MBU 1110 GRIFFIN lecture 2 copyright fall 2019

3. What is Copyright?
Copyright seeks to balance the interests of Authors
with the interests of society.
Copyright protects the EXPRESSION OF IDEAS..
It does NOT protect IDEAS.
For the EXPRESSION to be protected, it must be FIXED IN A TANGIBLE
MEDIUM.

6. Bundle of rights…. The 6th Right
#6. Sound recordings may be performed publicly by the use of
Digital Audio Transmission
Result: Reproduction
Distribution
Performance
Derivative
Display
& Digital Audio Performance (Transmission)

7. Copyright Duration:
Individual:
Originally for shorter periods and with different requirements.
Now:
Life + 50 Years – 1976 Act
LIFE + 70 years – 1998 Sony Bono Act – Supported by Disney &
Gershwin
More than 1 Author – Use the death of the longest surviving
author
Pseudonymous or Works for Hire = 95 years from Publication
or 120 years from Creation, whichever is SHORTER.

13. Mechanical Royalties for Streaming
•On-demand (or interactive) streaming is unique
because it is primarily licensed and paid by the
streaming services. These interactive streams pay
fractions of a penny per stream to the songwriters
and music publishers for two different royalties:
public performance and mechanical. Payments for
streaming mechanicals land in the ballpark of
about $0.06 per 100 on-demand streams.

14. The average per-stream royalty for both the
composition and recording on Spotify is around half a
penny. The sound recording average is about $0.0038
per stream. That leaves $0.0012 to the composition,
which is then split 50/50 between performance and
mechanical royalties.
• Using this figure, it would require approximately 1.6
million on-demand streams to earn $1,000 in
streaming mechanical royalties.
• The mechanical streaming rate is about $0.06 per 100
streams, or $0.0006 per stream.

15. To earn $1,000 in mechanical royalties here, you
would need approximately 11,000 downloads or
physical albums sold.

16. DOWNLOAD MECHANICAL ROYALTY FROM MAJOR
LABEL TO MAJOR PUBLISHER

17. MECHANICAL ROYALTY PAYMENT TIME IS SHORTER
FOR INDEPENDENT ARTISTS

18. PHYSICAL MECHANICAL ROYALTIES

19. EXISTING STREAMING MECHANICAL PAYMENTS
LICENSED THROUGH MUSIC REPORTS

20. FUTURE STREAMING MECHANICAL PAYMENTS
UNDER THE MECHANICAL LICENSING COLLECTIVE
(MLC)

21. FOR INDEPENDENT ARTISTS THAT CONTROL THEIR
COPYRIGHTS AND SIGN UP WITH THE MLC

22. HOW DOES THE MMA AFFECT MECHANICAL
ROYALTIES?
• The Music Modernization Act of 2018 helped update various aspects of the
music publishing sector, especially for the mechanical streaming royalty
rate. As previously mentioned, the MMA creates a mechanical licensing
collective similar to how Europe handles its interactive streaming royalties.
Like Europe, the MMA creates a blanket license and a Music Licensing
Collective (MLC) to administer streaming mechanical royalties.
• This blanket license system is designed to make it easier for streaming
services to license songs without fear of copyright infringement for not
correctly matching payments. They pay into the MLC coffers and the MLC
figures out who to pay from there. This removal of legal liability was a big
reason the major streaming services supported the MMA.

23. Under this law, virtually all U.S. mechanical streaming income will flow through
the MLC. The MLC will also create a centralized copyright database, making it
easier to track down rights owners, as well as for interested parties to claim their
“black box” royalties. Many of the woes that brought MMA to law were due to
sloppy record keeping and incomplete registration data from rights holders and
creators. The aim of the MLC’s centralized database is to clear up this confusion
and ensure accurate/timely payments.
Additionally, the MMA has changed the rate setting proceedings for how the CRB
can consider future mechanical royalty rates. In the past, the judges were barred
from considering other free market rates (such as what a song could earn in a TV
show or movie). Under the new MMA law, judges will be able to consider rates
under a willing-buyer, willing-seller standard. This means a fair-market value will
be considered in future mechanical royalty rate proceedings, which has never
been done before. The hope is that this will cause mechanical royalty rates to
rise.

24. FAIR USE:
https://youtu.be/CJn_jC4FNDo

25. FAIR USE: Exceptions to the Exceptions
Fair use is an affirmative defense. Society often benefits from the unauthorized use of
copyright protected materials, such as when the purposed of the use serves education,
scholarship or the informed public.
How can you tell in advance if something is Fair Use? YOU CAN’T… But you can look at
the signs…
1) What is the purpose or character of the use? Is it commercial use or non-profit?
2) What is the “nature” of the copyrighted work?
3) What is the amount and substantiality of the portion used in relation to the whole?
4) What is the potential effect on the the market for the protected work?
As a general rule, if you are using a small portion of someone’s work in a non-commercial and/or con-
competitive way, and the purpose if to benefit the public in some way, then look at Fair Use. ON the
other hand, takings of larger portions or a work and commercial uses are much less likely to be
considered Fair Use.

26. Copyright Formalities:
1. Registration
2. Notice – Prior to 1976, no notice = public domain
3. Deposit
Upon entering the BERNE CONVENTION AGREEMENT on MARCH 1, 1989,
the US no longer requires these formalities for copyright to exist. But it is
encouraged to follow all of them.

29. Some Copyright Defenses:
1. Independent Creation – Plaintiff must prove both ACCESS and COPYING
2. Fair Use
3. Public Domain
4. First Sale – An owner of a physical copy can sell or transfer ownership of
that particular copy.
5. Statute of Limitations
6. Use was authorized by a license
7. Statute of Limitations
Innocent Infringement is not a defenses, but it can lower potential
penalties

35. Works for hire details.
There are 2 ways a work for hire is created:
1. Work prepared by an employee in the scope of employment.
2. Commissioned works (require a signed agreement)

36. SOUND RECORDINGS:
The sound recording does NOT have a performance right under the
1976 US law. (It was added to the digital performance of the SR, but
still does not exist for analog transmissions)
This means that traditional radio does not have to pay anything for use
of sound recordings. BUT they do have to pay for use of the
composition. This means songwriters get paid and performers don’t.
Limited performance right
given by the Digital
Performance Right in Sound
Recording Act of 1995

38. Trademarks vs Copyrights
• Copyrights protect the “expression of an idea.”
• Trademarks indicate the source of a good or service.