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PracticeMusic LawBuche & Associates, P.C. is involved in music law because we love music. We handle music law and represent the interests of record and publishing companies, managers, producers and musicians. We represent clients in negotiating music deals and in litigation concerning music related business. Music law is a highly specialized field that couples contract, copyright and other intellectual property laws. The music business is extremely competitive, riddled with minefields for the unsuspecting, and constantly evolving with new technologies. Buche & Associates, P.C. is familiar with this law and can help you negotiate the business complexities, minefields, and many nuances of music contracts. Where legislatures may not have caught up with the pace of the music business, Buche & Associates, P.C. is committed to using creative legal solutions to help your creative business stay ahead of the changes. The following introduction is provided for those who may be new to the Business. CopyrightsThe foundation of music law rests in the protections afforded to artists under the copyright laws. Copyrights protect artistic expression and exist from the moment an author reduces the expression to a tangible medium, for example, when a musician first records a string of notes. The musician owns a copyright from the point of creation. It is not necessary to file a copyright registration, although to do so is highly beneficial from the standpoint of proving copyright ownership, collecting damages from infringers, and for collecting royalties. A songwriter owns a music copyright. A copyright is truly a collection of separate rights to:
These are the most important aspects of copyright for purposes of music law, although other rights exist. A record company will typically own another type of copyright-a sound recording copyright- which is separate from the music copyright and discussed in this article. A music copyright created under the 1976 Copyright Act (written after January 1, 1978) lasts for 70 years extending beyond the life of the author, therefore, the rights represented by copyright are extremely valuable to Artists, their heirs, record companies and investors. Ask rock legend David Bowie, who in 1997 embraced trends toward securitizing intellectual property rights, and netted roughly $55 Million by selling "Bowie Bonds" to investors for an average 10-year life (paying 7-8%), and for which revenue is generated by publishing fees and recording sales. RoyaltiesMusic royalties are the proceeds of licensing song copyrights. Royalties are paid in exchange for the privilege of using another person's copyright. There are many types of royalties in music law, depending on which specific copyright is being used. Some typical royalties that are dealt with in the music business include performance royalties, song royalties, mechanical royalties, and synchronization royalties. Performance Royalties Performance royalties are owed when a person "performs" a copyrighted song. In music law, such performances can include a stage performance, but can also extend to broadcasts of a songwriter's song. For instance, a restaurant that broadcasts a radio station that happens to plays an Artists song over a very bad stereo system still "performs" a work. BMI®, ASCAP® and SESAC® (www.BMI.com, www.ascap.com, www.sesac.com) are performer's rights organizations-sometimes known as "copyright police"-who will be the first to inform the restaurant that it must pay performance royalties for use of the songs, or face the music via federal lawsuits. Most musicians should join such an organization, which will collect and pay royalties to the songwriters. Mechanical Royalties Mechanical royalties are what a recording company pays to a music publisher under a mechanical license in exchange for the right to make and distribute records featuring a particular song. Mechanical licenses for most music publishers can be obtained through the Harry Fox Agency (www.harryfox.com), which is an agency formed to license, collect, and distribute royalties on behalf of U.S. publishers that own and/or control the rights to musical compositions. If you want to record and distribute songs written by others, you need to get mechanical licenses. The Congress sets a statutory rate for mechanical royalty rates, which for 2005 are 8.5¢ per song for each CD or tape made and distributed, or 1.65¢ for each minute of playing time, whichever is greater. The rate after 2005 is 9.1¢ per song or 1.75¢ per minute. Despite statutory rates, it is commonplace for record companies contract to pay 75% of the statutory rate in most contracts. Songwriter Royalties A songwriter earns, or at least is supposed to earn, royalties every time a reproduction of the artist's song is sold. This could be a compact disc sold at a music store or a song downloaded from the Internet, the latter of which is becoming increasingly more popular with downloadable MP3 files and portable, IPOD® styled players. The widespread free distribution of Metallica's® songs on Napster® is what spawned litigation to stop the understandably popular music distributor. Aside from recent controversies, the royalty percentage a songwriter earns will vary depending on the songwriter's popularity, the medium licensed, and contract negotiations setting the royalty, although a typical songwriter royalty on an music album would typically be in the range of 8-25% of a suggested retail list price. It is important not to neglect royalties for new music mediums in calculating royalties. It is also important to understand that expenses established by the recording company contract offset amounts actually paid to an Artist. Synchronization Rights When film legend Quentin Tarantino merges "Woo Hoo" by the 5.6.7.8's with his movie Kill Bill 1, "synch" rights are involved. A songwriter is synchronizing his or her music with another multi-media project. The perfect song at the intro of a movie or television commercial can make or break a product. The Cadillac® division of General Motors® obviously appreciated the value of the synch rights when they rolled out their new Caddie on nationwide commercials to Led Zeppelin's famous tune "Rock N' Roll." How much is Led Zeppelin's song worth? What is the value of changing a products image? It is not uncommon in a publishing deal for the publisher to claim as much as 50% interest in synch rights to an Artist's song. The value of a particular or song or synch right is another question entirely. This is why you want Buche & Associates, P.C. on your side when you negotiate such a deal. Sound Recordings In addition to considering mechanical royalties, any person who wants to record and distribute the compositions of another must consider the importance of obtaining the "master use rights." These rights relate to the "sound recording" or SR copyright, which is separate and apart from the copyright to a song (words and music). A sound recording is the copyright to the production of the master recording itself (CD, tapes, etc.) Instead of the music publisher, record labels typically own the rights to the sound recordings. Any reproduction of a previously recorded work will require a license of the master. Common Music ContractsRecording Contracts The recording contract you land will frankly depend on how highly people regard your work. If you are Sting®, chances are that you can negotiate a fairly favorable deal for yourself with basically anyone you want. On the other hand, if your most recent gig was staged in your garage or at a family barbecue, Columbia® may not beating down your door for a record deal. Nevertheless, it is important for new, and newly discovered artists to understand the terms of a record deal because the consequences are long term. Signing a big label can have undeniable benefits, principally in terms of national exposure for musicians, but the complexities of a record contract, royalty calculations and expenses can rapidly erode any revenues earned by a musician. Typical royalties could be anywhere from 8-25% of suggested retail price of a recording. However, any royalties can be rapidly eroded through royalty calculations and expenses. On major label deals, a newly signed musician should fully expect to pay for all limos, resort hotels and associated bling-bling from artist royalty deductions. Bad record contracts can also have the unfortunate effect of making a band hard to market to subsequent record companies. Buche & Associates, P.C. can help to advise you of your rights and contractual obligations on a record deal. Publishing & Songwriter Contracts Songwriters enter contracts with music publishers who help the Artist generate income by promoting songs to the general public, record labels, and through multi-media. Music publishers make money by licensing the songwriter's songs to interested parties and then it splits the proceeds with the songwriter. Publishing or songwriter contracts are used to transfer or assign the songwriter' copyrights to the publishers who become the owners of a composition. In exchange for the transfer of ownership, the Artist gets paid from the publisher as money is collected. A common songwriter contract would entitle the Publisher to 50% of mechanical royalty income, 50% of synchronization royalties, and the "publisher's share" of performance royalty income. Also common are co-publishing agreements, where the Artist will get closer to 75% of mechanical, synch and 50% of the publisher's share of performance royalties. Artists with a great deal of clout may be able to arrange for "Administration Agreements" where a publisher manages an Artist's portfolio and retains a percentage of revenues collected. Producer Contracts A producer is the person or business that orchestrates the actual recording, editing and coordinating of various elements of a song or album into a high quality master recording. Many record companies have in house production facilities, but artists may often seek out a particular producer with well-known skills or reputation in a particular field or genre of music. Producers may work for a percentage of record sales or for a specified fee for the particular project. Producer contracts can vary quite a bit and Buche & Associates, P.C. can help you to negotiate a producer contract that fits your needs. Management Contracts Good musicians are not always good business managers, or publicists. This is why a good manager can often make the difference in whether an artist or band is successful. The Beatles owe much of their early success to manager Brian Epstein, who helped the band to dress and act like the early Beatles (requiring the suits), and who also helped them sign a first record deal with George Martin on EMI's Parlophone label in June 1962. A good manager should be proactive in securing opportunities for the musician(s) and managing his or her business. In addition to helping a musician land gigs, record deals and publicity, a good manager will also know how to select and assemble teams necessary to make a musician a success, for example, tour support, contractors, attorneys, accountants, etc. A manager will frequently work for a percentage, with different arrangements made for expenses. Buche & Associates, P.C. can make sure that your management contract facilitates proper management. Music Forms Beware of "form" music contracts. While there are many organizations that market music business forms, they are completely useless without a comprehensive understanding of copyright law and the music business. In the music business, you need a music business advocate. Buche & Associates, P.C. will take the time to understand your business, your music, or your art and provide you with the representation that you need. Buche & Associates, P.C. is based in San Diego, California and represents clients primarily in the states of California and Texas. ContactLa Jolla Office, California
875 Prospect, Suite 305
Tel: 858-459-9111 Santa Monica Office , California
2001 Wilshire Blvd, Suite 210 Tel: 310-593-4193 Houston Office, Texas
6363 Woodway, Suite 820
Tel: 713-589-2214 |