It has occured to me that most artists seem to forget that it is called the "Music Business" or the " Entertainmanet Industry" for a reason. So very few artists seem to be aware that they really need to protect themselves, their music and even the name of their band. Most artist do not even know that, under certain circumstances, it is totally legal to perform under a name that is currently being used by another band, elsewhere in the country. It is to these, and other, legal issues that I am devoting this page.
Please take the time to check out some of my music at the Cheyenne Music site
For questions and personal interaction. Please, by all means, got to the Vixette Review Forum
Page 2 Articles:
"Protecting your band name and your music"
"The money go-round"
"Am I allowed to breath without a license?"
Page 1 Articles:
"How to succeed in the music business"
"Singing tips for vocalists"
Page 3 Articles:
"What? I need to be a publisher too?"
"Personal Niche: your key to success."
Protecting your band name and your music
Before you begin to read the following atricle, I would like to clarify that, although the last section, on Copyright, was of my writing, the bulk of this article was copied from the efforts of Michael P. McCready. I stumbled across his articles, quite by accident and found this amazingly informed man ... who is also an attorney, specializing in the music industry. I HIGHLY recommend reading his work.
The two key concepts involved in "protecting" the name of a band are "territory" and "priority". Territory means the area where you use the name, e.g., Chicago, Illinois, Mid-West, United States, world-wide, etc. Priority, as the word implies, involves who uses the name first. These two concepts work together to limit the scope of protection for a name.
If you started using your name first, you can prevent others from using it. However, the law allows you exclusive use of the name only in the area where you have used it. For example, if you started playing the Chicago area in 1989 and never played or distributed music outside the Chicago area, you could not prevent a band from using the name in Florida. However, they could not use the band name in Chicago since you were the first to use the band name there. You also may acquire the rights to your name for Chicago in 1989 and nation-wide in 1992 when you release your first record for a major label. If someone started using your name in another part of the country in 1990, you could not prevent their use in their territory since they have priority in that area.
A famous case involved two bands both performing under the name, "Flash". The first was a small band in San Francisco who had never recorded a record and the second was an English band who had a major label deal. Since the San Francisco "Flash" was a prior user in that area, the English "Flash" was not allowed to sell albums in the Bay area.
Before investing money in the name of your band, you should investigate whether anyone else is already using the name. If someone is already using your name, as explained above, they have priority in their territory. A good place to start is BMI and ASCAP. Both of these organizations will do a search of their rosters for conflicting names. You may also check Phonolog which is a list of albums and can be found at many record stores. Also check out the annual Billboard International Talent & Touring Directory. Another place to look would be on-line. Bandreg.com is a good site to begin your search. There are also many resources at libraries in large metropolitan areas. The librarians will also assist you in doing a trademark search of state and federal trademarks. The final place you may consider searching is the Secretary of State of California and New York. Since these are the two largest "entertainment" states, they can be helpful as well. The Secretary of State can tell you if they have any businesses registered under the proposed name. You can never be guaranteed that no one is using your name somewhere, but these avenues are a good place to start.
After checking the availability of your name, you should take steps to protect that name. As stated above, priority of use in a specific territory is the key to protecting a name. Keep careful records of your public use of the name. Record where and when you played or sold records, and any publicity so as to prove what territory you have used the name in and for how long. As for legal protection, there are a few routes you can take.
You cannot copyright a band name. The correct legal protection is a "trademark." Within trademark law there is a category called "servicemarks." A trademark identifies a product while a servicemark identifies a service. Since a band is in the business of providing entertainment services, a servicemark is the proper tool to protect the name of a band.
The amount of protection you want for the band directly reflects the amount of money it will cost you. The least expensive route is a state trademark. Fees vary from state to state, but they are generally under $ 100. A state trademark gives you protection throughout the state you register. You can get the application by calling the Secretary of State. If you don't have a record contract or don't tour nationwide, I recommend a state trademark to start.
The next step is a federal trademark. A federal trademark gives you rights throughout the entire United States. The application fee for a federal trademark is presently $ 245. If your music is distributed throughout the United States or you do extensive touring, you may want to obtain a federal trademark. These forms can be obtained by calling (703) 308-4357.
Since the entertainment industry is now world-wide, there are 175 countries that allow the registration of trademarks and 60 which allow the registration of entertainment servicemarks. Even if you focus on the five or so most important jurisdictions, (Great Britain, Canada, Germany, Mexico and France), you are still talking a great deal of money for trademark protection on a worldwide basis.
Finally, the "(R)" symbol: what does it mean? Unlike the copyright symbol, "(C)" (which anyone can use, whether their work is registered with the Copyright Office or not), the trademark symbol, "(R)", can only be used if you have a federally registered trademark. By using the "(R)" symbol, you put everyone on notice that you own the trademark and anyone using it would be a wilful infringer. There is also a "TM" symbol used occasionally. This has no legal definition or significance, but is generally used to claim ownership of an unregistered trademark.
In conclusion, when starting a band, you should: first, research the proposed name for conflicting uses; second, document the dates and territory where you use the band name; third, take steps to protect the name through servicemarks.
Protecting your music is even easier. A copyright "(C)" is, technically, already the property of the owner upon completion of his/her written work. Actually, there are two copyrights on a single recorded song. First, there is the copyright that everyone knows about, the actual written words and music. Second, there is the "sound recording," this is something completely different and not what I am discussing here. For an in depth explaination of copyrights, please refer to Michael P. McCready's web site. I'm just dealing with the basics that EVERY musician should know and one or two simple tricks to protect yourself.
The first step to actually protecting your work is thru the Postal Service. Believe it or not, stick that original piece of work in a self-addresses HAND-WRITTEN envelope and mail it to yourself. This establishes an actual LEGAL date of your efforts, via the postmark. I've had a couple people say to me, "Yeah, but how do they know what was in that letter?" Good point, but I have an answer for that one too. Simply write, lightly, in a colored ink (other than black ink, as postmarks are done in black), across the upper right hand corner, the name of the work in reference. Then, put on the stamp ... don't worry about covering part of what you have referenced; part of it should be covered, as it establishes that the reference was written BEFORE the stamp went on, and BEFORE the postmark.
So, why don't I just write a song, contact the Copyright Office and have it officially recorded? Eventually, you do just that. But there are three reasons that you do NOT do that right off the bat: 1) Inconvenience: do you really want to be dealing with the federal Government every single time you write a song? 2) The money: Granted, it is only about $ 30 per copyright. However, let's take just the music I have recorded on my 3 CDs, and forget about everything I have written that has not been recorded... that would be about 40 songs. 40 songs, at $ 30 each, would cost about $ 1,200 to copyright all of them. The fedral Copyright laws allow you to attain a copyright on an individual piece of work - or - as a collective piece of work. In other words, you could copyright each song on a CD - or - copyright the CD as a whole, thus encorporating ALL the orginal work contained in it under one copyright. By doing it that way, Cheyenne is able to federally copyright 3 CDs ( a total of 40 songs) for a grand total of $ 90 ... We just saved ourselves $ 1,110. 3) Time... we are dealing with the government here. Do any of you think they do anything quickly?
Lastly, attaining a federal copyright "(C)" is very easy to do. Simply go to http://www.copyright.gov. Directions, addresses, answers and all the forms required can be attained there.
Again, I hope I have helped someone.
Avec amour,
Lisa
CD #1 - Time for me
Yes, that is me on the cover.
We had originally decided
on a completely different cover
for our first recorded album
together. But, when Mitchell
had a roll of film developed
he discovered that, apparently,
the film had been in that camera
for a very long time and all the
pictures came out with a decidedly
yellowish tint. One of those
pictures was a picture of me,
standing on a rocky schoal at
sunrise, on Deerfield Beach, in
south Florida. The resulting
picture was an amazing silohette,
backed by the Atlantic Ocean.
As we were still up in the air
about what to call our new CD,
we decided the peacefulness and
solitude of that picture would
work extremely well with the third
track on the album, "Time for me."
The money go-round
So you have a great rockin band, filled with a bunch of top-notch musicians that can play well enough to have the three remaining members of Led Zepplin bow down and pay homage. Everywhere you go, you pack the place and everyone says that you are going to be the next major star. Then why in God's green earth doesn't anyone, in a position to make that happen, tend to be able to see that? Why do the radio stations, record labels, music execs and major venues avoid you like the plague?
Take my former group, Cheyenne, we were performing from coast to coast, in serious nightclubs, opening for platinum recording artists and have been labeled as being the next Shania. I have had three major labels approach me, plus countless minor labels; yet, we never managed to get past our initial meetings with them. Why? What was I doing wrong? It is simple, this is not the 1960s and the music industry does not operate like that anymore. Back then, people simply performed their hearts out, in the hopes that, one day, they will be discovered and signed to a major recording contract, enroute to amassing a fortune playing music and partying. The truth is, it does not work that way, at least not anymore.
The music business is just that, a business. Keep in mind, you are the talent and most of those business guys hardly know how to hold a guitar, much less play one. However, they are bright enough to figure out how to use your talent to line their pockets with as much of your money as they can get their greedy little paws on. Plus, they have managed to do it in such a way that they hardly have to do any work to get your money. Think about it: on a scale of 1 to 10, your band is an 11.Do you have any clue how many bands get signed that are perhaps a 7, or less? I am sure you have seen and heard acts that you know you are 100 times better than they are. So, why would they sign a 7 and leave your 11 out in the cold, without so much as a "thanks, but no-thanks?" Packaging: that's why. These music execs have long discovered that they can make just as much money, if not more, by representing people that are already pre-packaged for them. Why work when I can make money the easy way?
By now, I am sure that I have lost and confused allot of you. That's fine, that is sort of what I was trying to do. To all of you out there who are seriously considering getting into music or have already been in the business for a while, but have nott really gotten past the local venues: BEWARE: the music industry is a dirty, dirty business. You must educate yourself in the evils of this business and learn how to protect yourself and your music in every phase and nuance of what you do.
Let me start with what I refer to as "Packaging." If an artist writes their own music, they must get paid for that music. As I mentioned in another article, you have two copyrights: the written work and the actual sound recording. Well, someone needs to get paid for each of those items. If you wrote and performed, you get both payments. The writing payment comes through a licensing company (BMI, SESAC, ASCAP or others. But, those are the major three).Then the sound performance copyright payments come through a publisher. - Please read my next article, on "Running your own publishing company". - Just a quick note on running your own publishing company, if you do not have a publisher, the label will act in that capacity, and collect every single cent from it!If you are performing someone else's written work, they MUST be affiliated with one of those licensing agencies. If they are not, no label will touch you. By now, you may be wondering, "Why not?"
It is all about money and who gets paid in as easy a manner as possible. Let's take Sony and BMI, as examples. Do you really think some business exec is going to sit down and write out 20,000 checks to 20,000 different artists; take the time to track when and were every song by every one of their artists is being played; or, do you think Sony would much rather write out one bulk check, encompassing all their artists, and send it to two or three different agencies that do all that stuff for them? BMI is such and agency. They will take a small fee for their services and redirect the money to the publishing companies and the artists. Without your music being affiliated with BMI, the record label can run the risk of excess audits, copyright infringement suits (if one of their artists stole a song), and endless hours of exhaustive paperwork. The truth is, these people want to put in as little effort as possible.
Then, there are the writer's guilds, such as SAG (no, not the Screen Actors Guild; but the: Songwriters of America Guild) and the AFM union (American Federation of Musicians). Your affiliations with organizations, such as these, will also go a HUGE way in establishing professionalism and credibility. In todays law suit happy world, everyone seems to want things handed to them with as little chance of problems as possible.Hey, a woman sued McDonalds because she was stupid enough to spill coffee on herself and cited that no one told her that the coffee was hot. She won the law suit! Then of course, there was the law suit in Texas, a few years back, when a man sued the Winnebego company and won a new Winnebego and a couple million dollars. Apparently, this rocket scientist, got the jury to believe that he really was mislead to think he could drive down the highway at 60 MPH, set the cruise control, get out of the driver's seat and go to the back to make himself a cup of coffee. Needless to say, a few monents later, his Winnebego drove off the road and crashed. yes, this really happened and he really won the law-suit. Scary, huh?
So, your band is an 11 and Sony has a choice between your 11 and the band that is only a 7. You play in every major joint, packing the house, within a 300 mile radius and even have a few professional demos of your "sure to be hit" originals. Meanwhile, that other band barely fills a coffee house 3 miles from their workout studio, but they are affiliated with BMI, have their own publishing company and each of the members of the band are all members of the AFM local 153 (That is the San Jose, CA, local, by the way) and all their original music comes from writers that belong to SAG. Sony, or any other label will sign the 7, every single day of the week. Sure, IF Sony went with you, they could make dollars in 2 years. But, why would they want to bother with that? They can easily make off the other band and with the time it would take to "package" your band, they could sign 10 bands that are already pre-packaged. Thus, they get to make in the same amount of time it would have taken to make from you. Plus, there is no guanantee that any given band, regardless how good they are, will not suffer some serious problems down the road. For instance, if your lead guitarist gets your bass guitarist's wife pregnant, you just may have a problem. If the wife just happens to be the lead singer, you may have an even bigger problem. Don't laugh, I know a group where exactly this situation happened. A little extra money and a bit of fame has a tendency to go to people's heads .. not to mention, their egos. Music execs know this. They know they cannot have guarantees that you will be the perfect band for them and will ALWAYS perform to their expectations. But at the very least, they will word contracts that will always work in their favor and select only the musicians and bands that have proven credibility and show themselves to be of the least risk to the label.
Joining or becoming affiliated with any licensing group, writers guild or union is very easy to do and not very time consuming. With the guilds and the union, there is a fee, but it is negligible, compared to the credibility gained. With BMI, SESAC or ASCAP, you only join one. Personally, I belong to BMI, but it truly is irrelevant which one you join. To contact any of these agencies, simply check your search engine. You will find a ton of links.
There are also a number of industry terms every serious musician should be aware of and know what they are and how they work. Here is a list of some of the basics:
ADVANCE: Someone says to you, "Hey, I just got signed to EMI. They are giving a $ 250,000 signing bonus and 15% royalties." What does that actually mean? Technically, it is not a signing bonus, it is an advance. An advance is the payment from a record label to an artist in advance of royalties to be earned in the future, and recouped by offsetting those future earned royalties against the money advanced. In other words, when a label "advances" a band 250K, the label pays itself back by retaining the first 250K worth of royalties for itself instead of passing it along to the band. The process of keeping the royalty money to pay back an advance is called recoupment, which is another way of saying that an advance is recoupable from royalties. Advances are usually non-refundable. Whether you succeed or flop, you get to keep that money. However, flops may run into a small clause in a contract that allows the label to "cut" or "release" the band. When this happens, good luck getting a new contract with anyone else.Also, keep in mind that a label will do whatever they can to slip whatever they can by you in that contract. In many cases, the band may be required to use that advance money to fund the costs of their own recordings, studio time, packaging, artwork, labeling, stamping and, in rare cases, distribution. Be sure you know exactly what your financial responsibilities are, before you sign anything. Plus, keep in mind, with MOST ALL MUSICIANS, the advance is the last cent they will ever see from a label. I was actually offered a contract that would have entitled me to a ,000 advance and 15 - 20% royalties, on a 3-record deal. The contract required Cheyenne to record 3 CDs (a minimum of 12 tracks each) and to cover the expenses listed above (except for distribution). We sat down and figured it all out. They would have us under contract for 3 years. Odds are, unless we were a major, major act, we would never see another dime. So, how much would each of us make? Hmmm... let us examinie this a bit further: After you take into consideration that each CD would cost us about 20 - 25K to produce, another 10K for stamping, then the fees to people like the producer, the sound techs, the crew, etc... We determined it would cost between 40K - 50K, per CD. Thus, we would still have almost 120K left over. Almost 120K? That sounds good, does it not? Not really, we are locked in for three years and cannot pursue any other interests besides that of the label. By the time the money would have been split up between the band members it would give each of us about $ 20,000 or an annual salary of just over $ 6,000, or $ 500 per month, for three years. Now, had that contract EXCLUDED our excessive financial responsibilities (and a few other minor details I noticed), I would have signed it in a heartbeat.
ANCILLARY REVENUE STREAMS: Not purely a music term, but a phrase that explains that artists and bands will make money from a variety of alternative sources of revenue, rather than merely relying on the profits made from the sales of CDs. This is nothin new. Bands have always supplemented their incomes by playing shows, selling merchandise like t-shirts, or licensing their songs to TV shows, commercials or movies. There again, you have to be sure that you have protected your name, your music and have the rights to do this. Some labels are known to place limits on their artists as to what they can and cannot do. For instance, if EMI has arranged for T-shirts with your band name and logo on them, they would seriously object to you, the actual artist, having a whole new batch of T-shirts printed up and selling them independently of the label. As far as TV, Radio, Movies and/or other commercial mediums are concerned: Unless you are affiliated with one of the licensing agencies, it is very unlikely any of those mediums will touch you. And do not think that this does not apply to you, if you are merely a house band at the local tavern. Unless you actually have a contract, with the owner (or representative) of the tavern, specifying what is being sold, when, to whom and where the profits are going; that owner can claim that the merchandise was sold on his premises and is entitled to part or all of the proceeds. I have seen this happen.
AUDITING THE LABEL: This means just what it sounds like it means. When artists don't believe the numbers they are being told (how many records they have sold, etc.) they have to pay for a lawyer to file for an audit and they have to pay their accountant to go to the label and try to make sense of the numbers. Even if an accountant finds that the label has been grossly negligent in its payments to the artist, in most major label contracts the only penalty imposed on the label is to pay the amount that it owes to the artist. (plus legal fees, only if negligence can be proven.)
CROSS COLLATERALIZATION: The act of the record label applying the royalties or revenue streams from one record against the debt from another one. A simple example: if the first record cost $1 million to make and only generated 600K in royalties, but the second record cost 500K to make and generated 700K in royalties, the debt from the first release (400K) would eat up the profit of the second (200K) and the label would still not owe the artist any royalties other than the mechanicals. In fact, in this example, the record label would still be seeking to recoup the remaining 200K - that debt would be applied to the royalty profits of their third release.
CONTRACT: I find it so amazing how many musicians and bands have no clue what this is and even less of a clue when and why they need one. Most people think, when they hear "Contract" that means that some sort of major recording company is making some sort of offer. I some cases, yes, that is exactly what it means. But, in MOST cases, it is one of the tools of everyday music industry business. You and your band are going to play at "Jacks Tavern" on Friday night, for $ 300. After your show, Jack tells you that he didn't make enough at the door and hands you $ 200. Or worse, Jack tells you that you owe him, because of all the beer you and your band drank up. What are you going to do? What can you do? You could sue him, but with no contract, the attorney's fees would be considerablely more costly than the $ 300 you are due. The basic contract does not need to be some sort of a 40-page, legal babble document that could confuse even the best Harvard Law School grads. Essentially, something written on a bar napkin will work. The wording of the basic contract would be: "Band agrees to play for 3 hours, at Jack's Tavern, on Friday, April 15, 2004, for $ 300." That's it, a member of the band and the owner (or owner's representative) both sign and date it... done deal! Now, if you are agreeing to play in 2 or 3 different sets, add that. If you are agreed that the band gets the first two rounds free, add that. If the owner states that you will get paid a percentage of the door... add that. If there needs to be special arangements for power, lighting or equipment... add that. If you make arrangements that the band will be paid a minimum amount, for just showing up and they are not able to meet your equipment requirements... add that. But, be warned, in most cases, any member of the band can sign such a contract, thus binding, legally, the remaining members of that band to that contract. The only exception to this would be pursuant to a previously signed band member agreement. Wherein, it is documented, previously, in writing, that all contracts are to be signed or agreed upon by more than one band member. Generally, most all bands do not even sign any sort of band member agreement, and if they do, the signing of play contracts is usually a topic left uncovered. So, if your guitarist agrees to play at Jack's Tavern and your drummer's daughter is graduating kindergarten that night. Sorry, you need to find a new drummer for that night or your drummer will have to miss his daughter's kindergarten graduation.
Alright, I mentioned allot of additions to the basic contract. Most bands can easily write up on their computer a standard contract that they can use on a regular basis. For instance, a very common contract would appear thusly (I'll use my own band for the example):
Cheyenne, a 6-member band, in the Country music genre, hereby agrees to perform for _3_ hours at _Jack's Tavern__, on __Friday___, __4/15/04__, for the sum of __$1,200.00__ and __0%__ of the door or gate fee.
Pursuant to the following conditions:
The music performed will be in the country, rock and blues style and consist of mostly original music, written, oranged and styled by Cheyenne. However, a minimum of _20__% of the show will consist of popular syndicated music (cover tunes).
Cheyenne will split the agreed time to be played into __2_ seperate stage appearances (sets), with _15__ minute break(s) between each set, for a total of __90_ minutes per set.
Each member of the band is entitled to _3_ alcoholic drinks, through the corse of the night, at no cost to them, and an unlimited amount of non-alcoholic beverage.
Cheyenne requires that a minimum of 8 electical, 110V receptacles be made available to their exculsive access.
Cheyenne will furnish all musical eqipment needed to perform, with the exclusion of house speakers.
House speakers will be provided by the owner or management of the establishment and will be of suitable quaity to handle our music.
If suitable accomodations cannot be made, the owner or representative must contact Cheyenne within _48___ hours of the scheduled performance, or a forfeiture of _$400__ will be paid to Cheyenne. This money is due at the time of the signing of this contract and will be returned, if proper advance notice is given by the owner or representative.
The sales an profits of all Cheyenne recordings and memorabilia are the exclusive rights of Cheyenne and will not be infringed in any way.
Owner will provide appropraire security at all times.
Cheyenne agrees to perform for additional time, at the owner's insistance, for the additional price of __$200__ per 1/2 hour interval, or any part thereof.
Payment, in full, will be due by no later than __4/16/04__ .
__(band member signature)____(date)__
__(Owner or rep signature)_ ___(date)__
That's it, it's just that simple. Mind you, the bigger you get, the longer the contract will get... and the more complex.
As you can easily see, the music industry is filled with all sorts of little tricks and practices that are designed specifically to line the pockets of the business execs and not the musician. They want the easiest, fastest money they can make. They truly could care less about the artist themselves. The perfect example of this fact would be the music exec who, after his signed band had went double platinum on their third consecutive album, seriously asked the band members of Pink Floyd, "By the way, which one is Pink?" If you think simply because you are a gifted and highly talented artist that you are going to make it, forget it. Look at the music world around you, there are a ton of artists out there who are just like you.Now, look at all those absolutely horrid artists out there who are signed by major companies making fortunes. Talents helps, but knowing the business, protecting yourself, who you know and your affiliations are is what makes all the difference.
To quote Sonny Bono, when asked what made him think he could sing, "Well, I figured if Bob Dylan could do it, I could do it."
The truth is, neither of those men truly had any sort of a singing voice, but they knew the business, had all the right connections and belonged to all the right affiliations. That, my aspiring friends, is the true key to success in this business. If you doubt me, I guess you have never heard of the Monkeys.
For a little more reference, pay attention to the lessons learned by Nsync and listen to an old Kinks song, "The money go-round."
CD #2 - "I like it... Live!"
I would really love to say that this
cover came from a picture of two
of the band members out for a wild
ride in the vast open spaces of the
West Texas plains. But, in all
reality, we wanted to stay with the
silohette routine and happened to
come across this picture in a CD
label creator program. Untimately,
we decided to use this pic,
over some of the others we had
discussed, simply as a reflection
of the intention of this, our second,
recording effort. The entire CD
was recorded while we were on
tour, at various venues from
South Florida to Southern
California. This scene seemed
to convey the longest stretch of
our tour, thru the West Texas
Plains all the way the Southern
California Desert.
Am I allowed to breath, without a license?
In this business, that is about all you can do, without a license. Believe it or not, in certain circumstances, you need a license to get a license! Do not laugh, I am serious. If your are in a band or going to be in a band, when you actually make money that money is paid to the band, as a whole. Unless you deal only in cash, somehow your are going to have to cash those checks. In order to get a bank account, under the band name, you are going to need a business license. They are easy enough to get. Run a DBA (doing business as) in your local newspaper, get proof of that and run down to your local City Hall, file your business with them and pay a small fee. You now have your business license. Now, file for a Employer Identification Number (EIN) with the IRS (You can actually do that on-line for less than ) and take all that info down to the bank of your choice and get a bank account. Mind you, all member of the band who will have access to that account will also need to sign their signature cards.
In previous articles, I have repeatedly mentioned protecting yourself, your music and even your band name. To do this, you actually need a license for each of those things. Sure, you may be treating your band like a business and have gone out and done the smart thing and actually got a business license. However, that will only partially protect your band as a business entity. Lets say that you write your own music, wouldn't you like to get paid everything you can for your written and performed work? Sure you do. But that means now you have to start up your own publishing company. That requires another business license. What about protecting the actual sound, the rights to your music and even your band name?A huge number of musicians have formed their own production companies and music studios; for instance, the Beatles and Apple Records. I own Sunrise Music. To do that, you need another license. So far, between your main business (the music), your publishing company and your production company, you now have three licenses and you have not made a darned cent, yet!
So, you think you are done with licenses? You hardly begun; now, you get do deal with licenses and royalties for songwriters and performers. Some of these licenses would include:
Mechanical License: A mechanical license gives a record company or other party the right to reproduce your song onto a record. The license issued by a publisher or his/her agent, usually to a record company, grants the record company the right to record and release a specific composition at an agreed-upon fee per unit manufactured and sold. So when a band signs a deal with a major label, the mechanical license allows the major label to record and release the songs. For this right, the record label pays the publisher a mechanical royalty based on each unit manufactured and sold.
The compulsory mechanical license is a creation of the United States Copyright Act. Once a song has been commercially released, anyone may make another recording of that song and sell copies of his/her recorded version as long as they pay the song's copyright owner certain license fees in accordance with the compulsory mechanical license rules. In order for a compulsory mechanical license to be valid, the copyright owner must have authorized the commercial release of the song.
The compulsory mechanical license rate - also referred to as the statutory rate -- is periodically modified.
According to BMI's website, the statutory rates are:
2000 and 2001: 7.55c per song or 1.45c per minute 2002 and 2003: 8c per song or 1.55c per minute 2004 and 2005: 8.5c per song or 1.65c per minute 2006 and later: 9.1c per song or 1.75c per minute
Perfoming Rights Licenses Each time your song is performed in public, you are entitled to receive performance royalty income for that public performance. It doesn't matter whether your song is performed by a live band, or if a recorded version of your song is played. Both can qualify as a public performance. That means your song is performed publicly when a recording of it is broadcast on a radio station, when it is played as part of a television program or when it is played in a nightclub. To comply with copyright law, the radio station, television network, or club must have a performing rights license authorizing the public performance.
With some limited exceptions, performing rights apply only to the song and not to the sound recording. Each time a song is performed publicly, the songwriter - but not the recording artist singing the song or the record company that released the record - is entitled to receive compensation in the form of a performance royalty.
Europe, Canada and much of the rest of the Western world there are two royalties collected and administered by the PROs: one for the songwriter and one for the performer. In the United States there is only one royalty and it goes to the songwriter. For example: Whitney Houston had a big radio hit with "I Will Always Love You." But the song was written by Dolly Parton, which means that Dolly (and her publisher) are entitled to the performance royalties, while Whitney gets nothing.
To eliminate the need to negotiate a separate license with each radio station, night club, and restaurant that wants to perform their song, songwriters or their music publishers affiliate with performing rights societies. ASCAP, BMI and SESAC are the performing rights societies in the United States. These associations specialize in negotiating performing rights licenses and collecting performing rights royalties. The societies often negotiate blanket licenses with radio stations, television networks, and restaurants that allow those organizations to perform any song in the catalog of the performing rights society issuing the blanket license.
Blanket License For an annual fee, radio and television stations, public broadcasters, cable stations, universities, restaurants, programmed music services, etc. can acquire a "blanket license" from a performing rights organization (PRO). This license gives them the right to publicly perform or broadcast every piece of music contained in the PRO's catalog as often as they wish during the term of the license.
Synchronization Right The exclusive right of a copyright owner, granted by the Copyright Act, to authorize the recording of a musical work onto the soundtrack of an audio/visual work. The song is synchronized with images on the screen, hence the name. Synchronization royalties are the amount of money earned by the publisher (and, consequently, divided with the songwriter) for the use of a song for which a synchronization license has been issued, usually for use in TV or motion pictures.
For a really great chart of who pays royalties, who collects royalties, and who gets what percent, go here.
PERFORMANCE RIGHTS LICENSE A license is required for all public performances, not just commercial public performances. There are a few exceptions relating to religious, charitable and certain other public performances, contained in section 110 of the copyright law, but most are not generally applicable. Whether one can avail themselves of one of those exceptions is a question that would best be answered in consultation with an experienced attorney.
PERFORMING RIGHTS ORGANIZATIONS (PROs) The associations or companies that issue performing rights licenses, track public performances, collect performing license revenues and distribute those revenues to song writers and music publishers. The main performing rights societies in the United States are ASCAP, BMI and SESAC, and there are many others worldwide.
REVERSION CLAUSES A negotiable clause in contracts that allow the copyrights to revert to the creator. In the US copyrights revert 35 years after creation (this was at the heart of the Work for Hire controversy). In some European countries copyrights revert if a label fails to keep a record in print.
STATUTORY LICENSES These are direct, standardized licenses like the ones that allow radio stations to play music without first getting specific licenses from the artists. Or like the statutory license that is being offered to webcasters who want to legally broadcast music across the web.
STATUTORY WEBCAST AGREEMENT This is the license you must sign if you want to be a legal webcaster. This means that you don't have to go out and find every artist that you might want to play on your radio station and make them sign a licnese to let you play it. (It's like the other statutory license that radio stations sign) By signing the Agreement you agree to back-pay the statutory rate (which will be determined by a future CARP hearing) from the day that you first signed the agreement. There are many small community based webcasters who signed this agreement years ago and live in fear of the impending bill that will very likely put them out of business.
WORK MADE FOR HIRE As defined in Section 101 of the 1976 Copyright Act, this is a work prepared by an employee within the scope of his/her employment, or a work specially ordered or commissioned for use by another person in accordance with a written document as a contribution to a collective work, motion picture, audio/visual and other certain types of works, the nature of which is specifically defined in Section 101 of the Copyright Act. In the case of a work made for hire the employer is considered the author of the work under the Copyright Act (and unless the parties agree, otherwise owns all the rights in the work). I know that work is work and money is money and if someone is going to offer you a nice paycheck to work for them, you want to do it. But, be careful of what you agree upon.
Let me tell you about two perfect examples that strike very close to home. My sister, Diane, was the woman who was largely responsible for inventing many of the computer and CD components we use today. The CD writers/readers that we all use were developed though much of her work. In return for her efforts, she was given a bi-weekly paycheck and $1 for the rights to each of her patents. Meanwhile, in the years that followed, all the technology that she helped develop, was set over-seas and made several companies billions of dollars, while she collects absolutely nothing for her efforts. The second incident involves a work-for-hire song I had written, several years ago. About 6-7 years ago, I was paid , from a publishing company, for a song I had written. At the time, I was not yet singing professionally and had no clue what the industry was all about. All I knew was that some fool wanted to pay me for something I wrote! About two years after I sold that song, I was headed to the Florida Atlantic University, jamming to the radio, in my car. Shortly after I pulled onto the campus, a song came on the radio. IT WAS MY SONG!!! I parked my car and sat there in shear amazement and excitement that something I wrote was being sung on the radio, by Clay Walker. Guess what, that song managed to hit #1 on the billboard charts and it stayed there for a while too. The album, the song appeared on, went platinum and I cannot begin to count all the times I found it on jukeboxes or being played on the radio.
Licensing? Lets put this in perspective. Had I known about licensing, rights and protecting my work and my efforts, I would have made allot more money than I have. The song I mentioned in the last paragraph - by the way, platinum is a million copies (records, CDs, cassettes) sold. So, if I were to consider the Mechanical rights on that one song alone, even at the 2000 rate of 7.55c per copy, not including however many beyond that first million were sold; I would have made, a minimum of $ 75,500 on one song. Now, if I owned the publishing rights as well (via owning my own publishing company) I would be entitled to an additional 7.1c per copy ($ 71,000), for a grand total of $ 146,500. Hey, I got the $ 500. I wonder here the other $ 146,000 went?
