m. william krasilovsky and sidney shemel john m. …
TRANSCRIPT
The Definitive Guide to the Music Industry
10th edition
M. WILLIAM KRASILOVSKYAND SIDNEY SHEMEL
CONTRIBUTIONS BY
JOHN M. GROSSJONATHAN FEINSTEIN
BILLBOARD BOOKS
AN IMPRINT OF W A T S O N - G U P T I L L PUBLICATIONS / NEW YORK
INTRODUCTION
Part One: MUSIC BUSINESS TRENDS AND TRANSFORMATIONS 3
Chapter 1 THE MUSIC INDUSTRY IN THE TWENTY-FIRST CENTURY
Industry GrowthFactors Relating to GrowthFactors Inhibiting GrowthLegislative Changes
Pending Legislation
Chapter 2 RECORDING ARTIST CONTRACTS
The Standard AgreementDurationGroup ArtistsExclusivityRecording and Release RequirementsArtist RoyaltiesRecording CostsRecording FundsPublishing RightsControlled CompositionsTour SupportVideo RightsAssignmentOwnership and Use of MastersCouplingAccountings and DefaultsBankruptcy
Chapter 3 CONTRACTS WITH MINORS
Voiding of an AgreementRatification of an AgreementStatutory Provisions of Contracts with MinorsParents' Guarantee of Contract Performance
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Part Two: RECORD INDUSTRY AGREEMENTS AND PRACTICES 13
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Chapter 4 INDEPENDENT RECORD PRODUCERS
The Role of the Independent Record ProducerLabel Deals and Pressing and Distribution DealsProducer RoyaltiesRecording FundsProduction and Development DealsProducer FeesMusic Publishing and Follow-up RightsContractual Safeguards
Chapter 5 FOREIGN DISTRIBUTION AGREEMENTS
Royalty ProvisionsAdvances and Guarantees; TermExclusivityBroadcast Performance FeesMusic PublishingLabelsRelease RequirementsRecord ClubsCouplingCover RecordingsSamples and MaterialsAccountings and AuditingTermination ProcedureVariations in Currency ValuesTransmittal of FundsJurisdiction over DisputesDefault Clauses
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Chapter 6 LABOR AGREEMENTS
Key Labor AgreementsArbitrationAFTRA and AFM Scale PaymentsAFM Special Payments and Trust FundsAFTRA Health and Retirement FundsRetirement and Death BenefitsRoyalty PerformersContractorsDubbingAFM and AFTRA Scales for New MediaProtections Against Illicit PracticesDomestic and Foreign TerritoryOther Income for ArtistsLegislative Advocacy
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Chapter 7 SOUND RECORDINGS: RIGHTS, RESTRICTIONS, AND ROYALTIES 63
Copyright Protection for Published and Unpublished Works 63
Authorship 64
Rights of the Copyright Owner 64
Copyrightable Works 65
Albums 65
Derivative Works 65
Compilations 66
Audiovisual Recordings 66
Foreign Sound Recordings 67
Neighboring Rights 68
Sampling 68
Master Licensing 69
The Audio Home Recording Act 70
The Digital Performance Right in Sound Recordings Act of 1995 72
The Provisions of the Act 72
The Digital Millennium Copyright Act of 1998 73
Foreign Performance Royalty Practices 75
Chapter 8 BOOTLEGGING, PIRACY, AND COUNTERFEITING 77
Federal Legislation 78
Piracy and Counterfeiting Amendments Act of 1982 79
Uruguay Round Agreements Act of 1994 79
State Legislation 80
Compulsory License for Sound Recordings 80
New Tactics 81
Chapter 9 RECORD COVERS, LABELS, AND LINER NOTES
Album Titles
Illustrations
Recording Identification
Trademarks
Anticounterfeit Practices
Warning Stickers and Censorship Issues
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Part Three: MUSIC PUBLISHER AND WRITER AGREEMENTSAND PRACTICES 89
Chapter 10 COPYRIGHT LAW IN THE UNITED STATES
Copyright Revision: 1790 to 1976
The Copyright Status of Sound Recordings
Common Law Copyright
Statutory Copyright
Copyright Registration
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Registration of Published and Unpublished Works 95
The Copyright Notice 98
The Deposit of Copyrighted Works 98
Transfers of Copyright Ownership 100
Errors in the Copyright Notice 101
The Correction of Errors 102
Fair Use 102
Copyright Protection of Song Titles 104
Compulsory Mechanical License for Recordings 105
Record Rentals 106
Jukebox Public Performance Fees 107
Copyright and Cable Television Transmission 108
Licensing for Noncommercial Broadcasting 109
Satellite Carrier Compulsory License 109
Chapter 11 THE DURATION OF COPYRIGHT PROTECTION 110
Term of Copyright Protection 110
The Supreme Court Decision on Eldred v. Ashcroft 110
The Duration of Copyright 111
Works Created by Natural Persons after
December 31, 1977 112
Works for Hire; Anonymous or Pseudonymous Authors 112
Pre-1978 Works 112
Sound Recordings 112
Works in the Public Domain 113
End-of-Calendar-Year Copyright Computation 113
The Duration of Copyright Protection for Joint Works 113
The Determination of Date of Death 113
Copyright Renewal 114
Termination of Transfers 116
Pre-1978 Contracts (Renewal Termination) 117
1978 and Post-1978 Contracts (Transfer Termination) 117
Who Can Terminate? 117
Notice of Termination 118
Legislative Implications 118
Duration of Copyright and Protection Outside of
the United States , 121
Chapter 12 THE USES OF PUBLIC DOMAIN 122
Works in the Public Domain 123
The Purposes of Public Domain ' 124
Determining the Public Domain Status of Works 126
The U.S. Copyright Office 126
The Library of Congress 127
Editions of Old Songs 128
Catalogues of Performing Rights Societies and the Harry
Fox Agency 128
Other Reference Sources 129
Another Approach: Creative Commons 130
Copyright Registration of New Versions and Arrangements
ofWorks 130
Chapter 13 ARRANGEMENTS AND ADAPTATIONS 132
Head Arrangements of Compositions 132
Copyrighting Arrangements 133
The Statutory Treatment of Arrangements 134
Duration of Basic Work Not Affected 13 5
Standards of Originality 135
Derivative Works 137
Soundalikes 139
The Arrangement of Works in the Public Domain 139
Foreign Treatment of Arrangements and Adaptations 141
Chapter 14 PERFORMING RIGHTS ORGANIZATIONS 142
Performance Monies and the World Economy 143
Clearing Functions 143
American Society of Composers, Authors, and Publishers (ASCAP) 145
Broadcast Music Inc. (BMI) 145
SESAC 146
Title Registration 147
i Surveying and Statistical Sampling 148
; Membership in ASCAP, BMI, and SESAC 150
I The Fairness in Music Licensing Act of 1998 152
I The ASCAP Payment System 152
| The BMI Payment System 154
5 Loan Assistance 155
i Insurance Plans 155
I Writer Awards 156
I Foreign Collections 157
I Dramatic Performance Rights <~ 158
fI Chapter 15 MECHANICAL AND OTHER AUDIO REPRODUCTION RIGHTS 161
Parting with Possession; Returns 162
Notice of Intention . 163
Compulsory License Accountings 164
Identification of Copyright Owners 164
Negotiated Licenses 164
The Harry Fox Agency 165
Other U.S. Mechanical Rights Organizations 167
The Canadian Mechanical Rights Organizations 167
International Mechanical Rights Societies 168
The Writer's Share of Mechanical Fees 170
Record Clubs 170
Tide Use Restrictions 171
Record Rentals 171
Chapter 16 SONGWRITER CONTRACTS AND ROYALTY STATEMENTS 172
Duration of Copyright Assignment 172
Songwriters Guild Contracts 172
Copyright Divisibility 173
Royalty Statements 174
Recapture of Rights 175
Printed Editions 175
Sheet Music Sales 176
Mechanical Rights 176
Accountings and Audits 177
Default 179
Performance Fees 180
Assignments 180
Lyrics Versus Music 181
Royalties Held in Trust Funds 181
Arbitration 182
Exclusive Writer Agreements 182
Chapter 17 WORKS FOR HIRE 185
Factors Determining a Work-for-Hire Relationship 186
Commissioned Works 187
Assignments of Copyright 189
Joint Work Status 189
Chapter 18 CO-OWNERSHIP AND JOINT ADMINISTRATION OF COPYRIGHTS 191
Registration and Notice 191
The General Rights of Co-Owners 191
The Problems of Co-Ownership 192
Community Property 192
Synchronization Rights 193
Foreign Rights 194
Consent by Silence 194
Restrictions on Assignment 194
The Writer's Interest in Co-Ownership " 1 9 4
The Cut-in 195
Chapter 19 COPYRIGHT INFRINGEMENT 197
Proof of Access to a Copyrighted Work 197
The Use of Music in the Public Domain 198
Vicarious Liability 199
Registration 200
Who May Sue for Infringement 200
Civil Remedies for Infringement 201
Court Costs and Attorney's Fees 202
Criminal Remedies for Infringement . 204
Mechanical Rights Infringement 204
Infringement by Importation 205
Copyright Registration 206
Recording Transfer of Copyright 206
Time Frame for Legal Actions 206
Sampling and Copyright Infringement 207
Chapter 20 INTERNATIONAL COPYRIGHT PROTECTION 211
The Berne Convention 211
The Effects of Berne Adherence 212
Droit Moral 213
Trade Negotiations and the General Agreement in
Tariffs and Trade 213
The United States Trade Representative 214
The Geneva Phonogram Convention 214
World Intellectual Property Organization Treaties 215
Chapter 21 FOREIGN PUBLISHING 217
The World Market for Music 217
Representation by Subpublishers 218
Foreign Performing Rights Societies 218
Foreign Mechanical Licensing 219
Synchronization Fees 221
Printed Editions 222
Local Lyrics and Versions 222
Local Writer Royalties 222
Copyright and Term of Rights 223
Fees from All Usage, Accounting, and Audits 224
Subpublishing in Diverse Territories 225
The European Union 226
Default Clauses 227
Jurisdiction 228
Catalogue Agreements 228
Local Firms 228
Joint Firms 229
Termination of Joint Ownership 230
Chapter 22 THE WRITER AS PUBLISHER 232
Joint Writer-Publisher Firms 233
Self-PublishingSources of Copyrights for the Self-Publisher
Chapter 23 MUSIC FOR MOTION PICTURES
Rights Required for FilmsEmployee-for-Hire AgreementsSynchronization and Performance LicensesLicensing Agents and Research FirmsVideos and DVDsMusic Publishing RightsRecording Artist RoyaltiesSoundtrack Album Contracts with Record
CompaniesComponent Parts of FilmsPerformances in Europe
Chapter 24 LICENSING RECORDINGS FOR FILMS, TELEVISION
PROGRAMS, AND VIDEOGAMES
The Protection of RecordingsThe Consent of the Music PublisherUnion Reuse FeesArtist Contract RestrictionsSoundtrack AlbumsVideogames
Chapter 25 MUSIC FOR THE THEATER
The Rights of Producers and WritersOriginal-Cast AlbumsSubsidiary RightsAmerican Productions AbroadInitiating the Writing ProcessMusic in Dramatic ShowsInvestment in Musical TheaterSources of InvestmentAmerican Federation of Musicians Union Scale
Chapter 26 COMMERCIAL JINGLES
Uses of Music in Commercial JinglesPayments for Music Used in CommercialsNegotiations for Licensing FeesWarranties and IndemnitiesThe Packaging of JinglesPayments to Singers and InstrumentalistsSimultatins an Artist's Stvle in Tineles
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Chapter 27 BUYING AND SELLING MUSIC PUBLISHING COMPANIES
AND RECORD COMPANIES 266
The Buying and Selling of Catalogues 266
Large Catalogues 266
Universe Music Group 266
BMG Music Publishing 267
Warner-Chappell 4 267
Sony/ATV Music Publishing 268
EMI • 268
Factors to Consider 269
Smaller Catalogues 269
Sources of Individual Copyrights 270
Renewal Rights 271
Reversion Rights 271
The Purchase of Assets or Stock 272
The Price of Purchasing a Copyright 273
Users of Copyrights 274
Capital Gains 274
Due Diligence 275
Buying and Selling Record Companies and Masters 277
Consolidation 277
Factors to Consider 280
Leadership of the Newly Acquired Label 280
Due Diligence 281
Chapter 28 LOANS TO MUSIC PUBLISHERS 284
Special Risks 285
Loan Amounts 286
Copyright Search Report 287
Recordation of Loans in the Copyright Office 288
Recordation of Loans in Local and State Jurisdictions 289
Sale of Property upon Default 289
Exclusive Writer Contracts 290
Conditions on the Administration of a Loan 290
Outstanding Advances at the Time of a Loan 292
The Appraiser's Report and Representations of the Borrower 292
Bankruptcy of the Borrower 294
Chapter 29 PRINTED MUSIC 296
Writer Royalties . 297
Print Publishers o - . 298
Royalties on Licensee Arrangements 298
Selling Agent Agreements 299
Term 299
Specialty Folios 299
Notice of Copyright 300
Fakebooks 300
Return Privileges and Reserves 301
Discounts 301
Subpublishing Deals 301
The Internet: Digital Sales and Distribution 302
Guitar Tabulature and Lyric Licensing 303
Part Four: OTHER ASPECTS OF THE MUSIC BUSINESS 305
Chapter 30 PRIVACY AND PUBLICITY RIGHTS 306
The Right of Privacy . 306
The Right of Privacy and Freedom of the Press 307
The Right of Publicity 307
Use of Name or Likeness for Trade or Advertising 309
\ Privacy Contract Clauses 310
Remedies for the Invasion of Privacy 311
Works in the Public Domain 312
Chapter 31 THE PROTECTION OF IDEAS AND TITLES 313
Compensation for Ideas 313
Concreteness and Originality 314
Unsolicited Ideas 314
Titles 315
Chapter 32 NAMES AND TRADEMARKS 317
Copyrightability 318
Trademarks and Service Marks 318
Differentiating Between Copyrights and Trademarks 318
Selecting a Name 319
Prior and Conflicting Company Names and Marks 320
Search Organizations and Services 321
Trademark and Name Infringement 322
Names of Artists 324
Registration of Names 324
Registration of Marks 325
The Advantages of Registration 327
Trademark Registration at Home and Abroad 327
The Ownership of Rights in an Artist's Name 328
A Record Company's Rights in a Name 329
Group Members' Rights in a Name 329
Doing Business Under an Assumed Name 330
"Branding": Trading on a Name - 330
Chapter 33 AGENTS AND MANAGERSThe Roles of Agents and ManagersExclusive RepresentationThe Standard Contract
Changes in Agency PersonnelAbuses by Agents and ManagersRegulation of Agents and ManagersTrade Organizations for Personal ManagersDo You Really Need a Personal Manager?Notices and Payments
Chapter 34 TAXATION IN THE MUSIC BUSINESS
Capital GainsEstate and Gift TaxesDepreciation and AmortizationTax Treatment of Record MastersCharitable ContributionsHome Office and Studio DeductionsShifting Taxable Income to Persons in Lower
Tax BracketsShifting Income from One Year to Other YearsDeferral of Income Through Retirement PlansThe Tax Implications of Type of Business Organization
S CorporationsThe Limited Liability CompanyFamily-Owned BusinessesThe Personal Holding Company
Taxation of RoyaltiesRoyalties Earned Abroad
Keeping RecordsAudit Procedures
SongwritersMusic PublishersLive PerformersVideo and Record ProducersManagers
Chapter 35 RECORD CLUBS AND PREMIUMS
Membership PlansOutside-Label AgreementsArtist RoyaltiesForeign Record ClubsMechanical License FeesPremiums
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Chapter 36 MUSIC VIDEOS 365
Major Music Video Networks 3 66
Video Technology 366
Video Licensing 3 67
Audiovisual Rights 368
The Recoupment of Production Costs 371
Musical Composition Licenses 372
Trade Paper Coverage of Music Videos 372
Chapter 37 DEMONSTRATION RECORDS IN THE ELECTRONIC AGE 374
Production Methods 374
Doing It Yourself 3 76
Cost Factors 376
The Assumption of Demo Expenses 376
Subsidized Demos 377
Submitting Demos 378
s The Independent Demo 379
Chapter 38 PAYOLA 380
The Incentive to Engage in Payola 380
Commercial Bribery 381
Publishing Interests and Payola 381
Payola and Trade Papers 381
The 1960 Congressional Hearings 382
Enter the Independent Promoter 383
The Spitzer Campaign 383
The Racketeer Influenced and Corrupt Organization Act (RICO) 384
Current Congressional Initiatives 384
Chapter 39 TRADE PRACTICE REGULATIONS 386
Discriminatory Price Differential Practices 386
Proportional Equality in Advertising, Promotional Allowances, or
Facilities 388
Price Fixing, Tie-in Sales, and Other Deceptive Practices 388
Soundalike Recordings 390
Marketing for Mature Audiences 390
Chapter 40 WORK PERMITS FOR FOREIGN ARTISTS 391
Types of Work Visas 391
The Proper Petitioner and Petitions 392
Types of Petitions and Accompanying Documents 394
Where to File Petitions 395
Artist's or Group's Accompanying Personnel 396
Rejection and the Right of Appeal 397
Union Comity 397
Impact of the Homeland Security Act 398Multiple Entries into the United States plus Extensions 398Taxation 399
Chapter 41 SOURCES OF INFORMATION 400
Trade Press 400Government and Educational Institutions 405
The U.S. Copyright Office 405Thomson CompuMark 406The Archive of Folk Culture 407The National Recording Registry 407The Smithsonian Collections 408The Center for Black Music 409Cylinder Digitization and Preservation Project 409
Music Organizations , 409Professional Research Services 410Reference Materials 411International Trade Shows and Associations 412Websites 413
Chapter 42 TECHNOLOGY IS A CHALLENGE, NOT A CHOICE 414
A New Perspective 416Digital Information Technology 418CDs: The First Practical Step 419Storage Capacity: To Infinity and Beyond 419Portability 421High-Speed Digital Networks 422A Case Study in Delivery Quality: The Ringtone
Phenomenon 423The Business of Music in the Digital Age 426
The Technology Industry Perspective 427The Zipless Buck 428
Digital Rights Management 430What's Being Sold? (Bits, Bytes, and Notes) 431
I What Is a Digital Copy: Too Much, Too Little, or• Just Right? 433
The Question of Quality 438, Territoriality: Are There Borders in Cyberspace? 439j Digital Music: A Marketing Tool or a Product? 443| How to Get There from Here 447I Addressing Security Issues 448* Creating a Viable Tracking System 450
A Celestial Cash Register for the Celestial Jukebox 451A Cautionary Note: 458Looking Ahead 460
Appendix A MUSIC INDUSTRY ORGANIZATIONS 461
Government Organizations: United States 461International Organizations 462Performance and Mechanical Rights Licensing Organizations 464Unions 468Trade Associations and Affiliates 469Industry Service Organizations 473Educational Groups 474Publications and Directories 476Music Trade Shows 477Miscellaneous 477
Appendix B CONTRACT CHECKLISTS 481
Negotiation Checklist: Demo Shopping Agreement 482Negotiation Checklist: Demo Subsidy Deal 483Negotiation Checklist: Distribution Agreement Between
v Independent Label (Owner) and Major Label (Distributor) 484Negotiation Checklist: Exclusive Artist Agreement 486Negotiation Checklist: Exclusive Songwriter Contract 488Negotiation Checklist: Foreign Subpublishing Agreement 489Negotiation Checklist: Home Video/DVD Reproduction of Song 490Negotiation Checklist: Live Concert Appearances 491Negotiation Checklist: Master Use License for Film or TV Show 492Negotiation Checklist: Mechanical Reproduction License 493Negotiation Checklist: Personal Manager 494Negotiation Checklist: Single-Song Contract 495
Appendix C CURRENT U.S. LICENSING AND COLLECTION PRACTICES
FOR DIGITAL USES 496
INDEX 497