As part of a planned series of West Coast panel discussions designed to address various aspects of the business, the Association of Music Producers (AMP) presented a session last week (3/9) on music copyrights, royalties and licensing. Held at Todd-AO West, Santa Monica, the event–billed as “Building A Successful Music Publishing Business”–featured panelists Dain Blair, president of Groove Addicts, Los Angeles and Chicago; Steven Winogradsky, Esq., president of The Winogradsky Company, North Hollywood, Calif.; and Ivy Tombak, president of Litchfield Entertainment Company, West Hollywood, Calif. Donald A. Jasko, CEO of Digital Economics, Santa Monica, moderated the event.
COPYRIGHT PRIMER
Attorney Winogradsky began the evening with an explanation of basic copyright principles. From the moment music is created in a tangible medium such as on paper or in a computer, he said, it automatically gains copyright protection. An independent songwriter writing for himself would own the copyright, but if a production company has hired the writer to create music for a specific production, it would fall into the category of “work made for hire.”
Work for hire means that the production company owns the copyright, or the client owns it if an agency hired the songwriter, Winogradsky explained. Ownership allows the production company to use the work in almost any way it sees fit, he continued, including licensing it and allowing another writer to change the music. But it usually–and he emphasized usually–leaves the original writer the right to collect certain sources of income. For example, depending on the contract, if the owner licenses the music to a third party, the writer may be entitled to a percentage of income earned.
In a work-for-hire situation, a writer can be entitled to royalties although, Winogradsky said, many attorneys and producers in the industry don’t understand this concept. He cautioned writers about waiving their royalties when a production company tries to buy them out.
“You have to think to yourself, ‘Does it really matter? Are performing rights really all that important?’ And I will tell you that they are extremely important, especially performing rights because you can make incredible amounts of money from your performing rights societies by having your music broadcast on TV and on radio and in films,” the attorney said.
There are three music performing rights organizations (or societies) in this country: ASCAP, BMI and SESAC. A songwriter can only belong to one society, Tombak noted. One can join ASCAP and BMI rather easily, she said, but SESAC must invite a potential member to join.
Winogradsky said that belonging to a performing rights society is essential because “those are the people who are going to collect money from the broadcasters and pay you your writer royalties.” He advised registering as a member and registering the songs one has written.
It is also important to register your work with the U.S. Copyright Office for two reasons, Winogradsky said. The first is to establish a public record and the second is that if you ever have to litigate the subject of a copyright, you cannot file a lawsuit unless the work has been registered.
ROYALTIES, LICENSING
Tombak explained the three kinds of royalties through which writers and publishers make the bulk of their money: performance royalties, mechanical royalties and synchronization royalties. Performance royalties come from one of the three societies (ASCAP, BMI or SESAC). Mechanical royalties are generated for writers and publishers when music that one has created is recorded by an artist on a CD. Synchronization royalties are negotiated depending on use and are paid directly to the publisher who typically splits it with the writer. Winogradsky described synchronization as the marriage of audio to video as one, in a linear fashion, so that whenever a certain visual image is portrayed, the music plays with that image.
Blair related that his company, Groove Addicts, is primarily a commercial music house with a large library that was launched in 1997. Regarding the library he said, there are traditionally two licenses: blanket and laser drop. An example of a blanket license would be allowing a television producer to use as much music in the library for 13 episodes of a series. With a laser drop, every time the client used a piece of music, he or she would have to file a license application.
After the panelists’ opening remarks and a few queries from Jasko, the speakers answered questions from the audience. One session attendee said he owned a small publishing company and as it grows, he feels the weight of dealing with royalties and licenses. This includes what he put as “chasing errors,” namely finding and correcting inaccuracies in the systems outside of his company. He wondered how much time he should allot for these “defensive” activities which take time away from the “offensive” side of the business; the offensive thrust being to go out and get jobs. Blair noted that the defensive end is a major pursuit, noting that he had to hire two full-time employees to handle copyright administration at Groove Addicts. Tombak added, “You really have to be vigilant in pursuing your royalties.”
The AMP West Coast panel discussions are slated for each quarter of the year. The next session should take place in June. The program is part of AMP’s charter, which is to advance the art, science and business of music and sound production.
