Songwriting Archives

All that glitters is not gold – tips on analyzing a songwriting/band contest

When is the last time you heard of someone getting a really “big break” in the music industry through any contest, other than perhaps American Idol? That’s because most artists and songwriters are not discovered through contests, they are discovered through relationships in the industry.

Yet, there are literally hundreds of such contests out there promising thousands of dollars in prizes or a opening slot for a well-known band, or a recording label or songwriting deal — everything but the kitchen sink!

I don not, by any means, mean to say that all contests are rip-offs. There are, in fact, many legitimate contests in which songwriters and entertainers may participate. I do mean to recommend, however, that you do a bit of research and exercise some good judgment prior to sending your submission off into the digital divide.

First, there are some very simple questions to ask yourself initially as you examine these “one in a lifetime opportunities. Look at the source or sponsor of the contest. Often times, their reputation proceeds them. Have you ever personally heard of the contest sponsor? What are the credentials of the sponsoring entity? Have you read about them in any public forum such as a magazine, news article, or online resource? What successes have they achieved in songwriting and/or the music industry, if any? Who are the judges? What are their credentials. Are there any major advertising sponsorships associated with the contests? What are the prizes? Are they substantial? Answers to most, if not all, of these questions can be derived through a simple online search.

Let’s say you’ve done all of the above research and determined that the contest is sponsored by none other than MTV? To most songwriters and artists, there could be no greater sponsor than MTV, correct? But before acting too hastily, let’s move into the second phase of analysis, i.e., taking a look at the RULES.

Now, assume that you determined that since MTV was the sponsor, it must be a great opportunity, so you jump right in with both feet, or in this case, your best demo tape! A chance to open for a great headline act is waiting for the lucky winner! Unfortunately, if you did not read the fine print, you just agreed to the following:

release and hold harmless Sponsor Entities against any and all claims, injury or damage arising out of or relating to participation in this Contest and/or the use or misuse or redemption of a Grand Prize and for any claims based on publicity rights, defamation, invasion of privacy, copyright infringement, trademark infringement or any other intellectual property related cause of action. . . . (emphasis added)

This language comes straight from the rules and regulations in a ongoing “Rock the Revolution” contest sponsored by mtv2.com. See the Rules and Regulation page. This is typical hold harmless clause, which effectively negates any rights or claims you may have otherwise had to bring a civil action against MTV in the event that you are injured as a result of the contest.

In addition, MTV also states in their terms of agreement that:

The approximate retail value (the “ARV”) of the Grand Prize is $150.00. Any difference between the ARV and the actual value, if any, will not be rewarded. If, for any reason, the Grand Prize related event is delayed, cancelled or postponed, MTV reserves the right, but is not obligated, to cancel or modify the Contest in its discretion and may award a substitute prize of equal or greater value.

This effectively means that you could end up getting only $150 as the “grand prize winner” if the concert is canceled for any reason by the headlining act. A corollary effect net effect is that, at most, your damages in a civil lawsuit probably would be limited to $150, the agreed retail value (i.e., by agreeing to their terms, you and MTV agreed to this amount).

Finally, by simply clicking the “I Agree” button on your web browser without first reading the fine print, you also agreed to grant MTV a non-exclusive right, among other things, to record your submission by virtue of the fact that you are a finalist? See this clause from a real contest:

Finalists and Winner agree that by entering into this Contest they are granting MTVN. . . the non-exclusive, irrevocable right and license to exhibit, broadcast, copy, reproduce, encode, compress, encrypt, incorporate data into, edit, rebroadcast, transmit, record, publicly perform, create derivative works of, and distribute and synchronize in timed relation to visual elements, the Submission Materials and/or any portions or excerpts thereof, in any manner, an unlimited number of times, in any and all media, now known or hereafter devised, throughout the world, in perpetuity. . . .

While this is non-exclusive license, meaning that you can issue other non-exclusive licenses to third parties, it does give MTV pretty broad rights to use your submission in almost any form they want. This doesn’t necessarily mean that you shouldn’t participate in this contest, it is just something you should certainly understand and use in weighing your decision.

Believe it or not, this grant is pretty tame compared to the language of other contests I have reviewed for clients. I’ve seen situations where a contestant ostensibly assigns the copyright in a song submitted for a contest to the sponsor. So beware. Make sure there is something in the rules that indicates that you are not transferring any rights or licenses in the submission.

These are just few examples of some of the lawyerly devices that can be utilized in the rules and regulations of a contest, particularly an online contest which a “click agreement” in place. Before you submit your intellectual property, it is probably worth the money to pay a few hundred dollars to an entertainment attorney to advise you as to what the legal ramification are for you and/or your band.

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Fair is not always “Fair Use”

The concept of “fair use” is a very misunderstood concept. The first common misunderstanding that people espouse is that the concept of “fair use” is a right or privilege granted by copyright law. It is not. Secondly, many people mistakenly believe that so long as they do not make any money from an infringing use of copyrighted material, then the use is a fair use. This is also an incorrect assumption.

Fair use is not a right or a privilege to be exercised at one’s whim. Rather, the doctrine is an “equitable rule of reason” that may be used as an affirmative d

efense in a copyright infringement action. The purpose of the rule is to balance the equities between the desire to protect and therefore encourage the creation of new ideas and the desire to encourage the free exchange of speech in the marketplace of ideas. The tension was described by Justice Souter as “simultaneously protect[ing] copyrighted material and allow[ing] others to build upon it.” Nonetheless, the thing to remember is that application of the fair use defense is declared by judicial fiat in the context of a copyright infringement action. It is applied on a case-by-case analysis of the factual situation. Thus, fair use is not a presumptive right or privilege that may be exercised by the infringing party.

There are four factors weighed by the Supreme Court in making a determination of whether a derivative work constitutes a “fair use.” These factors are (1) the nature of the work itself; (2) whether or not the work is commercial in nature; (3) the amount of the copyright work that is used; and (4) the effect of the use on the potential market or value of the copyright at issue. Folsom v. Marsh, 9 F. Cas. 342 (C.C.D. Mass. 1841), codified at §107 of the 1976 Copyright Act.

The nature of the work refers to the “nature” of the unauthorized derivative work, not the original copyright work. In order for such an unauthorized use of copyrighted material to be entitled to the“fair use” defense, the new creation must transform the original copyrighted material. A “transformative work” is defined by the U.S. Supreme Court as one that “adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message.” See, Campbell v. Acuff Rose Music, Inc., 510 U.S. 569 (1994). While all factors must be considered, this is perhaps one of the more critical factors in the analysis. Merely modulating the pitch of a song or inverting the sequence of a chord progression would probably not be considered transformative. A very good example of a derivative work that is transformative in nature is Alice Randall’s The Wind Done Gone, the same story as Margaret Mitchell’s Gone with the Wind, but told from the perspective of a mulatto slave who is the half-sister of Scarlet O’Hara, the main character in the original work. See Suntrust v. Houghton Mifflin Co., 252 F.3d 1165 (11th Cir 2001) per curiam, opinion at 268 F.3d 1257. In that case, the Eleventh Circuit extended the protection of a musical parody in Acuff Rose to the novel.

With regard to the second factor as to whether a use is commercial in nature, it should be noted that this does not necessarily mean that the new creation has to generate profits. If the new work create a significant fan, donor and/or advertiser base, those factors tend to lead to a conclusion that it is commercial in nature. A person simply does not have the “right” to use copyrighted works in any manner as long as no profit is generated from the use. It is also evident that this factor does not mean that simply because a derivative use does in fact generate profits, that it is by default not a fair use. In Acuff Rose, 2 Live Crew’s parody version of Roy Orbison’s Oh Pretty Woman had sold over 250,000 copies, yet was still considered a “fair use.” The thing to be remembered is that this is but one of the factors.

The third factor is fairly easy to evaluate: the more material “borrowed” from the copyrighted source, the less likely the infringer is to have a “fair use” defense. Again, another misconception is that there is a bright line test for fair use: that a few measures of a song, a couple of lines from a poem, a few hundred words of a paragraph, or a few paragraphs from a book, are considered fair use. This misconception has no basis in either the Copyright Act or the case law interpreting it. It is merely folklore. The factor, as used by the courts, is more of a sliding scale based, again, on the quantity of the material used from the copyrighted work as compared to the total material.

Finally, the last factor weighs the impact on the infringing use on the potential market and value of the copyright. This was an integral part of the Supreme Court’s ruling in Acuff Rose that 2 Live Crew’s parody of Roy Orbison’s Oh Pretty Woman did not impact the potential market for the original. The more a derivative work negatively impacts the potential market for and value of the copyright, the less likely it will a “fair use.”

In summary, as you may have noticed, the fair use doctrine is by no means a bright line test. Each “fair use” defense is, by its very nature, evaluated on a case by case analysis in the context of a copyright infringement action. Fair use is not something to be relied on as a presumptive right.

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Music Publishing 101, Part 4: Show me the money!

Section 106 of the Copyright Act gives the owner of a copyright a bundle of rights which includes the rights to 1) reproduce the work, 2) prepare derivative works, 3) distribute copies of the works, 4) publicly perform the work and 5) publicly display the work. All of the music publisher’s income flows from this basic bundle of rights. It should be noted that the right to perform the work is sometimes segmented into two descriptions, one called the grand rights, or dramatic and theatrical performances of the work, and small rights, or all public performances other than theatrical, including live performances of the work and radio broadcasts. Here is New York attorney, Peter Shukat discussing grand rights:

To exercise control over these rights, a music publisher issues licenses to authorize various uses falling into this bundle of rights. For example, if a company wants to reproduce and distribute a copyright in a musical composition, the publisher will issue a mechanical license to a record label, for example. Mechanical royalties are a primary source of income for music publishers. In the United States, the U.S. Copyright Office sets the rate for mechanical royalties, which is currently 9.1 cents for songs that are 5 minutes or less, and 1.75 cents per minute for songs exceeding 5 minutes. The current mechanical royalty and historical rates can be found at the Harry Fox Agency’s website. The Harry Fox Agency administers licenses for, and collects and distributes royalties to its member of the National Music Publishers Association, although a music publisher can, and often does, perform this task on its own Since the rate is always subject to increase, a music publisher should also request language in the license that provides that payment is made at the rate in effect at the time the product is distributed.

Another major source of income for music publishers is public performance royalties. in the United States, these royalties are almost always collected by the three major performance rights organizations, ASCAP, BMI & SESAC. Outside the U.S., each country has its own performances rights organizations. See the “Resources” page on my blog for a list of and links to many of these. As discussed in Part 2 of this series, music publishers, as well as songwriters, affiliate with (i.e., enter into an agreement with) the performance rights organization to enable them to track airplay and live performances, and collect and distribute the royalties. Performance rights organizations issues “blanket” licenses to radio stations, television stations, large nightclubs, large restaurant chains, and retail source so that these entities can play the music of their affiliated songwriters and publishers. In exchange, these venues pay the performance rights organizations fees based on the anticipated usage. The societies then use varying formulas based on such factors as airplay and usage to issue payment to its affiliate songwriters and publishers.

The music publisher issues a synchronization license to the producers of television shows, movies and commercial advertisements for reproduction and distribution of the work. The “sync fee” is usually a one time payment, varying from the hundreds of dollars to hundreds of thousands, dependent upon numerous factors such as the length of the segment in which the song is used, the prominence of the song in the scene (whether it is prominently featured or in the background), and whether it is the primary focus of the scene (as, for example, BTO’s old song Takin’ Care of Business as used in the Office Depot commercials). The publisher typically splits this type of revenue equally with the songwriter.

A less generous source of income, but still significant nonetheless, is revenue generated by printing sheet music and lyrics. This is a type of public display, but can also fall into the category of reproduction and distribution. Print licenses are most commonly issued to publishers of individual sheet music (sometimes called “piano copies”) and so-called “folios” (a collection of sheet music by a particular artist) and sheet music collections. Income is also generated when lyrics to musical compositions are reprinted in a publication, such as, for example, when a book is printed in connection with a movie. How much of this income is given to the songwriter varies widely, as it is sometimes based on percentage basis, but also can be on a flat, cent rate, e.g, 15 cents per copy. When a percentage basis is used, it is sometime based on wholesale, sometimes retail. The general trend among publishers in past years, however, is to split everything equally on a 50/50 basis.

Of course, one rapidly growing area of revenue is in the arena of technology, i.e., computer software, multimedia products, singing greeting cards, DVD’s and particularly ringtones. Though these usages also involve the reproduction and distribution rights, they generally require specialized licenses and the rates a very market driven. Again, it is customary for a music publishers to split these fees equally with the songwriter.

Finally, a very significant source of income for a music publisher is foreign sub-publishing. Outside of the U.S., music publishers solicit foreign sub-publishers on a territory by territory basis. The arrangement is generally exclusive, meaning that the foreign publisher has the rights to exploit the music publisher’s entire catalogue of songs within that territory, including the entire bundle of rights, and issue mechanical, performance, synchronization and print licenses for the usage of the music. Typically, the U.S. publisher will receive 75% of the income generated by the foreign sub-publisher, while the sub-publisher retains 25%. The sub-publisher does not receive any ownership interest in the copyright and usually pays the U.S. publisher a significant advance on future royalties, dependent in large part on the amount of income the catalogue has generated in the U.S. Foreign income is often the subject of intense negotiation in writer deals, but very often a songwriter will receive half of everything the U.S. publisher receives, or 37.5 cents of the 75 cents received by the publisher.

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Music Publishing 101, Part 3: Pieces of the Publishing Pie

Once a music publisher begins to receive income from the exploitation of the copyrights it has acquired, it must begin to distribute the income to the appropriate writers. Understanding the basic principles of copyright ownership and royalty splits is fundamental to performing the task of distribution of income. One device that is often used to illustrate the concepts involved is a “pie” that represents the split of income as between the publisher and the songwriter (this diagram is borrowed from the Berklee School of Music). To fully understand this illustration, however, it is necessary to overlay the ownership of copyright which, in a typical arrangement, belongs 100% to the music publisher.

In simple terms, when a songwriter signs an exclusive songwriting agreement with a music publisher, the songwriter is agreeing to give up one hundred percent of the copyright (represented by the yellow circle in my illustration), for which the publisher agrees to pay the songwriter an equal share, usually 50%, of the royalty income stream (the dividing line in the illustration) for the duration of the copyright. So, for every dollar the publisher receives in net income from the exploitation of the copyright (the publisher will recoup certain expenses, such a demo costs, advances and administration fees — all of course subject to negotiation), it pays the songwriter fifty cents. The only exception to this concept is that performance royalties, paid by ASCAP, BMI & SESAC, are paid by these organizations directly to the songwriter and publisher respectively, so that this income stream does not get filtered through the publisher. The portion of the royalty stream paid to the songwriter is often referred to in the music industry as the writer’s share, while the portion the publisher keeps is called the publisher’s share.

If a songwriter has enough clout to negotiate a partial participation in the publisher’s share of income, he will attempt to negotiate what is called a “co-Publishing” deal. In this type of deal, the songwriter actually owns half of the copyright (half of the yellow circle in the above-illustration), and is entitled to received 50% of the publisher’s 50% share of the income, or an additional 25%. This equates to 75 cents for every dollar of publishing income received (the songwriter’s share of the royalty pie, plus half of the publisher’s half of the pie).

These principles begin to get even more convoluted when songs are co-written by myriads of songwriters, which happens all too often in Nashville. Take, for example, the song More than a Memory, recorded by Garth Brooks, currently climbing the Billboard Country charts. That particular song has three (3) co-writers and six (6) publishers listed in the credits (incidentally, if you want to gain a good understanding of music publishing, buy yourself a recent copy of Billboard magazine and study the “Singles & Tracks Song Index” that details the publisher information). So, assuming for illustration purposes that the three writers have participation deals with their publisher (this appears to be the case since there are six publishers), then each writer would own 16.666% of the copyright and would each be entitled to 25 cents of each dollar received. Three of the six publishing companies likely belong to the songwriters themselves (and one-third of the income just described would be paid by the entity through which they self-publish), and the remaining three publishers would split the remaining 25 cents, entitling them to about 8.5 cents each. To further complicate matters, any portion of the royalty stream can be sold and/or encumbered, as can the publishing interests.

In addition, both music publishers and songwriter are often the party to an administration deal in which an administrator issues licenses and collects royalties for the copyright owner in exchange for a percentage of the income, usually 10-15%. So, to continue using the example in the previous paragraph, if one of the co-writers of More than a Memory has an administration deal in which she pays 10%, then her share of the $1.00 would be 22.5 cents, because she paid her administrator 2.5 cents.

One thing is certain, the music publishing industry most often applies the converse of Occam’s Razor, i.e., the principle that, all things being equal, the simplest solution is best!

This article is not intended as legal advise. Should you require advise regarding an music publishing issue, you should consult with a competent entertainment attorney.

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Music Publishing 101, Part 2: Forming a publishing company

From a legal perspective, the formation of a music publishing company is, in most respects, very similar the formation of any other type of company, except that the documentation is tailored specifically for the business of music publishing.

The first step in the formation of any business, including a music publishing company, is to determine what type of business entity you desire to form. There are four basic forms any business can take:

Sole Proprietorship
Partnership
Corporation
Limited Liability Company

With the exception of a sole proprietorship, these entities can take on several forms, such a a limited partnership as opposed to a general partnership, an S-Corporation as opposed to a C-Corp, and a member managed LLC as opposed to a manager managed LLC, just to illustrate a few of the iterations. You are strongly advised to seek the counsel of a qualified entertainment attorney and a music business accountant prior to establishing your company.

The decision as to which type of entity to create impacts the liability to which the individual members of the entity can be exposed. In a partnership, for example, each individual member of the partnership is liable for the actions of the other partner or partners. Of course, a sole proprietor is liable for his or her own actions as well. Only corporations and limited liability companies shield the indivudal members from liability impacting their personal assets. For this reason, when forming a music publishing company, it is most frequently advised that one of those two entities be used, as publishers are often the subject of copyright infringement actions, among other things.

The choice between a corporation and a limited liability company is frequently a personal one. The corporation is a more formal structure than the the LLC, involving the selection of a board of directors, a president, sometimes a vice president, and a secretary and treasurer. The limited liability company, on the other hand, can take many forms. It can be member managed, similar to the management style of partnership or it can be manager managed, either in simple arrangement where one person acts as a manager, on in a configuration more like the corporation, where there are individuals serving in the various roles of president, vice president, secretary and treasurer. It is this greater flexibility of management that spawns the popularity of the limited liability companies in today’s culture. One should not be so quick to decide, however, without the input of a good tax consultant and/or attorney.

Once a decision is reached as to the type of business entity the music publishing company will take, it will be necessary to determine a name for the publishing company. This is where forming a music publishing company differs somewhat from other businesses, because of a music publishing company’s interaction with the major performing rights organizations (PRO’s), primarily ASCAP, BMI and SESAC. Whereas a songwriter can only affiliate with one PRO at a time, a music publisher affiliates with all three if it intends to conduct significant business. In order to submit an application, each PRO requires, among other things, that a music publisher give three choices for names in order of priority. So, when choosing a name for your music publishing company, bear in mind that you will need at least nine variations in order to submit applications to the PRO’s.

To illustrate this point, consider the various entities used by Sony ATV Music Publishing Nashville, a major player in the Nashville music publishing arena since its purchases of Tree Publishing and Acuff Rose Music merged two of the giants in the history of the Nashville music industry. One recently charted song by Taylor Swift, Our Song, is owned in part by Sony ATV’s BMI publisher affiliate, Sony/ATV Tree, BMI. Another song on Billboard’s country single chart this week is Rascal Flatt’s Take Me, which owned in part by Sony ATV’s ASCAP affiliate, Sony ATV Tunes, ASCAP. Finally, Sony ATV also has a SESAC affiliate, which goes by the name Sony ATV Sounds, SESAC. A closer examination reveals that each of these entities are separate entities, probably owned in whole or in part by the parent conglomerate. As a side note, Sony ATV Music Publishing Nashville was recently name country music publisher of the year 2007 by all three PRO’s, ASCAP, BMI and SESAC, making it the first publisher in history to do so. Read about it here.

You’ll note that Sony ATV uses a different, creative variation of the name for each PRO affiliate, a pattern often followed by other publishing houses, such as Warner Chappel Music, which has variations such as WBM Music SESAC, WB Music ASCAP, Warner-Tamerlane Publishing, BMI, and Warner Chappel SOCAN (a Canadian PRO).

Smaller publishers may not wish to follow the course of Sony ATV by maintaining separate limited liability companies for each publisher affiliate and parent LLC, as this can lead to greater expense in the formation of the company. Rather, one option would be that one entity can be used for the parent company, and operate subsidiaries under assumed names for each of the publishing affiliates.

Once you’ve determined the names to be used and the types and numbers of entities you’ll be using, the next step is to prepare and file the appropriate documentation with the secretary of state in the state you’ll be operating your business. Information about formation of a business entity in Tennessee is available from Tennessee’s Secretary of State. Then, in Tennessee, you must register the entity in the Register of Deeds office for the county in which your principle place of business resides. Next, you’ll need to obtain a Taxpayer Identification Number from the IRS by filing Form SS-4. Finally, you’ll need to apply as an affiliate at each of the following PRO’s: ASCAP, BMI & SESAC, assuming, of course, that you intend to contract with writers from each of these affiliates. You’ll note that SESAC has a different process than ASCAP or BMI in that the process is more selective and requires that you initiate contact with their Publishers Relation Staff prior to being reviewed for affiliation.

You might also want to explore joining an organization such as the National Music Publisher’s Association, which owns and operates the Harry Fox Agency, an organization that serves as the clearinghouse for the collection and distribution of mechanical and digital license fees.

After this, you need to begin the process of developing agreements that will be used to sign songwriters to your various affiliate companies. Work with a good entertainment attorney to customize and draft exclusive songwriting agreements and single songwriting agreements as an basic first step in this process. Then, you’re ready to start scouting talent!

This article is intended as a basic outline of the steps required to form a music publishing company. It is not intended as, and should not be substituted for, the advise of a good entertainment attorney, which should definitely be retained and consulted prior to starting this entire process. Expect to spend somewhere in the range of $5,000-10,000 in various legal fees to complete the entire process.

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Music Publishing 101, Part 1: A brief history

This blog series will explore music publishing, giving a little bit of history and outlining the basic steps necessary to form a music publishing company. Part 1 looks at a brief history and background of music publishing.

Modern music publishing in the United States can trace its roots to “Tin Pan Alley,” the name given to a group of sheet music publishers who collected on West 28th Street in New York City in the late 19th, early 20th Century, when names like Irvin Berlin and John Philip Sousa were the leading composers. This coincides roughly with the invention of introduction of Thomas Edison’s Gramophone and the phonograph cylinder. Tin Pan Alley publishers were concerned mainly with selling sheet music and piano rolls. The most dramatic shift in popularity from printed music to recorded music did not occur until the development of the “talkie,” when The Jazz Singer was released in 1927.

In 1914, ASCAP was formed to protect the copyrighted music compositions of its members. The organization expanded with the introduction of the new invention called radio in the 1920’s. Because owners of radio stations did not like paying what they considered exorbitant license fees to ASCAP for the performances of musical compositions, the broadcasters formed their own organization, BMI (Broadcast Musicians Inc.) in an effort to drive the license fees down.

Modern music publishers are in the business of engaging composers, i.e., songwriters, and obtaining ownership of their copyrights. In exchange for the copyright, the music publisher agrees to exploit the composition to potential licensees (a process generally referred to as “song plugging”), administer the copyright, collect the mechanical royalties and license fees, and distribute a portion of the collected monies to the composer.

Most music publishers will offer promising composers what is called an “exclusive songwriter agreement” in which the composer is obligated to provide the publisher with a minimum number of commercial musical compositions within a certain period. The composer generally receives a “salary,” which is fully recoupable from future royalties. Again, the publisher gives up the copyright in the musical composition in this type of deal.

Another, less common deal type, which is reserved for songwriters who have some clout in the industry, is called a “co-publishing deal” This arrangement is usually very similar to the exclusive songwriting arrangement discussed above, except that the songwriter only gives up half of the copyright in the musical composition and retains the remaining half.

Less often, music publishers offer “single song agreements” to composers who may have one or two compositions that interest the publisher, but not enough that it feels warrants a longer term commitment. Most major publishing houses do not offer these type of agreements. They are generally the purview of independent and upstart music publishers.

There are myriad gradations of these deals, and the terms in any one agreement can be as varied as an artist’s palette of colors, so if you are interested in music publishing agreements, please contact a reputable music attorney prior to obligating yourself or giving up a copyright.

Tomorrow’s installment of Music Publishing 101 will discuss the basics of forming a music publishing company.

Technorati Tags: Music Publishing , Copyright , Songwriting , Music Industry , Record Labels , ASCAP , BMI , SESAC , Performance Rights Organizations , Exclusive Songwriting Agreement , Single Song Agreement

Last Man Standing – collaborating with other songwriters

See Jane.

See Jane write lyrics.

See Dick.

See Dick write melodies.

See Dick meet Jane.

See Dick and Jane combine their efforts and collaborate together to write a song.

This is one frequent story among Nashville’s songwriting community. On any given afternoon in Nashville, there will be innumerable co-writing sessions occurring at any given moment. Those collaborative efforts certainly produce most of the top hits on the country charts. The odds are, however, that at least 9 out of 10 of those songwriters will not know the implications of collaborating with another songwriter on the creation of a copyright.

Rarely do songwriters consult an attorney or enter into any form of collaboration agreement prior to co-writing. Rarer still is the songwriter that fully understands the important consequences that flow from co-writing with another songwriter.

If a songwriter does happen to consult about this issue, the first thing I tell them is that it is very much like entering into a marriage relationship. When two songwriters get together and collaborate on the creation of musical composition, each songwriter is a co-owner of and equal and undivided interest in the whole copyright, i.e. each songwriter co-owns 100% of the copyright – regardless of the relative extent of their respective contributions. Ownership is not equally divided, as is commonly thought — i.e. split 50/50 (that confusion comes from the fact that the royalties derived from the copyright are usually divided equally).

In the Dick and Jane analogy above, for example, Jane does not separately own the lyrics and Dick separately own the melodies. Dick effectively owns 100% of the song, including both the lyrics and music and Jane effectively owns 100% of the song, including both the lyrics and the music. The concept is very similar to the legal principle of tenancy in common. Unless they agree to the contrary in writing, each songwriter has the right to administer the entire copyright without consulting with the other songwriter, i.e., each songwriter may issue nonexclusive licenses to the entire copyright or issue first use licenses. The only obligation each co-owner has to the other is to account for any profits earned by the exploitation. A co-owner may not, however, without the permission of the other co-owner, transfer exclusive rights to use the work or transfer the entire copyright to a third party.

To be absolutely clear, the Copyright Act does not really define “joint authors,” but rather defines a “joint work” as a “work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole.” 17 U.S.C. 101. The key here is intention — i.e., the parties must intend that their work be integrated or merged to form a united whole at the time the work is created. The legislative history that accompanied the act specifically states that a work is “joint” if the authors collaborated on its creation. See H.R. Rep. No. 1476, 94th Cong., 2d Sess. 120 (1976); S. Rep. No. 473, 94th Cong., 1st Sess. 103-104 (1975).

Take for example the circumstance that arises when a person creates a poem, which is registered as a copyright. Then, later on, a second person takes the poem and modifies the words, adding music to create a song. The situation described is different from the collaborative effort in that there was no intent, at the time the poem was created, to merge it with the second creative effort. The second work, the song, is a derivative work, and its writer needs permission from the creator of the poem to create the derivative work.

While we’re on the subject of derivative works, each co-owner of a joint work may create derivative works independently of each other and without the permission of the other, and, without any obligation to share the royalties derived from the exploitation of the derivative work.

Now, not to further confuse the issue but, in the eyes of the law, there is a difference between co-ownership in the copyright and split of the royalties. To get back to the Dick and Jane analysis, the typical understanding is that Dick and Jane would split any royalties received from the exploitation of the copyright on a 50/50 basis. It is important to understand once again, however, that this understanding can be modified with a written agreement between the co-writers. A songwriter whose reputation is strong enough can certainly request that he or she receive a greater percentage from the royalties, and even ask for a greater percentage ownership interest in the copyright. These types of exceptions, however, must be expressed in writing between the parties in order to be enforceable.

Another complication arises in circumstances where a party merely contributes an “idea” to the collaborative effort. Is that person entitled to be a co-owner? I’ve had this issue arise in litigation. Two parties are collaborating on a song and have most of the song written. In walks a friend who is also a songwriter. He listens to the song and contributes an idea that is incorporated into one line of the song. He leaves, the song is finished, and becomes a hit. Does the third songwriter have an interest in the song? The answer to the question is inevitably determined by the particular facts and hinges on whether the third party merely contributed an idea, or actually contributed the expression of an idea.

As a final observation, let’s overlay the life of the copyright over the co-ownership of a collaborative work to give our brains a final flash fry if you will. Assuming the work to have been created after January 1, 1976, the life of the copyright is life of the author plus 70 years. In the event of a joint work, however, it is the life of the surviving author plus 70 years. What this means in realty is that one of the co-writers in a successful hit song, i.e., the last man standing, will eventually become co-owners with the heirs of the deceased songwriter, either in the form of a wife or a child.

Most songwriters, of course, are not thinking this far down the road when they make their daily co-writing appointments. But that’s the real thrust of this article. If you’re a songwriter, you should consider the possibility of a collaboration agreement. Most songwriters, I admit, do not think about this sort of thing because it cramps the creative vibe that needs to be created in a collaborative effort. This, in my opinion, is not a wise idea. At the very least — and this is not my recommendation — the writers should have some conversation about the consequences of their efforts. Considering the consequences, the best course of action would be to consult with qualified legal counsel and get a collaborative agreement drawn up and signed — or at least have a written statement of intent signed by both writers — at some agreeable point before the co-writing session begins, so as not to interfere with the creative efforts.

Technorati Tags: Songwriting , Music Lawyer , Music Row , Collaboration , Nashville , Music City , Copyright Law , Copyright Act of 1976 , Music Law , Entertainment Law , Entertainment Lawyer

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Holy Copyright, Batman! The Legal Doctrine of Scenes a Faire

Magic Hat This article originally appear in the print edition of Law on the Row, Volume 2, Issue 1 on September 9, 2002.

Imagine two musical works written in a minor key using a standard jazz progression such as I-IV-II-V. Further imagine that Work B is alleged to be an infringement of Work A. The author of Work B hires an expert who testifies that the 16-note melodic line in Work B that is identical to the 16-note melodic line in Work A is not entitled to copyright protection because that melody is “dictated” by the jazz chord progression, and, therefore, there is no infringement. This analogy describes a new and novel use of the legal concept known by the French moniker, scenes á faire.

The phrase scenes á faire refers to certain distinct elements — characters, settings, or incidents, for example — in a copyrighted work that are absolutely necessary or indispensable in describing a particular “scene.” See, Atari Games v. Oman, 888 F.2d 878 (D.C. Cir 1989). For example, in creating a story about the music business in Nashville, one would expect references in the story to such elements as Music City, Music Row, songwriters, producers and the Bluebird Café. If a copyrighted novel contained those elements, those specific portions of the work relating to the scenes faire would not be entitled to copyright protection, and a second novel containing the very same elements would not be an infringement.

Thus, the concept of scenes á faire is applied in circumstances such as those described to limit the scope of copyright protection.

It is also important to note that the concept of scenes faire has traditionally been applied specifically to infringement actions involving novels, literary works and computer programming code. More recent attempts have met with success, however, in applying the doctrine to the comparison of lyrics alleged to be infringing. Even more recently, novel attempts have been made to apply the concept of scenes faire to the musical phrases and melodic lines of musical compositions

If a position such as the one described in our analogy could be argued successfully, then the amount of damages to which the author of Work A would be entitled is severely reduced, if not eliminated entirely. The copyright owner would end up with, at best, a musical work where certain sections of the melody and certain sections of the lyrics are entitled to protection — indeed, he have a copyright full of holes!

Of course, a simple mathematical calculation yields literally hundreds of thousands of permutations consisting of acceptable melodies which may be superimposed over the jazz chord progression common to the two works, yet this simple fact does not prevent the use of this argument in copyright infringement actions. Although the issue has arisen in the context of summary judgment, as of yet no court has issued a direct ruling on the application of scenes faire to melodic phrases or chord progressions.

DIGG IT!

Taming the “Big Bad Record Company”

What songwriters can do to improve their negotiating strength in an entertainment deal

A very common theme among my songwriter and artist clients is the subject of how they were “ripped off” by their record label and/or music publisher (for purposes of this general publication, I’ll refrain from using the actual, more vivid terms often used to describe the process!). They often feel as if they have not received the benefit of the bargain.

As an attorney who negotiates deals for these types of clients on a routine basis, however, I am frequently placed in the precarious position of walking a tightrope between trying to obtain as many concessions as possible from the opposing party while not pushing so hard as to, in my clients’ words, “blow the deal.” My clients want the best deal possible, but are very rarely willing to walk away from a deal if the terms and concessions are not good. As any good negotiator can tell you, your deal is only as good as your best alternative to the negotiated deal.

In some ways, this willingness to settle for less in order to salvage the deal feeds the very beasts songwriters and artists need to tame, i.e., the record companies and music publishers. Artist think that record companies have the ability to give them instant stardom – in fact, that is the dream of almost every struggling songwriter and entertainer. On the opposite end of the spectrum, however, record companies most certainly know that many artists are willing to “sell their soul” in order to obtain a deal.

The infamous controlled composition clause is the perfect example of how far an artist is willing to go for “the deal.” The United States government requires that a copyright owner be paid a minimum statutory rate for the mechanical reproduction of their creative work. The record label, however, turns to the artist and says, “Despite the government minimum, will you consent to accept only seventy-five percent of that to which we’re required to pay in order to get a deal?” “Furthermore,” the record label says, “we’ll only pay you seventy-five percent of statutory rate on ten compositions, no more, o.k.?” As incredulous as those questions might sound, the majority of artists throughout the history of the controlled composition clause have answered “yes” to those questions. From the record companies’ perspective, this negotiation process is just good business.

This disregard for the government’s requirements does not often occur in other industries outside of the music industry. If a company interviewing a potential employee suggested that the employee agree to an hourly rate that is less that the minimum wage, the employee would balk, and most likely the company would be reported and fined. The difference, of course, is that the employee in this scenario has a multitude of alternatives, as there are numerous companies to which he or she can apply that will pay minimum wage. That is not the case, of course, with entertainers. It has been said one’s odds of getting struck by lightning are greater than the odds of getting a record deal! Most entertainers are desperate for “the deal.”

So, the question then becomes “What is the deal worth to the songwriter or the artist?” Is it worth giving up possession of your songs without the possibility of reversion in order to receive a monthly draw in order to get that publishing deal? Is it worth giving up twenty-five cents on every mechanical dollar earned in order to receive a cash advance and the remote possibility of future royalties from a major label in order to get that record deal? If the songwriter or artist has no alternatives, then the answer to those questions may very well be yes. Or, it may be that no deal is worth giving up such concessions. The answers to these questions are as diverse and individual as the artists and their particular situations.

In order to better understand their own position, then, songwriters and artists should carefully consider their “sacred cows”– i.e., the points on which there is no negotiation – prior to entering negotiations. The difference I have witnessed between fresh young songwriters and experienced writers who have been around the Row for a while is the wisdom to know what is important to them and what is not. If a songwriter has a young child, she is likely to be more willing to walk away from a deal without a reversion clause than is a single songwriter with no family obligations. The recording artist who has a track record of selling more records the first time out than any other artist is in a better position to walk away from a deal that includes a controlled composition clause. The potential recording artist who has offers from three major labels is in a better position to obtain a higher royalty rate than the artist who has been offered a development deal.

The point is, the songwriter and the artist should think about what is important to them in terms of a deal and carefully consider their “bottom line,” the point at which they are willing to say “”no deal.” These issues should be discussed with an experienced entertainment attorney. Develop two lists with your attorney: (1) a wish list of provisions for improving the deal and (2) a “drop dead” list of items which must be included in the agreement or the deal is off, which hopefully includes a good alternative to the negotiated deal. Remember, the more alternatives a person has to the deal in hand, the better his or her negotiating strength.

This article originally appeared in the print edition of Law on the Row, Volume 2, Issue 1, on March 21, 2001.