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Re: Music Business Law


Home Forums The Hangout Music Business Law Re: Music Business Law

#29973
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graphite412
Participant

9-24-09

Who is Licensed? Who pays for royalties.

-Restaurants
-Radio stations
-Broadcasting networks
-Hotels
-Clubs
-Arenas
-Colleges
-Cable TV
-Etc.
-Churches are exempt

How are they licensed? The PRO’s look for prospective licensees.
A prospective licensee is contacted either by mail or by a field representative (in locations that have field representatives, small towns usually don’t have a representative but larger cities will have them). If they are not licensed the PROs bring lawsuits against the infringing establishment. The PRO’s usually win their court battles

How long do licenses last?

Clubs, bars, and other live music facilities are usually asked to sign a 1-year blanket license.
Hotel and Motel usually have a blanket license for five years.

How is the rate set?

Seating capacity, whether admission is charged, weekly budget for live music, number of hours of musical entertainment, may also involve gross income of the facility.

Who is not licensed?

Places that usually do not house musical entertainment such as arenas and stadiums. They instead the performing rights organization contact the producer(s) of specific events.
Artist and their managers are not expected to pay royalties.

Royalty Distribution

TV, Radio, Broadcast make up about 85%
about 15% from non-broadcast sources
Songs with more than one write or publisher can become difficult especially if different artist/writers are from different PRO’s
It is possible for multiple artist/writer songs, that each artist or writer could be paid a different wage.

Foreign Collections

Because the US is a part of the Berne Convention we are treated as locals of the nations our pieces are performed in
Foreign subpublishers generally collect foreign royalties.
For those who can’t afford subpublishers, ASCAP, BMI, SESAC do collect money for a fee of 3-10%.

ASCAP

Established in 1914. had a hard time starting but started doing better after WWII. 20-25% of income comes from foreign licensing organizations. 50% from TV station. 25% from radio. Annual fees for most broadcasting companies are based on a percentage of their gross income.
Membership can be attained today with minimum standard of one song published and distributed or commercially recorded or performed in media licensed by ASCAP.
Their board is made up of 12 writers and 12 publishers that are elected.
Operates under a consent degree of the US Department of Justice, this prevents a monopoly.
They give out awards and sometimes commission people to write music, offer workshops clinics on various topics.
Performance Weighting: depends on the place where the work is performed, wight of TV or Radio station, time of the day the performance occurs.

BMI

Owned by stockholders. Was originally started by broadcasters who were unhappy with the statuesque. Most concerned with popular music in the early stages of the group. There are affiliates instead of members. Affiliates must have composed at least one song. They prefer to negotiate performance royalty rates with established trade organizations. Uses statistical sampling and census to figure out what pieces are being performed. Has a group for classical compositions. Gives bonus payments.

SESAC

Smallest PRO in the US. This group is the most technical of all the PROs. They use digital watermarking to ensure accurate tracking of performances. Use trade magazines like Billboard to determine royalties. A song that does not chart will likely get no payment. Gives flat fee licensing, uses fixed fees for performance writes.

Mechanical Licenses- Copyright law sets the compulsory mechanical license but many recording companies and publishers negotiate mechanical licenses instead. These negotiated licenses are usually better for recording companies. 1978 the rate was changed. The Harry Fox Agency usually collects the mechanical license royalties. The Harry Fox Agency cal also deal with negotiated mechanical licenses. Other organizations can collect mechanical licenses but these are usually smaller than the Harry Fox Agency.

Synchronization Licenses

The video and the audio are two different performance rights.
Usually the filmmaker gets the license to the audio.

TV and Movie Rights

- TV is covered by performing rights organizations in the US. Performance rights are typically handled through those organizations for TV movies. Cable TV is required to operate under a compulsory mechanical license given by the US Copyright Office.