Music Row Lawyer (C. Stephen Weaver)

SIRIUS/XM PRACTICE MIGHT ELIMINATE ARTIST ROYALTIES

Because I am a member of the Recording Academy I recently received a letter from the President/CEO, Neil Portnow.  The subject of the letter is the Academy’s view of Sirius/XM’s attempts to direct license with independent labels rather than making payments to SoundExchange.  Below is the letter.

Dear Recording Academy Member:

It has come to our attention that satellite broadcaster Sirius/XM is seeking to bypass the standard system of paying royalties.  If they are allowed to do so, it will likely result in substantially reduced payments to artists and producers, a lowering of the value of performance royalties, and unnecessary conflict between artists and their labels.

What’s the issue:

Currently, satellite radio pays sound recording performance royalties to the nonprofit collective SoundExchange, which in turn pays 50% to the artists on the recording and 50% to the copyright owner (usually a record label).  SoundExchange pays the artists the full 50%, even if the artist has unrecouped royalty balances, and also pays producers their share as directed by the artist.  The system has resulted in an important new income stream for creators.

Sirius is now seeking to use the option of direct licensing with certain independent labels instead of using the system created by Congress that ensures fair payment to all parties.  Artists should be concerned about direct licensing; 100% of the royalties would be paid to the record label which in turn may pay artists at a lower rate, subject to recoupment.  And labels should be concerned as well; the lower rate being offered could have the effect of lowering the value of performance royalties to all parties.

What you can do:

If you are an artist signed to the independent label…

You can call your label today and request that it not direct license your recordings.  In the interest of fairness and transparency, your label should continue to license through SoundExchange.

If you own or manage an independent label…

It is in your interest to refrain from direct licensing.  While Sirius may be offering positive terms, the long-term effect of accepting a rate lower than the compulsory rate could be to reduce rates overall in the future.  Creating downward pressure on the value of music may be good for Sirius/XM, but it’s bad for artists and labels.  Please see the following statement from the American Association of Independent Music: http://a2im.org/2011/08/09/statutory-rates-versus-direct-licenses-for-digital-music-streaming/

Thank you for considering this important matter to further our goals of ensuring creators are compensated fairly and the value of music is protected.

Kind regards,

Neil Portnow

President/CEO

The Recording Academy

 

The Closing of Motown – and the Future of Music

            It’s not that I haven’t wanted to blog lately – it’s more that sometimes I just don’t know what to say.  I am a bit overwhelmed when I begin looking for something newsworthy in the music industry to blog about.  I’ve watched the record business crumble around me for the last several years – and it seems to continue to do so.  And I get tired of talking to you about the negatives.  No, I’m not in the record business but I have had more than one record label as a client during my career.  And me as a young man and many of my clients since dreamt of becoming recording artists and having a record deal.  Fewer and fewer will have the opportunity to see that dream come true.

            Most recently the Universal Music Group basically shut down Motown, the legendary R&B label of my teens and 20s and continuing into my adulthood.  Songwriters that inspired me and motivated me to find my place in the music business wrote for that label.  I remember classmates walking the halls of Overton High School in Memphis singing songs by Dianna Ross & The Supremes, The 4 Tops, The Temptations, Stevie Wonder, Marvin Gaye and many, many more.  Or I might hear the “real” music on someone’s transistor radio while they stood at their locker or outside the school before going home.

            Motown’s closing made me sad.  I was moved to the depths of my soul by music when I was just a little fellow.  By the time Elvis had his first hit I already owned a guitar and knew my future would have something to do with music.  The Beatles escalated that passion to a new level.  And many other artists through the years have helped keep the fires burning.  No, it is not over.  I know that.  It is just changing.  I will adapt, as will others.  But sometimes it is difficult and emotional.

            And that is also why it is sometimes it is difficult to know what to blog about.  But I have lived long enough to know that tomorrow is a new day.  And the Phoenix will rise from the ashes – although in a different form that many might not recognize.  But nevertheless sufficient to again inspire young artists and future music entrepreneurs.

 

Copyright © 2011 C. Stephen Weaver

3 Out Of 4 Artists Want A Record Deal

According to a survey conducted by Digital Music News and ReverbNation 3 out of 4 artists would like to be signed to a recording agreement.  In its article revealing the results of the survey, Digital Music News also summarizes the RIAA’s position on this.  The RIAA statement is titled “Why Being Signed to a Music Label Rocks”.

A former senior executive at the Nashville office oone of the major labels recently told me – “Unless you or someone you know is willing to write a check for $750,000 you are not going to be able to compete in the music business with the established labels.”  That plus the experience that a label brings to the table pretty much says it all.

 

Copyright © 2011 C. Stephen Weaver

Illegal File Sharing - A P2P And TorrentFreak Rant!

Ok - I got my dander up this morning! I'm not sure what that means but the grandparents used to say it!  :)  I read a post and comments at TorrentFreak which defends illegal file sharing.

I am stunned that there are so many artist haters out there--I am referring to the comments to the TorentFreak post.  I'm not stunned that most haven't a clue as to what they are talking about.  This is why I can usually ignore the childish rants of the criminals who post in support of music and film theft.  A lot of the commenters are blaming the U.S. - what a joke.  Most don't even know that most of the major free countries of the world have been ahead of the U.S. in the protection of intellectual property and protecting the culture and art of their respective nations.  The U.S. had to change the term of protection to life plus 70 in order to be a part of the main copyright conventions of the world.  Congress doesn't have to encourage creation of arts and inventions by providing copyright and patent protection.  The constitution merely gives them the authority to do so. And so they do.

I will give them this one - the theives have put a lot of artists out of business so they can pat themselves on the back for that.  This is the human factor.  I know this because I talk to the artists and represent them.  I now see songwriters with track records of several number one hits who can no longer get a publisher to subsidize them through the tough times.  And my younger clients who hope to be able to follow their dreams never get the chance because the record labels sign so few compared to past years.  Remember - it takes over $1 million to launch a new artist in the country genre and certainly more in mainstream pop - and most of the time even that kind of exposure does not mean success.  The math is simple - less dollars at the labels = less artist signings.

These losses are not all caused by theft.  Some are caused by the legal use of technology - the ability to download single tracks rather than purchase albums.  This is legitimate -- a change in the marketplace which requires adaptation by those whose primary purpose is to disseminate the product.

There has always been and will always be crime.  It is just the nature of some members of humanity.  That's why we have laws and law enforcement.  Rest assured that the elected leaders of our country will not take actions which will destroy our culture and artistic community.  And the business structure around music and film will make adjustments and adapt to the world that we live in today . . . . and tomorrow.

Today's good news:  According to research conducted by the NPD Group, P2P filesharing is on the decline.  Check out the story at Music Row.

 

Copyright © 2011 C. Stephen Weaver

Obama Administration Supports Creators and Content Owners

    Last year the Obama administration sent a White Paper to Congress which, among other things, suggested that legislation be enacted to emphasize that illegal file sharing is a felony in certain circumstances.  Apparently the intention is to either create new legislation or somehow encourage enforcement of the criminal provisions of the existing Copyright Act.  Rarely is there criminal prosecution under the copyright act.  Normally only in cases of mass organized piracy and bootlegging.  Moses Avalon makes the comment in his latest blog that “it seems like the Fed is ready to level the playing field between America’s newest major industry—Internet technology--and one of its oldest—intellectual property, as Obama sets to put an end to piracy and torrent “streaming” of music.”

    Moses doesn’t mention that in the same White Paper the Obama Administration also endorses the Performance Rights Act which would provide a right of public performance for Sound Recording copyrights.  This is the right (non-existent in the U.S.) which would require that radio stations and others pay a royalty to the creators and owners of sound recordings in addition to their current payments to the creators of musical compositions.  Whether or not this recommendation to Congress will have any effect we do not know – but as Kevin Goldberg states in his law firm's blog, “as endorsements go, this is a pretty big one.”

    Any thoughts about this dear readers?

 

 © C. Stephen Weaver 2011

 

Who Owns The Performances On Your Recordings? Part 2

            Continuing with last weeks subject matter, why is it when you hire musicians, producers, vocalists and others that the resulting Master tracks are not “Works Made For Hire”.  If the recording were works for hire then you as the person who paid for their creation might be considered the employer and thus the “author” and owner of the sound recording copyrights.

            The idea of work for hire is an exception to the general rule that the creator of a work is the “author” and thus is automatically the owner of the copyright.  There are two kinds of works for hire.  First, a work can be considered a work for hire if it is created by an employee within the scope of his or her regular employment.  If you were to hire a vocalist to sing jingles for you full time and told the person when and where to work, then the jingle recordings might indeed be works for hire.  But that is not the situation in most recording sessions that I know about.  The artist or record label hires the musicians to come to the studio and record for that one album or for a certain number of songs on the album.  Recording that specific album is not their full time job.  They get paid for the project and not as a regular full time employee.  They are independent contractors. 

            The second type of work for hire is the situation where one hires independent contractors which is the example given for most recording sessions.  In that situation every one making a creative contribution to the recording will likely be a creator of it and thus an owner of copyright along with the other musicians, vocalists, etc.  However, their work can be considered a work for hire only if two conditions are met:  (1)  the work must be intended to fit into one of nine categories listed in the copyright act AND (2) there must be a signed contract that states that the work when finished will be considered a work for hire.  That is why I stated in last week's post that without the written agreement most songwriters and artists will not own the copyright in the sound recordings they just finished recording and paying for.  Does an EP or an Album fit into one of the required nine categories?  Arguably “yes” – in category number 1 below:

1. A contribution to a collective work
2. A part of a motion picture or other audiovisual work or sound recording
3. A translation
4. A supplementary work
5. A compilation
6. An instructional text
7. A test
8. The answer material for a test
9. An atlas

            The lesson:  when you get ready to go to the studio be sure you have anyone making a creative contribution to the sessions sign a work-for-hire agreement that addresses all the requirements of the Copyright Act. 

© C. Stephen Weaver 2011

 

What Is It That A&R Does?

             I hope my friends in A&R do not take offense.  I'm sure they wonder what it is that I do.  Nevertheless, I have heard many artist managers ask (rhetorically and cynically) “What do the A&R people do these days?”  In my observation they still have jobs to do – but maybe it just isn’t what it used to be.  It used to be that when I was younger and playing in bands that A&R were thought to be the people who might stop in at one of our gigs and offer us a big record deal.  As time went on and I became less naive, I learned that A&R might indeed stop by the gig – but only after hearing about the band in advance and most likely listening to a demo (or if a solo artist with connections, acoustically in their offices).  It used to be that the A&R person looked for the raw talent, signed the artist and found the songs for them to record.  In my experience today, while finding songs is still a function of A&R, an artist who doesn’t come to the table with a few hit songs written by them or someone closely allied with the artist, their chance of getting signed is even less than slim (slim being the norm).  And of course A&R used to help "develop" the artist – perhaps together with an ancient label department known as “Artist Development”.  You might want to read Ritch Esra’s guest post on this subject, if only to lend some credibility to my observations.

           While I have pretty much gotten out of the record deal shopping business, I still sometimes give advice on the process.  And today I tell the artist that to improve their chances they should get out there and do it!  By that I mean perform, record your own EP or Albums, sell them, get a fan club mailing list.  In short, get in the music business – and then go to the label not only with a demo and a pretty picture, but also with facts and SoundScan data in hand.  Too many artists come to me and hope that I will do it all for them.  It doesn’t work that way – at least not most of the time these days.  Artists:  Go to work and be in the music business – be a working artist!  Don’t wait to be discovered by someone on the A&R Staff.  Chances are it won’t happen—at least until you develop the entire package you have to offer.

 

Copyright 2011 C. Stephen Weaver

 

 

Majors Labels Are Still Best Choice for Super Stardom

            Paul Resnikov penned a recent post regarding what I often tell my clients.  And that is if making the biggest national and/or worldwide impact as a new artist out of the gate is your objective, your best chance is still with a major label.  They have the money, the staff, the know-how and the connections that most indie artists do not.

            True, the majors have a bad rap – mostly for the behavior of their 1950’s predecessors and for their attempts to stop the theft of their multi-million dollar assets by illegal file sharing.  Majors are far from perfect.  But I’m not talking about perfection.  I’m talking about increasing your odds of becoming a huge success in the shortest period of time.

            The indie life offers many more options than ever before.  I also tell my clients if they like running their own show they can certainly make a good living as an indie and can enjoy artistic freedom.  But those discussions have nothing to do with the odds of achieving super star status.  Sure an indie can do that – but what are the odds compared to the latest artist being financed, groomed and backed by a major?  

            Speaking of odds, what are the chances of even being signed by a Major?  Slimmer and slimmer everyday.  Becoming an indie artist for most is the only option.  For most of todays’ new artists who want to be with a major label, the best option is probably not to sit around waiting for an offer from one of the big companies.  The best option is to create your own sales history and fan base while also pursuing the major deal.

In my own career as an entertainment attorney I have chosen the life of an “indie”.  I am a solo practitioner and have been for all but two years of my career.  I love it.  What I have given up is the guaranteed income offered by large law firms and to some degree more “fame”.  My choice and I do not regret it.

            As a reminder, I define “Major” as a label with major label distribution, its own radio promotion staff (at a minimum) and the ability to finance a national launch of their artists.  Here is Paul’s original article “If Major Labels Are Bleeding So Badly, Why Are They Still Creating the Biggest Artists?”

 

Copyright © 2011 C. Stephen Weaver

Is Taylor Swift an "Indie"?

            Paul Resinikoff notes the excitement of the industry over the fact that 273 of last weeks Grammy nominations were “indies”.  Among that list are Taylor Swift.  Resnikov argues that Swift is not an “indie” because of her label's connections with Universal.  You can read the full article here.  I agree that she is not an Indie artist but not for the same reasons as Resinikoff.

            I would distinguish between an Indie Artist and an Indie Label. The people I deal with in the industry consider the distinguishing characteristic between an Indie Label and a Major Label to be whether the label handles the distribution function itself and and whether it has in-house promotion.  Perhaps there are other factors but those are the two that I primarily look at when the issue comes up in a contract negotiation.  So just because a label is distributed by Uni, Sony Red, etc. does not mean that the label is suddenly a major rather than an indie. On the other hand (and this might not at all be the industry consensus), my perception of an Indie Artist is one who is not signed to a 3rd party label. The artist is her own business, including owning her own label.  That is not to say the artist isn't outsourcing some functions by making distribution deals, hiring independent promotion, etc.

             That's my take on this.  Taylor Swift? She is an artist who is on an Indie Label--Nashville's Big Machine Records.  She is not an Indie Artist in my opinion.

 

Copyright © 2010 C. Stephen Weaver

Good 360 Record Deal Post at NPR

Thanks to Ed Pierson for the link to this post at NPR Music.  Because my blog posts about 360 record deals have generated the most visits and emails to me, I am sharing this with my readers.  NPR Music 360 Record Deal Blog Post.

 

 

 

Copyright © 2010 C. Stephen Weaver