Music and Copyright: A Hot, Stinking Mess

Aram Sinnreich, Ph.D.Rutgers University School of Communication & Information

This text is freely available under a Creative Commons 3.0 Attribution-NonCommercial-ShareAlike license.

Copyright Beyond PrintMLIS ColloquiumFeb 12, 2014

1. The Basics

Term of copyright

Music Copyright Timeline

1527 1790 1889 1909 1972 1976 1998

Proto-© for English music

publishers

American ©conferred onauthors but

NOT composers

PublicPerformances

Mechanicalreproduction

PhonoCopyright

Synchrights

DMCA

1790:14 years

(+14)

1831:28 years

(+14)

1909:28 years

(+28)

1976:Life + 50

1998:Life + 70

Type of copyright

1831

Copyrightfor US

composers

Music and Copyright in the Recording Era

Artists/Labels“Masters Rights”

Composers &Publishers

“Publishing Rights”

Retail Radio

• Retailers pay wholesale to labels• Labels pay royalties to artists

• Retailers pay wholesale to labels• Labels pay “mechanical” royalties to publishers• Publishers pay composers

• Broadcasters do NOT pay performance royalties on masters• Promotion and “payola”

• Broadcasters pay royalties to PROs (e.g. BMI)• PROs pay publishers and composers

2. Copyright and Corporate Power

Recording Contracts = Awesome

1.Transfer of ownership2. “Controlled composition” clause effective royalties cut by 25%

3. “Net sales” = 85%4. Container charge = 25% deduction5. “New tech” = 20% deduction (e.g. CD, MP3)6.Cross-collateralization7.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 Movies/TV

Video Games Streaming On-Demand

4. Digital Mayhem

Music Has Gone From This…

…To This.

Old Definitions Have No Value

Programmed(Radio)

On-Demand(Retail)

Compulsory ?????????????????? Contractual

Old Products and Formats Have No Value

Old Products and Formats Have No Value

It’s Taken the Industry 15 Years…

Hundreds of Startups Dead40,000 Customers Sued

Bad Laws & Copyfight 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