The Definitive Guide to the Music Industry 10th edition M. WILLIAM KRASILOVSKY AND SIDNEY SHEMEL CONTRIBUTIONS BY JOHN M. GROSS JONATHAN FEINSTEIN BILLBOARD BOOKS AN IMPRINT OF WATSON-GUPTILL PUBLICATIONS / NEW YORK INTRODUCTION Part One: MUSIC BUSINESS TRENDS AND TRANSFORMATIONS 3 Chapter 1 THE MUSIC INDUSTRY IN THE TWENTY-FIRST CENTURY 4 Industry Growth 5 Factors Relating to Growth 7 Factors Inhibiting Growth 10 Legislative Changes 10 Pending Legislation 11 Part Two: RECORD INDUSTRY AGREEMENTS AND PRACTICES 13 Chapter 2 RECORDING ARTIST CONTRACTS 14 The Standard Agreement 14 Duration 15 Group Artists 16 Exclusivity 17 Recording and Release Requirements 18 Artist Royalties 19 Recording Costs 22 Recording Funds 23 Publishing Rights 23 Controlled Compositions 24 Tour Support 25 Video Rights 25 Assignment 26 Ownership and Use of Masters 27 Coupling 27 Accountings and Defaults 28 Bankruptcy 28 Chapter 3 CONTRACTS WITH MINORS 30 Voiding of an Agreement 30 Ratification of an Agreement 31 Statutory Provisions of Contracts with Minors 31 Parents' Guarantee of Contract Performance 32 Chapter 4 INDEPENDENT RECORD PRODUCERS 33 The Role of the Independent Record Producer 34 Label Deals and Pressing and Distribution Deals 35 Producer Royalties 35 Recording Funds 36 Production and Development Deals 37 Producer Fees 39 Music Publishing and Follow-up Rights 39 Contractual Safeguards 40 Chapter 5 FOREIGN DISTRIBUTION AGREEMENTS 42 Royalty Provisions 42 Advances and Guarantees; Term 43 Exclusivity 44 Broadcast Performance Fees 45 Music Publishing 46 Labels 46 Release Requirements 46 Record Clubs 47 Coupling 47 Cover Recordings 47 Samples and Materials 48 Accountings and Auditing 48 Termination Procedure 49 Variations in Currency Values 49 Transmittal of Funds 50 Jurisdiction over Disputes 50 Default Clauses 50 Chapter 6 LABOR AGREEMENTS 52 Key Labor Agreements 52 Arbitration 53 AFTRA and AFM Scale Payments 53 AFM Special Payments and Trust Funds 54 AFTRA Health and Retirement Funds 56 Retirement and Death Benefits 57 Royalty Performers 57 Contractors 58 Dubbing 59 AFM and AFTRA Scales for New Media 59 Protections Against Illicit Practices 60 Domestic and Foreign Territory 61 Other Income for Artists 61 Legislative Advocacy 62 Chapter 7 SOUND RECORDINGS: RIGHTS, RESTRICTIONS, AND ROYALTIES 63 Copyright Protection for Published and Unpublished Works 63 Authorship 64 Rights of the Copyright Owner 64 Copyrightable Works 65 Albums 65 Derivative Works 65 Compilations 66 Audiovisual Recordings 66 Foreign Sound Recordings 67 Neighboring Rights 68 Sampling 68 Master Licensing 69 The Audio Home Recording Act 70 The Digital Performance Right in Sound Recordings Act of 1995 72 The Provisions of the Act 72 The Digital Millennium Copyright Act of 1998 73 Foreign Performance Royalty Practices 75 Chapter 8 BOOTLEGGING, PIRACY, AND COUNTERFEITING 77 Federal Legislation 78 Piracy and Counterfeiting Amendments Act of 1982 79 Uruguay Round Agreements Act of 1994 79 State Legislation 80 Compulsory License for Sound Recordings 80 New Tactics 81 Chapter 9 RECORD COVERS, LABELS, AND LINER NOTES 83 Album Titles 84 Illustrations 84 Recording Identification 85 Trademarks 86 Anticounterfeit Practices 86 Warning Stickers and Censorship Issues 87 Part Three: MUSIC PUBLISHER AND WRITER AGREEMENTS AND PRACTICES 89 Chapter 10 COPYRIGHT LAW IN THE UNITED STATES 90 Copyright Revision: 1790 to 1976 90 The Copyright Status of Sound Recordings 91 Common Law Copyright 91 Statutory Copyright 92 Copyright Registration 92 Registration of Published and Unpublished Works 95 The Copyright Notice 98 The Deposit of Copyrighted Works 98 Transfers of Copyright Ownership 100 Errors in the Copyright Notice 101 The Correction of Errors 102 Fair Use 102 Copyright Protection of Song Titles 104 Compulsory Mechanical License for Recordings 105 Record Rentals 106 Jukebox Public Performance Fees 107 Copyright and Cable Television Transmission 108 Licensing for Noncommercial Broadcasting 109 Satellite Carrier Compulsory License 109 Chapter 11 THE DURATION OF COPYRIGHT PROTECTION 110 Term of Copyright Protection 110 The Supreme Court Decision on Eldred v. Ashcroft 110 The Duration of Copyright 111 Works Created by Natural Persons after December 31, 1977 112 Works for Hire; Anonymous or Pseudonymous Authors 112 Pre-1978 Works 112 Sound Recordings 112 Works in the Public Domain 113 End-of-Calendar-Year Copyright Computation 113 The Duration of Copyright Protection for Joint Works 113 The Determination of Date of Death 113 Copyright Renewal 114 Termination of Transfers 116 Pre-1978 Contracts (Renewal Termination) 117 1978 and Post-1978 Contracts (Transfer Termination) 117 Who Can Terminate? 117 Notice of Termination 118 Legislative Implications 118 Duration of Copyright and Protection Outside of the United States , 121 Chapter 12 THE USES OF PUBLIC DOMAIN 122 Works in the Public Domain 123 The Purposes of Public Domain ' 124 Determining the Public Domain Status of Works 126 The U.S. Copyright Office 126 The Library of Congress 127 Editions of Old Songs 128 Catalogues of Performing Rights Societies and the Harry Fox Agency 128 Other Reference Sources 129 Another Approach: Creative Commons 130 Copyright Registration of New Versions and Arrangements ofWorks 130 Chapter 13 ARRANGEMENTS AND ADAPTATIONS 132 Head Arrangements of Compositions 132 Copyrighting Arrangements 133 The Statutory Treatment of Arrangements 134 Duration of Basic Work Not Affected 13 5 Standards of Originality 135 Derivative Works 137 Soundalikes 139 The Arrangement of Works in the Public Domain 139 Foreign Treatment of Arrangements and Adaptations 141 Chapter 14 PERFORMING RIGHTS ORGANIZATIONS 142 Performance Monies and the World Economy 143 Clearing Functions 143 American Society of Composers, Authors, and Publishers (ASCAP) 145 Broadcast Music Inc. (BMI) 145 SESAC 146 Title Registration 147 i Surveying and Statistical Sampling 148 ; Membership in ASCAP, BMI, and SESAC 150 I The Fairness in Music Licensing Act of 1998 152 I The ASCAP Payment System 152 | The BMI Payment System 154 5 Loan Assistance 155 i Insurance Plans 155 I Writer Awards 156 I Foreign Collections 157 I Dramatic Performance Rights <~ 158 f I Chapter 15 MECHANICAL AND OTHER AUDIO REPRODUCTION RIGHTS 161 Parting with Possession; Returns 162 Notice of Intention . 163 Compulsory License Accountings 164 Identification of Copyright Owners 164 Negotiated Licenses 164 The Harry Fox Agency 165 Other U.S. Mechanical Rights Organizations 167 The Canadian Mechanical Rights Organizations 167 International Mechanical Rights Societies 168 The Writer's Share of Mechanical Fees 170 Record Clubs 170 Tide Use Restrictions 171 Record Rentals 171 Chapter 16 SONGWRITER CONTRACTS AND ROYALTY STATEMENTS 172 Duration of Copyright Assignment 172 Songwriters Guild Contracts 172 Copyright Divisibility 173 Royalty Statements 174 Recapture of Rights 175 Printed Editions 175 Sheet Music Sales 176 Mechanical Rights 176 Accountings and Audits 177 Default 179 Performance Fees 180 Assignments 180 Lyrics Versus Music 181 Royalties Held in Trust Funds 181 Arbitration 182 Exclusive Writer Agreements 182 Chapter 17 WORKS FOR HIRE 185 Factors Determining a Work-for-Hire Relationship 186 Commissioned Works 187 Assignments of Copyright 189 Joint Work Status 189 Chapter 18 CO-OWNERSHIP AND JOINT ADMINISTRATION OF COPYRIGHTS 191 Registration and Notice 191 The General Rights of Co-Owners 191 The Problems of Co-Ownership 192 Community Property 192 Synchronization Rights 193 Foreign Rights 194 Consent by Silence 194 Restrictions on Assignment 194 The Writer's Interest in Co-Ownership "194 The Cut-in 195 Chapter 19 COPYRIGHT INFRINGEMENT 197 Proof of Access to a Copyrighted Work 197 The Use of Music in the Public Domain 198 Vicarious Liability 199 Registration 200 Who May Sue for Infringement 200 Civil Remedies for Infringement 201 Court Costs and Attorney's Fees 202 Criminal Remedies for Infringement . 204 Mechanical Rights Infringement 204 Infringement by Importation 205 Copyright Registration 206 Recording Transfer of Copyright 206 Time Frame for Legal Actions 206 Sampling and Copyright Infringement 207 Chapter 20 INTERNATIONAL COPYRIGHT PROTECTION 211 The Berne Convention 211 The Effects of Berne Adherence 212 Droit Moral 213 Trade Negotiations and the General Agreement in Tariffs and Trade 213 The United States Trade Representative 214 The Geneva Phonogram Convention 214 World Intellectual Property Organization Treaties 215 Chapter 21 FOREIGN PUBLISHING 217 The World Market for Music 217 Representation by Subpublishers 218 Foreign Performing Rights Societies 218 Foreign Mechanical Licensing 219 Synchronization Fees 221 Printed Editions 222 Local Lyrics and Versions 222 Local Writer Royalties 222 Copyright and Term of Rights 223 Fees from All Usage, Accounting, and Audits 224 Subpublishing in Diverse Territories 225 The European Union 226 Default Clauses 227 Jurisdiction 228 Catalogue Agreements 228 Local Firms 228 Joint Firms 229 Termination of Joint Ownership 230 Chapter 22 THE WRITER AS PUBLISHER 232 Joint Writer-Publisher Firms 233 Self-Publishing 233 Sources of Copyrights for the Self-Publisher 235 Chapter 23 MUSIC FOR MOTION PICTURES 236 Rights Required for Films 237 Employee-for-Hire Agreements 237 Synchronization and Performance Licenses 238 Licensing Agents and Research Firms 239 Videos and DVDs 239 Music Publishing Rights 240 Recording Artist Royalties 241 Soundtrack Album Contracts with Record Companies 241 Component Parts of Films 242 Performances in Europe 243 Chapter 24 LICENSING RECORDINGS