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Music and Copyright: A Hot, Stinking Mess


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Presented at the Rutgers University Colloquium "Copyright Beyond Print", Feb 12, 2014

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Music and Copyright: A Hot, Stinking Mess

  1. 1. Music and Copyright: A Hot, Stinking Mess Aram Sinnreich, Ph.D. Rutgers University School of Communication & Information Copyright Beyond Print MLIS Colloquium Feb 12, 2014 This text is freely available under a Creative Commons 3.0 Attribution-NonCommercial-ShareAlike license.
  2. 2. 1. The Basics
  3. 3. Music Copyright Timeline Phono Copyright Copyright for US composers Proto-© for English music publishers DMCA Type of copyright 1527 1790 1831 American © conferred on authors but NOT composers 1790: 14 years (+14) 1889 Public Performances 1831: 28 years (+14) 1909 1972 Mechanical reproduction 1909: 28 years (+28) Term of copyright 1976 1998 Synch rights 1976: Life + 50 1998: Life + 70
  4. 4. Music and Copyright in the Recording Era Retail Radio Artists/Labels “Masters Rights” • Retailers pay wholesale to labels • Labels pay royalties to artists • Broadcasters do NOT pay performance royalties on masters • Promotion and “payola” Composers & Publishers “Publishing Rights” • Retailers pay wholesale to labels • Labels pay “mechanical” royalties to publishers • Publishers pay composers • Broadcasters pay royalties to PROs (e.g. BMI) • PROs pay publishers and composers
  5. 5. 2. Copyright and Corporate Power
  6. 6. Recording Contracts = Awesome 1. Transfer of ownership 2. “Controlled composition” clause  effective royalties cut by 25% 3. “Net sales” = 85% 4. Container charge = 25% deduction 5. “New tech” = 20% deduction (e.g. CD, MP3) 6. Cross-collateralization 7. Recoupment RIAA: <10% of albums recoup label expenses
  7. 7. Kenny Rogers v. Capitol Records Source: Attorney Chris Taylor
  8. 8. Recording Contracts = Awesome, Take 2 • Taking two years to respond to an audit request. • Refusing to account for, or pay a share of, P2P fees. • Holding over $76,000 in unprocessed royalties in a “suspense file” with no apparent right or cause. • Non-payment of royalties from sales of music via record clubs. • Non-payment of royalties on “free goods” distributed overseas, in violation of Rogers’ contract. • Inconsistent documentation, “in that some accounts showed earnings for certain albums in certain periods, but other accounts . . . failed to reflect those earnings.” • Withholding foreign taxes even though they were offset by tax credits. • Incorrect royalty rate calculation in some foreign territories. • Charging over $12,000 to Rogers without any explanation of those charges. • Charging Rogers 100% of video production costs, even though his contract stipulated a 50% charge. • Failing to account for or pay royalties based on radio performance royalties. • Paying Rogers a far lower royalty than his contract required for “non-disc records” such as digital downloads and ringtones. • Failing to remedy any of these oversights financially once the audit had revealed them. • While terrestrial radio in the US is not required to pay a royalty to record labels, this is not the case in many foreign countries.
  9. 9. Music Copyright: Fun for Startups, Too! “Why license them and make a little, when you can sue them and make a lot?” - Larry Kenswil (paraphrasing UMG legal department)
  10. 10. 3. Copyright and Music Aesthetics
  11. 11. Some Music Uses Don’t Require Permission… Cover Songs Public Performances Quotation Parody
  12. 12. And Some Do… Sampling Video Games Movies/TV Streaming On-Demand
  13. 13. 4. Digital Mayhem
  14. 14. Music Has Gone From This…
  15. 15. …To This.
  16. 16. Old Definitions Have No Value Compulsory Programmed (Radio) ?????????????????? Contractual On-Demand (Retail)
  17. 17. Old Products and Formats Have No Value
  18. 18. Old Products and Formats Have No Value
  19. 19. It’s Taken the Industry 15 Years… 40,000 Customers Sued Bad Laws & Copyfight Hundreds of Startups Dead Massive Bad Will
  20. 20. …But Change is Slowly Coming Newer Business Models Thriving Indie Markets Newer Copyright Models Support for Change in D.C.
  21. 21. We’re Not Out of the Woods Yet
  22. 22. Thank you. Aram Sinnreich, Ph.D. Books by Aram Sinnreich Mashed Up (2010) The Piracy Crusade (2013)