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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.
1.
The Basics
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
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
2.
Copyright and Corporate Power
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
Kenny Rogers v. Capitol Records

Source: Attorney Chris Taylor
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.
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)
3.
Copyright and Music Aesthetics
Some Music Uses Don’t Require Permission…
Cover Songs

Public Performances

Quotation

Parody
And Some Do…
Sampling

Video Games

Movies/TV

Streaming On-Demand
4.
Digital Mayhem
Music Has Gone From This…
…To This.
Old Definitions Have No Value
Compulsory

Programmed
(Radio)

??????????????????

Contractual

On-Demand
(Retail)
Old Products and Formats Have No Value
Old Products and Formats Have No Value
It’s Taken the Industry 15 Years…
40,000 Customers Sued

Bad Laws & Copyfight

Hundreds of Startups Dead

Massive Bad Will
…But Change is Slowly Coming
Newer Business Models

Thriving Indie Markets

Newer Copyright Models

Support for Change in D.C.
We’re Not Out of the Woods Yet
Thank you.
Aram Sinnreich, Ph.D.
sinn@rutgers.edu

Books by Aram Sinnreich
Mashed Up (2010)
www.mashed-up.com
The Piracy Crusade (2013)
www.piracycrusade.com

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Music and Copyright: A Hot, Stinking Mess

  • 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.
  • 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. 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
  • 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. Kenny Rogers v. Capitol Records Source: Attorney Chris Taylor
  • 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. 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)
  • 11. Some Music Uses Don’t Require Permission… Cover Songs Public Performances Quotation Parody
  • 12. And Some Do… Sampling Video Games Movies/TV Streaming On-Demand
  • 14. Music Has Gone From This…
  • 16. Old Definitions Have No Value Compulsory Programmed (Radio) ?????????????????? Contractual On-Demand (Retail)
  • 17. Old Products and Formats Have No Value
  • 18. Old Products and Formats Have No Value
  • 19. It’s Taken the Industry 15 Years… 40,000 Customers Sued Bad Laws & Copyfight Hundreds of Startups Dead Massive Bad Will
  • 20. …But Change is Slowly Coming Newer Business Models Thriving Indie Markets Newer Copyright Models Support for Change in D.C.
  • 21. We’re Not Out of the Woods Yet
  • 22. Thank you. Aram Sinnreich, Ph.D. sinn@rutgers.edu Books by Aram Sinnreich Mashed Up (2010) www.mashed-up.com The Piracy Crusade (2013) www.piracycrusade.com

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