Copyright law governs how the bulk of music industry revenue is distributed. These laws determine how money flows from sellers, distributors or users of songs and recordings to creators and rights holders. But copyright law has been slow to catch up with the rapidly changing digital music industry, especially digital streaming and radio, and has long been in need of reform.
Clearly, those working in the music business need to fully understand music copyright law. The Frost School of Music's online Master of Music in Music Business and Entertainment Industries (MBEI) program covers copyright law, publishing and licensing in depth. An extremely important part of this study is keeping up to date on current changes in copyright law. And changes are afoot as Congress is currently (and finally) working on music copyright reform.
What Are the Basics of U.S. Music Copyright Law?
At the most basic level, music copyright law protects and supports (ideally) those who create music, own the rights to it, record it, and own those recordings.
A song is essentially considered copyrighted when it is written and "fixed" in some documentable form like sheet music or recording. Although it is not necessary, the song can be registered with the copyright office (which can be helpful in future legal proceedings).
Songwriters own the copyright of their songs when they are written, though at times assign copyright of that song to their publisher under contract. Songwriters and publishers (which can be the same thing if that songwriter self-publishes their music) issue licenses for the use of their copyrighted music. And they are due royalties when that music is used according to copyright law royalty rates as well as negotiated licensing fees for certain uses.
Specific recordings (often called the master) of a song are also copyrighted. The performing artist(s) and the owner of the recording are both due royalties for the use of that recording. In addition, these parties have to obtain licenses from songwriters/publishers for the use of their songs, even if the songwriter and recording artist are the same person(s).
What Kinds of Royalties Are There?
These royalties come in many forms. These are the main three:
- Public performance royalties (when the song is played in public such as on the radio, TV, movies, in bars, etc.).
- Mechanical royalties (when songs are downloaded, streamed in an on-demand format, sold in physical format, etc.)
- Synchronization royalties (when songs are used with visuals like TV, commercials, films, etc.).
Frost's MBEI offers music professionals further in-depth study into music copyright law.
What Would Current Copyright Law Reform Change?
Currently, there is bipartisan legislation in congress which will most likely include three acts: The Music Modernization Act (MMA), the CLASSICS (Compensating Legacy Artists for their Songs, Service, & Important Contributions to Society) Act, and the Allocation for Music Producers (AMP) Act.
The MMA mainly addresses the proliferation of streaming services and how they pay the rights owners. There has been vehement disagreement between streaming companies and songwriters and publishers on royalty rates. The rights owners are paid a paltry sum for the streaming of their songs -- a small fraction of a penny per stream. And streaming services have often circumvented purchasing a license from rights owners. This has led to huge lawsuits and overall industry chaos.
Impressively, all negotiating parties have come to agreement in supporting the bill through including provisions that help both songwriters/publishers and streaming companies. An organization made up of publishers will be established (and paid for by streaming companies) that will control publishing licensing to streaming services en masse, giving rights owners much more control over the situation than previous legislation allowed. In return, streaming services will be able to purchase blanket-use licenses, which will protect them from the present onslaught of lawsuits.
The CLASSICS Act requires royalties be paid to artists and labels by digital radio for music from before 1972 (something avoided by loopholes in previous legislation). And the AMP Act puts into law the fairly common practice of allocating a percentage of digital royalties to producers and other creative participants involved in making a record.
These acts are bound to change somewhat as they make their way through the legislature. And further reform will still be needed to ensure music industry revenue is distributed fairly. But just the fact that all (or at least most) sides of the music industry have come to agreement is a big step forward. Music business professionals should pay close attention to how music copyright reform develops, as it will directly affect every aspect of the industry.
Sources:Bloomberg: Goodlatte Preparing to Unveil Compromise Bill on Music Copyrights
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