Pop Quiz: Releasing A Live Recording As An iTunes Download?

By George Howard

Last week we posted a music publishing pop quiz. There was a hypothetical followed by 5 questions, and today we’ll reveal the answer to the second question. The hypothetical is below as a refresher, followed by the question and answer.

A Jazz artist performs her own composition in a club in the United States. In the middle of the song, the guitar player plays a solo. As part of his solo he quotes a fifteen second snippet of The Flintstones theme song.

And the question was…
2.  Someone from the artist’s label records the live performance that took place in the club, with the intent of releasing the song as a download from iTunes. What must be done to do this, and, when released, who gets paid and by whom?

Here’s the answer:

The question states that the person doing the recording is from the artist’s label, and, therefore, implies that the artist is signed to the label. In this case, the recording of the song in the club is really no different than if the song was recorded in a studio. In order to discern what “must be done,” we must—as always—go back to the six exclusive rights of copyright that the writer(s) of the song receives immediately upon fixing an original work in a tangible medium.  To do this, approach the question from what the label really wants to do.  Of course, the label wants to record the song, but to what end? Recording it, but then not doing anything with the recording doesn’t do the label any good. What the label really wants to do is to reproduce and distribute the song.  Of course, as we know, only the copyright holder of the song has the right to reproduce and distribute the song.  Therefore, the writer of the song, the jazz artist, must grant the label the right to distribute and reproduce. If the label is not granted this right by the jazz artist, the label will be infringing upon (at least) two of the artist’s six exclusive rights: the right to reproduce and the right to distribute.

The mechanism that the label uses to facilitate the granting of the rights of reproduction and distribution from the artist to the label is called a Mechanical License. Put simply, this license grants the label the rights to mechanically reproduce (and distribute) the artist’s song.

Congress has set a maximum rate that the artist can charge anyone who desires to reproduce and distribute the song; it’s called the statutory rate, and it currently sits at $.091 per song, per reproduction for songs under five minutes in length. This rate can be reduced by the holder of the copyright. What this means is that every time the artist’s song is reproduced, the label must pay the artist $.091. This is known as a mechanical royalty.

This question, however, is complicated by the fact that there are really two songs (or at least one song and a part of another) that the label wants to record, reproduce, and distribute. That is, there’s the jazz artist’s song, but also the snippet of the Flintstones theme song that the guitar player plays in the solo.

Because the guitar player quotes just a bit of the Flintstones theme, rather than, for instance, performing the entire song separate and apart from the jazz artist’s song, we’re dealing with another exclusive right of copyright: the right to create derivative works.

As defined in 17 U.S.C. § 101:

A “derivative work” is a work based upon one or more pre-existing works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted.

In other words, if you create a work that is based on another work, it’s classified as a derivative work.  By including a portion of the Flintstones theme in the jazz artist’s song, the jazz artist’s song can be classified as deriving some/all (it doesn’t matter how much) of its character from the Flintstones theme song.

When someone samples another song and places it in his/her song, he/she has created a derivative work from the work that was sampled.

One of the exclusive rights of copyright is the right to create derivative works; that is, only the copyright holder of the original work can create derivatives of that work. Anyone else who does so is infringing upon the original author’s copyright.

In our hypothetical, therefore, unless the label who recorded the song, and desires to release the song (i.e. reproduce and distribute it), gets permission from the Flintstones’ theme copyright holder,  the label will be infringing upon the copyright holder’s exclusive right to create derivatives, and to reproduce and distribute.

Unlike with mechanical licenses, there is no compulsory license for the creation of derivatives. Therefore, the label must go to the copyright holder of the Flintstones theme and negotiate a deal.  The copyright holder of the Flintstones theme can simply deny the label the right to create derivatives (and therefore bar them from reproducing and distributing). Alternatively, the copyright holder can grant the derivative, and make a deal for the reproduction and distribution (essentially, a second mechanical license) under whatever terms both parties agree upon. This can include the Flintstones copyright holder receiving a payment for the derivative, a percentage of the mechanical royalty (i.e. the payment for the right to reproduce and distribute), or both.

 

Check back Friday, August 10th for the answer to question 3:

3.  A movie producer desires to place thirty seconds of the live recording referenced above (including 10 seconds of the Flintstones theme) in a movie. What must be done to do this, and, when the movie is shown on TV who gets paid and by whom?

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George Howard is the Executive Vice President of Wolfgang’s Vault. Wolfgang’s Vault is the parent company of Concert Vault, Paste Magazine, and Daytrotter. Mr. Howard is an Associate Professor of Management at Berklee College of Music

  • http://www.hakantuna.com hakan tuna

    or quite simply to cut out all of the above mentioned hassle, the artist can edit out the short section of the Flintstones theme from the solo, and then there would be no problem..

    • http://www.9giantsteps.com George Howard

      Correct, Hakan Tuna, however, I wrote this hypothetical to help people understand the various issues associated with different uses.

      Best,

      George

  • http://none Gary Padgett

    Thanks George for this insight – gp

  • http://betsyagain.com Betsy Again

    Thank you for this quiz! It’s an excellent tutorial.
    I just released my first album, and I’m trying to figure out how to get everything all squared away with the musicians and registries. Your blog gives the clearest and easiest-to-read explanations. Really. there is no one else educating musicians the way you are. Thank you.
    -Betsy