certain royalty payments from digital performances.

Royalty Rights for Public Performance* of a SONG (lyrics and music)

SONG (lyrics & music) Copyright Public Performance Royalties1. Register with a Performing Rights Organization (PRO), You must register with a

PRO to have even the possibility of receiving revenues. It is free to join. You will need a composer membership and a publisher membership

2. Public Playing of Your SONG. Signing with PRO authorizes them to license your SONG for public play on radio, TV, cable, bars, clubs, restaurants, shopping malls, concert halls and promoters, web sites, airlines, orchestras, etc. and collect revenues for you from those performances. All those places pay an annual fee to the

PRO to license ALL the PRO’s music for public playing of the music. Your SONG will

have to play a lot in those venues for you to receive much money. Signing with the PRO does not give away any other rights to your music. Especially see the slide on licensing your music for use in a video, TV, cable or ad.

3. If your music is embedded in any type of video that you have authorized, you need to make sure that the producer has sent a ‘cue sheet’ to the entity playing the video so the entity knows which composer and which publisher to give credit to when reporting play to the PRO.

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100%SONG Share

Publisher’s Share

If you have one – otherwise you can be your own publisher

% negotiated

Composer’s Share for writing lyrics and

music


% negotiated

Royalty Rights for Digital Performance of Featured Recording Artist and SOUND RECORDING Copyright OwnersThese are the mandatory splits (determined by statute) payable when sound recordings are performed on digital cable and satellite television music, Internet and satellite radio.

Statutory Split for Digital Performance RoyaltiesSound recording royalties apply to sync and mechanical rights, when music is incorporated into creative work (like a TV show or movie, but not regular radio rotation).

The key thing to note above is that the performers are always entitled to at least 50% of these royalties, regardless of their investment in the project.

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Non-featured Performers

5%

Featured Performers45%

SOUND RECORDING Owner(s)

50%

What is SoundExchange?Some Questions & Answers About Royalties for Digital Droadcast of SOUND RECORDINGsWhat SoundExchange Does. SoundExchange is an organization designated by the U.S. Copyright Office to collect and distribute royalties from statutory digital

performance licenses, including: Digital cable and satellite television services (Music

Choice and Muzak), non-interactive "webcasters" (including original programmers and retransmissions of FCC-licensed radio stations by aggregators), satellite radio services (XM and SIRIUS).

SoundExchange also grants a statutory license to digital organizations to play all the music that is registered with them.

What SoundExchange Doesn’t Do. SoundExchange does NOT administer royalties for: Interactive performances of sound recordings (e.g. "on-demand" services that allow the listener to select the tracks they wish to listen to and/or the order in which they wish to hear them); or analog public performances (traditional radio and television)

Reproduction Right for SOUND RECORDINGs. The reproduction right for sound recordings, e.g. digital downloads. Licenses for interactive performances or reproduction of sound recordings must be obtained directly from the SOUND RECORDING Copyright Owner (SRCO).

Is there a performance right for traditional over-the-air radio broadcasts too? Not for artists and record companies. While songwriters and music publishers receive performance royalties from airplay on radio and television, Congress "grandfathered" traditional radio, so that radio stations will continue to perform copyrighted sound recordings free of charge. However, if stations simulcast their signal over the Internet or via satellite, the U.S. Copyright Office has ruled that they must pay performance royalties.

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How do I get Performance Royalties and how much are they?1. You must register with ASCAP or BMI as a songwriter.2. You must have your publisher (it can be you) register with the same entity as a

publisher.3. If you are not registered you will never receive any payments.4. It is free to register.5. By joining such an organization, you are licensing them to collect your performance

royalty payments. They in turn license performance venues to play the music of all their artists.

6. After you are registered, you then have to register all of your titles with them.7. If the titles are registered you will never receive any payments.8. The Songwriter gets 50% and the Publisher gets 50% of the royalties.9. For TV, if your song is on a show, it is given ‘points’ for the value of the show. Each

point is worth $7.71. A network show might give you 25 points.

How do I get paid if someone covers my SONG?1. You get 9.1¢ for each time they make a copy e.g. if they press 1,000 cds, you would

get $91.2. You don’t split this with your publisher.3. You HAVE to let someone cover your song unless you have never released it for

publication4. The band covering your sSONG (or their label) will pay the Harry Fox Agency.5. So your song has to be registered with the Harry Fox Agency or else they have to

track you down. Signing with the Harry Fox agency means that you are hiring them to collect your mechanical licenses for a fee.

6. It is tough to get registered in the Harry Fox database.7. This is called a ‘mechanical’, compulsory, or ‘cover’ license.

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Summaries: Making Money From Copyrights

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My song is used in a movie, tv or video:

• Your copyright means that only you can authorize the song to be synchronized with a video

• you sign a synch license to authorize it

• you can be paid for the synch license up front

• you can receive performance royalties if you are registered with a Performing Rights Organization

My Sound Recording is used in a movie, tv, or video:

• Your copyright means that the sounds that you recorded cannot be used in a video without your approval

• You sign a master use license to authorize its use

• You can be paid for granting the license

• You won't receive performance royalties

Someone wants to cover my song

• Your copyright means that if someone wants to cover your song, they have to pay you for each copy they make.

• They don't have to ask your permission.

• The best way to insure being paid is to register with Harry Fox Agency.

Band Agreement

• Determine who owns the sound recording copyright

• Determine who owns the song copyright.

• Authorize one person to negotiate and sign a master use license

• Depending on who owns the song copyright - authorize someone to negotiate and sign a synchronization license

SONG Copyright

• This copyright is for the lyrics and the music.

• Recommend that you register with the U.S. Copyright Office

• Song cannot be used in a video without your granting a license to use

• You can be paid for granting the license

• You can register with a PRO to potentially received performance royalties

Sound Recording Copyright

• This copyright is for the actual sounds as recorded.

• Recommend that you register with the U.S. Copyright Office

• Song cannot be used in a video without your granting a license to use

• Register with Sound Exchange to obtain possible royalties for play on internet radio.

Copyright SummaryThe Copyright owner has the exclusive right to do and to authorize other to the items listed below. Remember there are two separate copyrights: the SONG copyright and the SOUND RECORDING Copyright.

The term ‘phonorecord’ is from U.S. Copyright law and includes CDs, vinyl, cassettes as well as other formats.

The rights of the Copyright Owner as stated in the copyright law (and some annotated remarks)1. To reproduce the work in copies or phonorecords.2. To prepare derivative works based upon the work;3. To distribute copies or phonorecords of the work to the public by sale or other

transfer of ownership, or by rental, lease, or lending;To perform the work publicly, in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audio-visual works;

4. In the case of SOUND RECORDING, to perform the work publicly by means of a digital audio transmission.

5. Anybody who uses the song has to pay you for the use. Mechanical licenses – see Harry Fox.

6. Anybody who wants to use the song in any kind of video has to get a Synchronization License from you.

7. Anybody who plays the song publicly (club, radio, TV, elevator etc.) has to pay for the right to play your song (see performance royalties as to how you can collect payments.) Also see about Cue Sheets

What is a “Sample”?Definition: a technique for electronically splicing pieces of previously recorded sound as part of a composition

The important thing to note about sampling is that it is different than copying (in the non-physical sense) a riff or tune from another work. If one can recreate the musical work of another without using the physical work, it is not considered sampling. Sampling, by definition, is not accidental.

Can I use a Sample in my record?Practically, the answer is no. It will be too difficult to obtain the license and you will have to pay a negotiated price. Try something else.

Okay, still interested? To use a sample in your recording, you must obtain a license to use it from the owner of the SONG copyright and the owner of the SOUND RECORDING Copyright. Harry Fox Agency cannot grant these rights to you. They must be obtained directly from the owners. Good Luck.

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A Practical Example: Who gets what money when Sparky & The Smelly Gasses release a cover of “Jingle Bells”?SONG Copyright • Charles Goodwin

SONG Recording Copyright • Sparky & The Smelly Gasses

Payment for ‘covering’ Goodwin’s Song • Sparky & The Smelly Gasses pay 9.1¢ for each CD or they produce or digital copy they sell. Sparky & The Smelly Gasses pay Harry Cox – no permission needed from Goodwin. (mechanical license).

Producer wants to play Sparky & The Smelly Gasses version on TV

• 1. Has to negotiate with & get permission from Sparky & The Smelly Gasses to get master use license.

• 2. Has to negotiate with & get permission from Goodwin to get synchronization license.

Song get heavy play on the radio • Whatever royalties are earned go only to Goodwin

Producer’s TV show gets heavy play on major network.

• Whatever royalties are earned go only to Goodwin

Song get heavy play on internet radio stations or Sirius®

• Sparky & The Smelly Gasses get 50% because they own the SOUND RECORDING; 45% because they are the major performers; 5% goes to any minor performers. $0.0019 for each performance to each customer

Song gets heavy play on some kind of emusic download service, e.g. iTunes

• Sparky & The Smelly Gasses pay Harry Cox for the release as above – no permission needed from Goodwin. (mechanical license).

• The commercial download service pays artist a pre-negotiated rate for each download or stream-listener (per-stream rates apply)

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What documents are needed to do all this?Locking down your rights requires some effort on your part. We’ve created this list of commonly-needed documents that get you paid below:

Legal1. Define a Band Agreement. An agreement signed by the band as to who exactly

owns the sound recordings and the songs and who is authorized to negotiate their use; how the monies are split.

2. Create a company or LLC (or other business entity). Limited Liability Corporation. The band may want to consider establishing this entity to conduct business and limit liability.

3. Create and use Work-for-Hire Agreements. If another person plays on your CD, pay that person, have them sign this agreement waving any of their rights to the copyright.

4. Sample Synchronization License. This is more of a checklist than a document. Know what rights exactly you are authorizing someone to use and for how long. Also know the clauses to avoid so that you don’t give away more of your rights than intended.

5. Sample Master Use License. This is more of a checklist than a document. Know what rights exactly you are authorizing someone to use and for how long. Also know the clauses to avoid so that you don’t give away more of your rights than intended.

Registrations6. SONG Copyright. Get the songs copyrighted with the U.S. Copyright Office to

show that you own the copyright. You have the copyright as soon as you write it but this provides much greater protection.

7. SOUND RECORDING Copyright. Get the sound recording copyrighted with the U. S. Copyright Office to show that you own the sound recording.

8. Performing Artists Agency Songwriter Agreement(1). Register with ASCAP or BMI as a songwriter. This authorizes them to collect revenues for public performances and to license this part of your copyright.

9. Performing Artists Agency Publishers Agreement (2). Register with ASCAP or BMI as a publisher.

10.Register Your Songs with Performing Artists Agency. After you have registered with the PRO, then you must register each of your songs. Can all be done on-line.

11.Register with SoundExchange. This registration allows you to receive digital performance royalties.

Administrative12.Cue Sheets. If you license a song to a video producer you want to make sure that

the producer sends a ‘cue sheet’ with your appropriate name and publisher for the use of your song to the places where it is publicly played.

13.CD Cover Documentation. A listing of all the items to be included on a CD cover to give proper credit and to notify users of correct references about using the music.

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CDs, Traycard, Booklet and Packaging Print ChecklistDesigners needn’t guess about what belongs on your package. This list will help ensure you get paid and properly credited for your work.

Spine (there are usually two spines – same thing)1. Artist Name2. Album Title3. Label Name4. Label Catalog Number

Front of the CD Case5. Artist6. Album Title7. Some kind of graphic8. Optional: sometimes the record label & Catalog Number

Back of the CD Case9. Track numbers and titles10.Name and Address of the Label11.Made in USA (if it is)12.Bar Code13.Statement indicated ‘All Rights Reserved’ and/or No unauthorized copying – illegal.14.Sometimes copyright and sound recording indicators

1. FOR LABELS: P with label name = expresses label’s right to release2. C represents the Publisher of the work (band, publishing house, label)

15.PRO (Performing Rights Organization) notice, explaining which PRO represents the title.

CD Itself16.Artist17.Album Title18.Label Name, Address and catalog number19.P circled – sound recording copyright; ©; both – to whom – small print20.Manufacturing credits (liability) Mfg by:________21.Formal notice of “All rights reserved”

Insert22.Credit Writers, publishers, and list the PROs for each entity23.Session personnel = maybe should say ‘for hire’24.Mastering, producing etc. All other credits including art & photo.

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Sample Licenses from YouLicense

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Licensing With The All Night PartyOur licensing program was developed to position top local artists as natural music providers for regional and national advertisers, filmmakers and creatives. Original local music is a unique product in the commercial music space. None of our local competitors recognize it’s power and appeal, and most cling to 20th Century proprietary models based on scarcity and control that no longer make sense. The one-size-fits-all composer today competes with performing bands being driven to new markets by the collapse of CD sales and conventional label models. Even Pharrell Williams of N.E.R.D. advises aspiring artists to pester ad agencies, rather than labels, for deals! We don’t necessarily agree with the tactic, but the idea is timely.

The All Night Party is uniquely positioned to respond to this emerging market. First, our partners are already the “first call” for music in our market. Our competitors have to call music-buyers, and shop projects to land work, while the best prospects who know the music scene call us when the need arises. By partnering with our communities most established music production facility, Ultrasuede, we have strong connections with many local artists, making it easier for us to acquire music and make deals. Two of our partners have been working in the ad market for years, with our marketing director a board member for the Cincinnati Ad Club chapter. As a result usually hear about the best jobs in town first, and get called to pitch deals in bigger markets as well.

Let us explain why DIY is DOA in licensing. The problem faced by labels, agents and managers and individual artists is a lack of variety. No individual band is perfect for every spot, and since most small labels are genre-based, they face similar challenges. Variety is mandatory in the licensing market. The upside is that traditional composers and the Usual Suspects achieve diversity by being hacks-of-all-trades or by licensing catalogs to augment their work with salable solutions. This creates room for a company to specialize in variety, quality and the unique appeal of authentic, crowd-tested songs and ideas. The All Night Party is such a company.

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Copyrights, Licenses and Publishing Explainedtheallnightparty.com/main/delivery/Copyrights_Licenses_Publishing... · How band gets paid for a music/video license 1. One -time licensing