AES Section Meeting Reports

New York - June 9, 2015

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The New York Section of the Audio Engineering Society, The Recording Academy's New York Chapter, and The New School for Social Research presented a panel discussion on 'Understanding Copyrights'. This panel discussion explored the details of these new house bills while touching on under-utilized or unclaimed revenue based on existing royalty, rights, and trademarks.

Recordings were not protected until 1972. Songwriting has been protected for much longer. While royalties for satellite and streaming are paid to artists (via Sound Exchange), there are countries where artists are not entitled to royalties on radio (China, Iran, North Korea, USA). The Fair Play Fair Pay Act would have artists collecting royalties for terrestrial broadcast and for recordings prior to 1972. The National Association of Broadcasters (NAB) is pushing for a hollow resolution against this and have hired five lobbyists for this purpose. Under the Fair Play Fair Pay Act, the license would be capped at $500 per year for smaller stations. Why is there a push for the U.S. Government get involved? Well, it currently has less of a role in rights administration than the governments of other countries.

The payment structure in the USA doesn't pay foreign artists, resulting in USA artists being punished elsewhere. Where is the revenue in today's marketplace? Streaming! Deezer, one of the streaming services available, pays 70% of its revenue to artists. Many artists will get a percentage of a performance even if they do not write the songs being performed. This is because they are structuring deals as a consequence of the terrestrial royalty situation (see paragraph above). Artists are able to do this by taking advantage of the two types of rights involved in sound recordings; performing and performance.

In the beginning...most music on radio was live. This was certainly the case before the introduction of television. After the television was introduced, radio switched to playing records. Why? Cheap programming. At the time (1940s), radio networks owned record companies, which created a situation where there was no need to sort out the rights and royalties issue. How convenient. When the 1980s arrived and everybody called their cable company and said "I want my MTV!", the royalties that were paid for the music videos did not go to the artists in most cases.

After TV, and by the time the M in MTV became irrelevant, piracy came around. After piracy came streaming. If video killed the radio star, then streaming killed piracy. YouTube is a means of promotion. It's where you can find the "M" that used to stand for music in "MTV".

What does this mean for artists in today's marketplace? It means they are signing what are known as 360 deals, where contract royalties may factor into the promotion budget at 14%. Is this a bad deal? That depends on the artists situation.

Even with CD sales declining, do you know how the cost of a CD is split amongst the entities that put it in your possession? The artist earns about $0.091 per song, per record for a CD sale. 33% goes to the retailer. 15% goes to distribution. Then there are producer points and record company costs.

What about existing catalogs? Performance income does not decline as much in certain catalogs. Writers do not share in the value of a catalog, with each catalog acquisition putting writers further away from the song they wrote.

Producers, mixers, and engineers may have an interest in the copyright of a song or recording depending on what they contributed to it. Who gets the revenue? That depends on what is negotiated. Some writers work under the premise of an equal split unless something else is negotiated. Some bands split the revenue amongst each other because they jam and find a song. Some bands split the publishing equally, and split the writing based upon a person's contribution.

As for rights, copyright warnings, and the Internet, even the lawyer on this panel said "Just put your mashup on YouTube. All they will do is take it down."

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AES - Audio Engineering Society