Music Content IP: The Building Blocks of the Music Business Donald R. Simon, J.D./LL.M. Kaplan University

Outcomes What can a record company control? What can a record company control? How divisions of a record company influence. How divisions of a record company influence. The upsides of record labels (for artists). The upsides of record labels (for artists).

The Music Business

Publishing Companies Publishing involves:Publishing involves: Promoting and licensing the performance and publication of musical compositions;Promoting and licensing the performance and publication of musical compositions; Collecting income arising from such promotion and licensing;Collecting income arising from such promotion and licensing; Paying songwriters their share of the collected income (typically 50% of collected sums);Paying songwriters their share of the collected income (typically 50% of collected sums);

Publishing Companies Publishing involves:Publishing involves: Acquisition of musical compositions; andAcquisition of musical compositions; and Administering legal protection of the composition.Administering legal protection of the composition.

Publishing Companies Songwriter Song Publisher RecordsPrintTV/Films 1.Songwriter composes song. 2.Assigns the song over to a publishing company. 3.Publisher licenses song and keeps 50% of the proceeds.

Publishing Companies Publishing Deals:Publishing Deals: Exclusive Term Agreement:Exclusive Term Agreement: Songwriter can be essentially a “staff writer.”Songwriter can be essentially a “staff writer.” All songs written become the publisher’s property (work-for-hire).All songs written become the publisher’s property (work-for-hire).

Publishing Companies Publishing Deals:Publishing Deals: Co-Publishing Agreement:Co-Publishing Agreement: Songwriter keeps the writer’s share and a portion of the publisher’s share (up to 50%), too!Songwriter keeps the writer’s share and a portion of the publisher’s share (up to 50%), too! Songwriter and publisher share copyright ownership.Songwriter and publisher share copyright ownership.

Publishing Companies Publishing Deals:Publishing Deals: Administration Agreement:Administration Agreement: Songwriter retains both shares.Songwriter retains both shares. Songwriter retains full CR ownership.Songwriter retains full CR ownership. Publisher charges 10-25% fee, plus expenses.Publisher charges 10-25% fee, plus expenses.

Publishing Companies Sources of Publishing Revenue:Sources of Publishing Revenue: Major:Major: Sound recordings;Sound recordings; Digital download (iTunes, etc.);Digital download (iTunes, etc.); Public performances;Public performances; Motion pictures;Motion pictures; DVD and videocassettes;DVD and videocassettes; TV programs; andTV programs; and Advertising.Advertising.

Publishing Companies Sources of Publishing Revenue:Sources of Publishing Revenue: Secondary:Secondary: Printed sheet music;Printed sheet music; Radio programs;Radio programs; Music boxes;Music boxes; Juke boxes; andJuke boxes; and Dramatic performances.Dramatic performances.

Publishing Companies Sources of Publishing Revenue:Sources of Publishing Revenue: Emerging:Emerging: Computer games/software;Computer games/software; Sampling; andSampling; and Ringtones.Ringtones.

Publishing Companies Mechanical publishing:Mechanical publishing: The licensing of copyrighted songs for use on CDs, records, tapes, and certain digital configurations.The licensing of copyrighted songs for use on CDs, records, tapes, and certain digital configurations. Compulsory licenses.Compulsory licenses. Available through the Harry Fox Agency.Available through the Harry Fox Agency.

Publishing Companies Mechanical publishing:Mechanical publishing: Fees:Fees: $.091 for songs 5 mins. or less; and$.091 for songs 5 mins. or less; and $.0175 per minute or fraction thereof for songs over 5 minutes. For example:$.0175 per minute or fraction thereof for songs over 5 minutes. For example: 5:01 to 6:00 = $.105 (6mins. X $.0175 = $.105)5:01 to 6:00 = $.105 (6mins. X $.0175 = $.105) 6:01 to 7:00 = $.1225 (7mins. x $.0175 = $.1225)6:01 to 7:00 = $.1225 (7mins. x $.0175 = $.1225) 7:01 to 8:00 = $.14 (8mins. x $.0175 = $.14)7:01 to 8:00 = $.14 (8mins. x $.0175 = $.14) Rate for ringtones is $.24 per copy.Rate for ringtones is $.24 per copy.

Publishing Companies Public performance publishing:Public performance publishing: Right to play (or perform) songs that the public will hear.Right to play (or perform) songs that the public will hear. Difficult for radio and TV stations, restaurants, and clubs playing 100s of songs a day to get rights.Difficult for radio and TV stations, restaurants, and clubs playing 100s of songs a day to get rights. Difficult to grant rights to all radio and TV stations, clubs, and restaurants.Difficult to grant rights to all radio and TV stations, clubs, and restaurants. ASCAP, BMI, SESAC, and others.ASCAP, BMI, SESAC, and others.

Publishing Companies Public performance publishing:Public performance publishing: Performing Rights Societies grant blanket licenses to radio and TV stations, restaurants, and clubs to play any song from their repertoire.Performing Rights Societies grant blanket licenses to radio and TV stations, restaurants, and clubs to play any song from their repertoire. Collect and distribute royalties to songwriters and publishing companies.Collect and distribute royalties to songwriters and publishing companies.

Publishing Companies Synchronization publishing:Synchronization publishing: Good only for theatrical distribution and broadcasting.Good only for theatrical distribution and broadcasting. Distribution of copies on DVDs, videocassettes, and the like for home use, requires an additional license called a videogram license.Distribution of copies on DVDs, videocassettes, and the like for home use, requires an additional license called a videogram license.

Publishing Companies Synchronization publishing:Synchronization publishing: Fees for non-exclusive, perpetual use in a major motion picture can range from $50K to $250K or more for opening credits to $15K or less for background music.Fees for non-exclusive, perpetual use in a major motion picture can range from $50K to $250K or more for opening credits to $15K or less for background music.

Publishing Companies Synchronization publishing:Synchronization publishing: Fees for non-exclusive, perpetual use in a TV program can range from a few $Ks to 10s of $Ks.Fees for non-exclusive, perpetual use in a TV program can range from a few $Ks to 10s of $Ks. Fees for a 1-year national ad campaign typically range from $50K to $200K, or more depending on the popularity of the song.Fees for a 1-year national ad campaign typically range from $50K to $200K, or more depending on the popularity of the song.

Assignments By the end of Unit 3:By the end of Unit 3: Potential revenue streams DTPotential revenue streams DT Future of publishing licenses DTFuture of publishing licenses DT Read Chap. 16 (Passman).Read Chap. 16 (Passman). Read Chaps. 1 and 2 (Brabec)Read Chaps. 1 and 2 (Brabec) Publisher revenues assignmentPublisher revenues assignment

Assignments Potential Revenue Streams DT: Potential Revenue Streams DT: The readings this week detail a number of potential revenue streams for the songwriter. The readings this week detail a number of potential revenue streams for the songwriter. Combined with last week’s discussion of record labels, you can see that there are a number of ways music ownership can be profitable. Combined with last week’s discussion of record labels, you can see that there are a number of ways music ownership can be profitable.

Assignments Potential Revenue Streams DT: Potential Revenue Streams DT: Many of these developments have been in the last years. Many of these developments have been in the last years. For more information about what areas make “a lot” of money refer to your readings in Music, Money and Success this week, or feel free to do your own additional research. For more information about what areas make “a lot” of money refer to your readings in Music, Money and Success this week, or feel free to do your own additional research.

Assignments Future of Publishing Licenses DT: Future of Publishing Licenses DT: Based on your reading in Passman, which type of publishing license will gain more importance in the next 5 years in your opinion and why? Based on your reading in Passman, which type of publishing license will gain more importance in the next 5 years in your opinion and why?

Assignments Publisher revenues: Publisher revenues: Remember the band you created in Unit 2? Remember the band you created in Unit 2? Assume that before you signed the deal from the Unit 2 Assignment, you also signed with a publisher. Assume that before you signed the deal from the Unit 2 Assignment, you also signed with a publisher.

Assignments Publisher revenues: Publisher revenues: Think about the period of the band’s career, what type of music they create, where they want to go, and how they want to earn their living with music. Think about the period of the band’s career, what type of music they create, where they want to go, and how they want to earn their living with music.

Assignments Publisher revenues: Publisher revenues: Your assignment is to create a list of that band’s key sources of publishing revenue, and where they might plan to lose money. Your assignment is to create a list of that band’s key sources of publishing revenue, and where they might plan to lose money. Make a list of the publisher revenues ordering from most important to least important, and explain why you chose the order. Make a list of the publisher revenues ordering from most important to least important, and explain why you chose the order.

Assignments Publisher revenues: Publisher revenues: Minimum of 1 page. Minimum of 1 page. Viewpoint and purpose should be clearly established and sustained. Viewpoint and purpose should be clearly established and sustained. Assignment should have correct grammar, punctuation, etc. Assignment should have correct grammar, punctuation, etc. Writing should be well ordered, logical and unified, as well as original. Writing should be well ordered, logical and unified, as well as original.

Assignments Publisher revenues: Publisher revenues: Your work should display superior content, organization, style, and mechanics. Your work should display superior content, organization, style, and mechanics. Appropriate citation style should be followed. Appropriate citation style should be followed. Submit your outline to the Dropbox by the end of Unit 3. Submit your outline to the Dropbox by the end of Unit 3.

Outcomes What can a record company control? What can a record company control? How divisions of a record company influence. How divisions of a record company influence. The upsides of record labels (for artists). The upsides of record labels (for artists).

Outcomes Questions?

Have a Great Week!