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Bulletin YOUR DAILY ENTERTAINMENT NEWS UPDATE MAY 25, 2021 Page 1 of 27 INSIDE Copyrights, Royalty Splits & • Songwriter Groups More: ‘Ruthless’ NFT Market Want Their Voices Heard on CRB Sparks New Legal Debates Royalty Rate ASAP BY TATIANA CIRISANO • Shuttered Venue Operators Grants Are Late. Here’s When On April 26, an NFT of a Jean-Michel Basquiat draw- then get those licenses from rights-holders. This is an the SBA Says They’ll ing popped up on the marketplace OpenSea with the obvious step for lawyers like Bromley, but it’s an easy Arrive promise that the winning bidder would be granted one for artists to gloss over in the rush to capitalize on copyright ownership of the work and the option to de- the NFT market. • Identity, Awareness & Representation: An stroy the physical original. But after Basquiat’s estate “Any time a client asks me how this works, I tell AAPI Heritage Month intervened, confirming that the seller held no rights to them to start with, ‘What are you making?’” Bromley Conversation With the drawing, the NFT was removed within 48 hours. says. “All sorts of licenses are implicated, depending Spotify’s Ronny Ho The kerfuffle reflects confusion over how the rapid- on what you’re doing.” • SoundCloud Inks ly growing artistic medium fits into existing copyright If an NFT consists of a clip of music played over First-Ever A&R law — an especially thorny space to navigate for NFTs a video or graphic, for example, the creator needs a Partnerships With involving music, given the music industry’s complex synchronization license to marry the audio with video T-Pain’s Label, Linda web of rights-holders. As artists and executives are (usually from a publisher) and a master license to Perry & More clamoring to strategize how best to approach the reproduce the song recording (usually from a label). • Wherever Did They emerging market, then, so are their lawyers. Both licenses are non-compulsory, meaning that the Go? Why The Calling Lawsuits are “coming,” says entertainment law- rights-holder has free rein to choose their price or Disappeared After yer Jordan Bromley, who leads the entertainment refuse to grant a license at all. Delivering One of transactions and finance practice at Manatt, Phelps & Music attorney and LaPolt Law found- 2001’s Biggest Hits Phillips, LLP. “The number of threats being made of er Dina LaPolt says that NFT creators must also litigation is astounding.” clearly explain what the buyer is actually purchas- To begin with, artists who want to use music in an ing, as there is a common misconception among new NFT but don’t own all the recording and publishing collectors that purchasing an NFT means assuming rights must identify the relevant music licenses and (continued) TOTAL IMMERSION ESSENTIAL ANALYSIS of the latest business topics and trends formulated to give industry players the competitive advantage in a rapidly changing market. EXCLUSIVE QUARTERLY REPORTS that deliver in-depth, holistic reporting; case studies; and custom data designed to serve the industry. A DEEP DIVE LIBRARY stocked with intelligence on fan data, SUBSCRIBE TO BILLBOARD PRO FOR song catalog sales, TV synchs, Africa’s burgeoning music ACCESS TO NEW REPORTS business and the gaming industry’s embrace of artists. AND THE ARCHIVE 2021 PRIDE On June 5th, Billboard will publish its 3rd annual CONTACTS Pride issue honoring culturally moving and Joe Maimone influential people who have contributed to the 201.301.5933 | [email protected] community’s history and its current landscape. Lee Ann Photoglo Year-round Billboard and Rolling Stone celebrate 615.376.7931 | [email protected] the LGBTQIA+ community through the lens of music, amplifying the culture of the proud Cynthia Mellow LGBTQIA+ community across our editorial 615.352,0265 | [email protected] channels, including Billboard Pride. Marcia Olival 786.586.4901 | [email protected] Building on this platform, Billboard and Rolling Stone will be joining together for the entire month Ryan O’Donnell +447843437176 | [email protected] of June to celebrate love, acceptance, diversity and what it means to be queer in music. All month long, Billboard and Rolling Stone will be the go-to destination for music and entertainment Pride content. Leveraging our iconic voices within music and culture, Billboard and Rolling Stone will curate a mix of engaging video and social content featuring thought-provoking panels, heartfelt performances, and glam tutorials – all fostering a community of consumers and influencers in celebration of LGBTQIA+. ISSUE DATE 6/5 | AD CLOSE 5/26 | MATERIALS DUE 5/27 BB House_Pride_06_042421.indd 1 4/21/21 10:00 AM Page 3 of 27 IN BRIEF ownership of the underlying copyright and ficult,” Korn says. “If you find that the end they can get a higher price when they resell intellectual property. of the trail is an IP address in North Korea, it,” Bromley says. “It would be unfair to the “The buyer pays a substantial amount of good luck.” releasing artist to not attribute a portion of money for this NFT, and if they think they Rights holders who believe their work has the profit to the brand name itself.” own the underlying intellectual property been used in an NFT without permission There are many possible ways to reflect embodied on the NFT, that’s going to be can usually file a report with the NFT mar- this in the revenue splits. Out of the 50% of an issue,” says LaPolt, whose law firm rep- ketplace host, after which the marketplace total revenue allocated for music, 25% could resents deadmau5, who has sold more will investigate the issue and remove the get carved out for all the rights-holders (in- than $1.7 million in NFTs across several NFT if it is found to be infringing. In their cluding the publisher, label and artist), with drops since December. “The terms of service terms of use, the marketplaces currently the remaining 25% going straight to the art- need to be very, very specifically drafted.” do not assume responsibility for copy- ist for their brand. Alternatively, LaPolt sug- Unfortunately, the same qualities that right infringement by users, but that could gests that creators could allocate a third of make the blockchain appealing — it is de- change. “As these spaces get more and more the total revenue from an NFT to the music centralized, anonymized and global — will regulated, there is a risk that there will be artist, a third to the visual artist and a third make enforcing copyright law a challenge. additional scrutiny on them,” Korn says. to the music copyright holders. “You can’t call somebody who’s the CEO Even if licensing the music to create an In her experience thus far, “nobody has of the blockchain and have a transaction NFT is a fairly straightforward process, come with a heavy hand,” from the label shut down,” says Brian Korn, partner of Bromley says, things get complicated when side, LaPolt says. “But I don’t really give Manatt Financial Services who leads the it comes to divvying up the sale profits. them much to negotiate.” firm’s fintech practice. “It’s a much more So far, most creators are carving out 50% Bromley is confident that the lingering ruthless environment.” of revenue to the visual art and 50% to the issues with NFTs will work themselves If an artist believes their work has been music, which is divided amongst various out in time, and notes that it doesn’t make used in an NFT without permission, they rights holders from there. But recording and sense to have a market solution across all have the burden of tracking down the publishing deals complicate this further. NFTs anyway. “It really is case-by-case, holder of the “smart contract” attached to Artist lawyers like Bromley and LaPolt ar- because they’re all so unique and different,” the NFT, which contains lines of code that gue that because collectors are primarily he says. automatically execute behaviors (such as motivated to buy an NFT based on the name On the positive side, “It’s something new where revenue should flow). But that’s no or brand associated with it, which translates that we can put brainpower into,” he adds. easy task in the anonymized world of block- to a higher resale value, the music and visual “We do 1,000 producer deals a year; [NFT] chain, where buyers and sellers are typical- artists at the center of NFTs deserve the s are new, unique and exciting.” ly known only by their usernames and could lion’s share of the revenue — not the label. be located anywhere in the world. “The bigger the brand, the more success- “The chances of you being able to locate ful [the NFT] is, not because people want to and get cooperation from someone are dif- listen to the music but because they think AUTHORITATIVE INTELLIGENCE. DELIVERED DIGITALLY. CLICK HERE FOR FREE DELIVERY DIGITAL NEWSLETTERS 2 0 2 1 INDIE L A B E L P O W E R P L AY E R S On June 5th, Billboard will publish CONTACTS its fourth annual Indie Label Power Joe Maimone Players List. This special feature in 201.301.5933 | [email protected] advance of Indie Week (6/14-6/17) and Lee Ann Photoglo the 10th Anniversary Libera Awards will 615.376.7931 | [email protected] profile leading executives at top independent record labels, publishing Cynthia Mellow companies and distribution companies. 615.352,0265 | [email protected] Positioning themselves as the driving force Marcia Olival behind the success of independent music, 786.586.4901 | [email protected] these executives contribute to the independent music sector and to the Ryan O’Donnell +447843437176 | [email protected] world of music at large.

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