July Industry Wrap-Up

Facebook Moves Closer Towards Copyright Protection


Folks in the entertainment industry (among other sectors of business) have been following Facebook’s growth and expansion into the music space, whether it’s sharing videos, partnering with streaming platforms to encourage social engagement and discovery, or supporting user-generated content and live feeds. With that, of course, comes pressure to protect songwriters, artists and other creators in the realm of copyrights and licensing and ensure that they are able to collect their owed share of revenue. Like YouTube before it, critics have been waiting to see what the social media giant does next in this realm.

This month, Facebook acquired Source3, a content rights management startup, whose goal is “to recognize, organize and analyze branded intellectual property in user-generated content”. Source3’s technology serves brands or users uploading content to “measure their presence or take action against infringers of their copyrights and trademarks.”

While this move for Facebook looks to serve users and brands outside of music, the company did begin hiring its first music licensing staff recently, likely satisfying labels and publishers seeking to further cement social media streaming royalties as a revenue source. And for independent artists outside of the label system, this acquisition can be seen as a step in the right direction as it hints at future revenue opportunities and a tightened up system to combat copyright infringement.

Amazon Music’s 3rd Place Status – Bigger Than It Sounds?


According to MIDiA Research, Amazon Music is now the 3rd largest music subscription service. MIDiA has been tracking usage of streaming apps on a quarterly basis since 2016 and claims Amazon has grown strongly quarter upon quarter: it ranks 2nd behind Spotify as ‘most widely used’; boasts the ‘largest installed base’ of active users (weekly); and as mentioned above, it ranks 3rd in subscribers with around 16 million, greatly surpassing the 4th and 5th placed QQ Music and Deezer (respectively).

Mark Mulligan of MIDiA’s Music Industry Blog argues that while those figures are impressive in an ever evolving streaming market, the real beauty in Amazon’s growth lies in its ability to convert Prime Subscribers (Amazon’s premium shopping service with annual fees) to Amazon Prime Music or Amazon Prime Music Unlimited users. With no additional costs, new payment schedule or commitments, users of the Amazon Prime app can seamlessly shift their music consumption habits – or adopt streaming for the first time entirely – to a trusted source that they are already actively using on a weekly basis.

In addition to subscriber growth, Mulligan also acknowledges not only the advent of the Amazon Echo (Amazon’s proprietary home speaker, of which they’ve sold upwards of 13 million) but also what he calls “The CD Factor”. As TuneCore Artists who have distributed to Amazon Music On Demand know, CDs can easily be made available for music fans who still prefer the physical medium.

While that might not strike some as a huge advantage, consider that physical sales still dominate in Japan and Germany, the world’s 2nd and 4th largest music markets – two out of the four markets in which Amazon Prime adoption is concentrated. Between this and a growing subscription rate, artists have good reason to look to Amazon Music as a propeller of revenue and discovery when they’re ready to release new music.

Pandora Hits Milestone and Introduces New Features


If you’ve visited our site, read our blog, scanned the industry trade sites, or signed into your TuneCore dashboard recently, you’ll know we’re very excited to be approaching a $1 billion  cumulative payout to independent artists this year. Leave it to our friends at Pandora to hit their very own BILLION milestone: one billion impressions on its “Artist Marketing Platform”. Congrats, Pandora! The AMP was revolutionary for its time as it allowed artists to use listener data to learn about their audience – similar to how TuneCore allows you to view data that makes it easier to decide where to spend ad dollars or concentrate touring destinations.

With the ability to pass direct audio messages to fans, Pandora says the platform has been used by over 11,000 artists, who have collectively driven said one billion impressions, which is a major benchmark for the relatively young direct-to-fan marketing approach.

On top of this news, Pandora announced two new direct-to-fan features for the AMP: the ability to promote a single (via pre-recorded audio message), and the ability to promote concert dates (via customized flight dates, ticket purchase links, and geo-targeted messaging). While Pandora remains a curated service, TuneCore announced last year that we’ve partnered with the internet radio heavy-hitter, allowing TuneCore Artists to submit their releases for consideration. With these added features, it makes more sense than ever to be taking advantage of this submission!

Breaking Down Copyrights In Music

[Editors Note: This is a guest blog written by Justin M. Jacobson, Esq. Justin is an entertainment and media attorney for The Jacobson Firm, P.C. in New York City. He also runs Label 55 and teaches music business at the Institute of Audio Research.]

 

We have previously explored the reasons to register a copyright and the procedures to effectuate it. In this article, we will explore copyright law as it specifically relates to the music industry to ensure the proper exploitation and monetization of an artist’s finished song.

For a work to be copyrightable, it must be original and fixed in a tangible form, such as a sound recording fixed on a CD, MP3 or other digital sound recording file format such as a WAV file. Some examples of copyrightable material that are common in a musician’s career are the actual song recordings, the lyrics and underlying musical composition, music videos or other audio-visual works, photographs, logos or other visual materials and any biography, website or other unique textual information the artist creates.

In particular, copyrights as they apply to music are unique in that every track has two copyrights. One of these is a copyright in the song, i.e. the musical composition, which consists of the lyrics and underlying music (beat, instrumental). The other is a copyright in the sound recording or “master recording” itself. The “C” in the circle (©) is the appropriate notice for the lyrics and underlying musical composition, which are protected by the “Performing Art” Copyright. The appropriate notice is a “P” in a circle (℗) for the actual sound recording, which is protected by the “Sound Recording” Copyright. This indication originates from the International Phonogram Convention and refers to a “Phonogram”, which is used when referring to any sort of audio master.

The same party or several parties may own rights in each of these distinct copyrights for the same music. For example, “All Along The Watchtower” was originally written and composed by Bob Dylan. It has been subsequently performed and “covered” by several artists, including Jimi Hendrix. In this situation, the copyright in the underlying musical composition (the lyrics and musical arrangement) is owned by Bob Dylan (or his Publishing Company); while, the copyright in a particular sound recording is owned by Jimi Hendrix (or his Record Label).

This situation most commonly arises where a singer is merely involved in and has rights in the sound recording copyright of a song by being the actual featured vocalists on a track; while, the other parties who wrote the track own rights to the underlying musical composition.

Each copyright confers each owner with several exclusive rights. These include the exclusive rights to reproduce the work, including the mechanical reproduction of a musical composition in CDs, downloads and vinyl as well as to authorize third-parties to do the same. It also includes the exclusive right to distribute the work (Spotify, Pandora, YouTube), to prepare derivative works based on the original work (sequels, spin-offs), to publicly perform the work (concerts) and to publicly display the work.

Therefore, a copyright generally provides the owner with the exclusive right to publicly distribute copies of their work by sale, rental, or lease and to publicly perform or display the work, such as selling copies of a CD or publicly performing a musical composition at a restaurant or nightclub.

In the music business, the songwriter and composer typically assign their copyright in the underlying musical composition to a publishing company in exchange for receiving songwriting royalties. The income is generally split in half, even though the publisher collects all of the money (except for small performing rights). Fifty percent (50%) of the income goes to the publisher, and the other fifty percent (50%) of the income is split between the composer, the lyricist, the arranger, the translator, etc. The fifty percent (50%) that goes to the “publisher” is typically referred to as the one hundred percent (100%) “Publisher’s share” and the fifty percent (50%) belonging to the songwriters, arrangers, lyricists, etc. is typically referred to as the one hundred percent (100%) “Songwriter’s share.” For a more in-depth look at publishing monies, check my prior article on this topic.

Additionally, the copyright in the sound recording is generally assigned to a record label in exchange for receiving royalties for the sale and licensing of the sound recording. The sound recording copyright may be owned by the label and may be considered a “work for hire.” Included in this assignment may be a mechanical license, which authorizes the label to mechanically reproduce the underlying musical composition on phonograms or other sound carriers such as downloads.

In order to make records, downloads, tapes, and CDs, the record label requires a mechanical license from the music publisher. Until the first initial public release of the musical composition, the songwriter and publisher have complete control over issuing licenses. However, after this first release, anyone else can create their version of the song (a “cover” track) by paying statutory fees and obtaining a compulsory mechanical license.

A “compulsory license” is one that cannot be refused by the songwriter (or publisher), i.e., it does not require the songwriter’s permission for you to record his song. In the United States, The Harry Fox Agency is the foremost mechanical rights agency. It was created by the National Music Publishers Association to administer and issue these compulsory licenses and to collect the mechanical royalty license fees and distribute them to the appropriate parties. Additionally, when there are more than one owner of a particular copyright, unless there is an agreement to the contrary, each co-owner can license the full copyright to a third-party subject to an accounting to their co-author and paying over their share of the royalties.

As is evident, the music business and the rights associated with the works distributed are part of a complex system that has been developed over time and shifts with the changing landscapes and with the advent of new technologies. Therefore, it is essential for a creator to protect their rights in their completed work so they can properly license and monetize it.

This article is not intended as legal advice, as an attorney and/or an accountant specializing in the field should be consulted.

Music Sampling: Breaking Down the Basics

[Editors NoteThis is a guest blog written by Justin M. Jacobson, Esq. Justin is an entertainment and media attorney in New York City. He also runs Label 55 and teaches music business at the Institute of Audio Research.]

With advancing technology and the development of new digital musical techniques, it has become even easier for an artist to “sample” and integrate another’s finished recording or sound bite into a new, altered and derivate work created by a new artist.

In today’s evolving marketplace, commercial DJs such as Girl Talk and many of today’s top hip hop, dance and pop music producers are all mixing and weaving together different “samples” (a portion of another’s recording) into their new “music.”  With this practice becoming even more prevalent, a proper understanding of what sampling is and how to obtain proper clearance to legally utilize the sample becomes an essential factor in a song’s potential profitability as well as marketability.

“Sampling” is best described as reusing a specific portion of another’s sound recording. The amount used varies; from as little as merely integrating another’s unique drum combinations or guitar rift into a song, to utilizing the entire chorus or a complete verse from a song.  This action, in simplest terms, can be viewed as merely “copying” and “pasting” a portion of another’s existing sound recording into your new work.

Unlicensed instances of this practice can subject a creator to potential liability for copyright infringement; however, there are ways to avoid potential liability and obtain proper permission to utilize a “sample” of another’s work.

In order to properly and legally “sample” another musician’s work in an artist’s track, the sampling artist must obtain a “sample clearance” from the appropriate owner(s) of the original recording.  Since there are two copyrights in every song — the sound recording (typically administered by a record label, e.g., Interscope Records) and the underlying musical composition (typically administered by a publishing company, e.g., Sony/ATV) — a party must obtain permission from both copyright owners and enter into a licensing agreement with each owner in order to legitimately utilize a “sample.”

There may be situations where a use is determined to be “de minimis” and too small to require licensing; but, that is a complicated situation which requires serious analysis.

Generally, in order to ascertain who the proper owners of each respective copyright are, you can start by accessing and searching through the U.S. performing rights society databases (i.e. ASCAP or BMI).  These databases generally list all the relevant writers, producers and appropriate publisher information for a particular track.  Typically, there is also direct contact information listed in the database; and if not, it is advisable to look for a department that handles “licensing” or “sample” and/or “clearance” at the specific company as those are the individuals who generally handle third-party licensing of the finished recordings.

Once you determine the appropriate licensor contacts, an individual should request a “sampling” license.  This licensee request should generally include:

  • How long the sample is (minutes? seconds?),
  • What part of the song you are planning to use the sample (i.e., the whole chorus, a drum loop, etc.),
  • How you are planning to use the sample (solely replacing a chorus, distorted in the background, continuously looped, etc.), the number of units you plan to create or distribute,
  • What types of media you will use (CD, ringtones, streaming, etc.).

Some licensors may also require you to provide an actual copy of the new recording for the licensors to listen to prior to granting any license.

A typical sample license may include an up-front license fee as well as a royalty on each recording sold and/or may include an actual ownership interest in the new recording for the original artist, especially when a substantial portion of the original track is utilized or when the artist is extremely well-known.

Sometimes deals are made on a “flat-fee” buy-out basis.  There are a variety of factors that may determine a licensing fee, including the success of the original song, the success and notoriety of the original artist, the success and notoriety of the sampling artist, the length of the sample, how it will be distributed and how the sample will be used in the new recording.

Generally, the more famous the original track is and the longer the sample used is, the larger the license fee may be. Thus, each artist’s bargaining power comes into play because the alternative (not licensing the “sample”) could end up in litigation with more significant costs, especially if the sampled song ends up being a commercial success.  Sometimes, they will even request an ownership interest in publishing on the new composition.

Alternatively, since a copyright infringement claim is based on substantial similarity and access, an artist can attempt to independently create a desired recording and utilize this new recording for its own track.  Since the artist is not technically “sampling” the exact existing sound recording, the subsequent similar track might not subject the sampling artist to any liability for copyright infringement of the sound recording.

The policy behind this is that if an individual creates his own recording, even if it sounds identical to the untrained ear, there will still inherently be enough variation that this subsequent recording should not be considered an infringement. Thus, the sampling artist would then only need to obtain permission from the publisher who owns the underlying musical composition.  There, no permission from the record label who owns the sound recording would be needed.

However, there is always potential for a lawsuit, as a long-time British colleague once said, “where there’s a hit, there’s a writ (lawsuit).”


This article is not intended as legal advice, as an attorney specializing in the field should be consulted.

April Songwriter News

By Dwight Brown

As spring settles in, songs, activists and artists are creating news.

  • The iconic civil rights song “We Shall Overcome” may be headed to Public Domain territory.
  • Government regulations are stymying songwriters, but there may be a way out.
  • Led Zeppelin may have a “Whole Lotta Love” for borrowing tunes.

There’s a lot going on.

The attorneys who liberated “Happy Birthday” go after “We Shall Overcome.”


Making the case that copyrighted songs like “Happy Birthday” belong in the public domain is becoming the norm for the law firm of Wolf copyright iconHaldenstein. As reported in Hollywood Reporter, their newest lawsuit centers on the classic civil rights song “We Shall Overcome.” “The lead plaintiffs in the lawsuit, the We Shall Overcome Foundation, say they are producing a documentary movie and that “We Shall Overcome” will be performed in it. They requested a quote for a sync license from the defendants.” The outcome: 1. “We Shall Overcome” is a difficult song to clear. 2. The song cannot be cleared without review by the rights’ holder. 3. Their request was denied.

A putative class action was filed in New York federal court against the Richmond Organization and Ludlow Music, Inc., seeking a declaratory judgment, injunctive relief and the return of money for the licensing of the song. An investigation and a piece in The Atlantic reveals that the song’s melody may date back to a 1792 hymn, “O Sanctissima.” The lyrics probably evolved from a 1901 hymn by Philadelphia’s Reverend Charles Albert Tindley, were adapted in 1945 by striking union workers, then by singer Pete Seeger and in 1960 by folksinger Guy Carawan, among others.

Looks like “We Shall Overcome,” the song The Library of Congress calls “the most powerful song of the 20th Century,” has a lot of parents and a brand new lawsuit.

Which government regulations choke the lifeblood out of the songwriting industry?


A guest post in Forbes.com gave David Israelite, the President and CEO of the National Music Publishers’ Association, an opportunity to raise awareness about government regulations that stymy songwriters. “Songwriters are the most heavily regulated part of the music industry. A stunning 75% of their income is controlled by the federal government. In 1909, the sale of copies of compositions was put under a compulsory license—meaning anyone could use them, for a government-mandated rate. At that time, the rate was two cents. Now it is only nine cents.”

Around WWII the main non-profit organizations that license songs govt iconand distribute royalties to songwriters (ASCAP and BMI) were dealt a massive blow by the Department of Justice (DOJ). Forced regulations, “consent decrees,” prevented songwriters and music publishers from selling their work in a truly free market.

Israelite, “DOJ has opened a formal review of the regulations governing ASCAP, BMI and the thousands of publishers and songwriters they represent.”

Possible outcome?

  1. Relaxing the 70-year old shackle of the PRO consent decrees,
  2. Allowing ASCAP and BMI to license music creators’ songs in a free market.
  3. Ending policies in the digital age that were created before transistor radios.

Led Zeppelin climbs a stairway to other people’s music. Is anything new?


guitar iconLed Zeppelin’s song “Stairway to Heaven” is being scrutinized by Billboard as it follows a ruling by U.S District Judge R. Gary Klausner that lawyers for the trustee of late songwriter/guitarist Randy Wolfe (of the 1960s rock group Spirit) had shown enough evidence to support a case that the 1971 hit “Stairway to Heaven” copies music from the 1966/’67 Spirit song “Taurus.”

Circumstantial evidence: Led Zeppelin and Spirit performed at some concerts and festivals around the same time, but not on the same stage. Klausner wrote that there’s a circumstantial case that Zeppelin may have heard “Taurus” performed.

Incriminating evidence: Digital Music News printed a Roger Plant quote from the bio/book Led Zeppelin IV that notes an instance where Zeppelin copied music: “I think when Willie Dixon turned on the radio in Chicago twenty years after he wrote his blues [You Need Love], he thought, ‘That’s my song [Whole Lotta Love].’ … When we ripped it off, I said to Jimmy, ‘Hey, that’s not our song.’ And he said, ‘Shut up and keep walking.’”

Stairway and Taurus may have a Granddaddy: A nearly identical tune by baroque composer Giovanni Battista Granata, written in 1630, has similar sounds. That melodic line may push both songs into public domain territory.

Someday, will all songs be derivative in one way or another?

This is a great time to have TuneCore Music Publishing Administration in your corner.

SOUND BYTES

Team up with TuneCore Music Publishing Administration.

March Songwriter News

By Dwight Brown

Spring forward. Get ahead.

The publishing industry is becoming an investment goldmine. Artists who applied to a songwriting competition TV show get a wakeup call. A Berklee professor sues Spotify, while Spotify settles with NMPA. A hot debate over the length of copyright terms erupts.

There’s a lot going on for songwriters.

Michael Jackson’s estate scores $750m payday through publishing.

“An important, unrealized asset in this business is music publishing,” says Paul Young, a music industry studies professor at USC’s Thornton School of Music. “You’re giving permission to use a song … to a radio station, film company, TV company. Transactions that are far less threatened by music’s digital revolution.” His remarks are quoted in Marketplace.org’s article “Why Music Publishing is Still Lucrative,” which highlights the $750m mega deal Michael Jackson’s estate scored for selling its 50% share of Sony/ATV.

The Guardian breaks down impressive numbers for a company that owns the publishing rights to some works by The Beatles, Taylor Swift, Beyoncé, Lady Gaga:

1985: Jackson buys ATV Music for $41.5m ($11m cash investment).

1991: Jackson sells 50% stake in ATV to Sony for $100m.

2016: Jackson estate’s sells 50% share of Sony/ATV to Sony for $750m.

Publishing gave Jackson, posthumously, his most massive payday ever. Way bigger than Thriller. And Billboard is quick to point out that the lifetime earnings from the original deal are closer to 1.31b, when annual dividends and other fees are included. Making Jackson’s song “Don’t Stop ‘Til You Get Enough” sound prophetic.

Controversy regarding Songland TV show stresses songwriter rights.

March 20, 2015, Billboard ran an article spotlighting a new NBC show for songwriters called Songland, that would be produced by Dave Stewart, Audrey Morrissey (The Voice EP) and Adam Levine (The Voice coach). “While artists make money on songs that they record, songwriters have multiple avenues and points at which they can generate hefty revenue from their works.”

In March 2016, Hypebot featured a guest post by entertainment attorney/blogger Wallace E.J. Collins III Esq., in which he delved into onerous details on the Songland Submission Form.

Key areas of concern:

  • NBC owns all rights to use and exploit all songs involved in show. Songwriters lose rights to songs that weren’t even selected.
  • Songwriters waive rights to royalties and rights to sue.

Wallace, never assuming malicious intention, still made clear points:

  1. Most songwriters make their life’s savings off just a few big hits and giving away their best work for free is extreme.
  2. Writers should read all of the language in any agreements and decide if the risk is worth the reward.

Shortly, Billboard relayed an exclusive from NBC which stated that the language on the submission form had been changed to alleviate writers’ concerns. Morrissey clarified, “We wish to be abundantly clear that by signing the casting application, songwriters do not transfer ownership of any of their original songs. This show is truly a celebration of songwriters and their craft.” Problem solved and several lessons learned.

Berklee Prof. sues Spotify. Spotify settles with NMPA. Now what?

Billboard notes that singer-songwriter Melissa Ferrick (an associate professor at the Berklee College of Music) and the law firm Gradstein & Marzano filed a class-action suit against Spotify. “They’ve infringed on 127 of my copyrights. Infringe-now-and-pay-later cannot become the norm,” says Ferrick. Her lawsuit follows one by Cracker frontman David Lowery. Both are complicated by a recent settlement…

The National Music Publishing Association (NMPA) announced its $30m settlement between Spotify and its members over over unlicensed and unpaid mechanical royalties due to publishers and songwriters. Billboard.com reports the agreement covers the period between Spotify’s inception through June 30, 2017. This settlement, together with the pending class action suits, serves to highlight the absence of (and real need for) a centralized and reliable database covering all music rights. In the wake of these legal actions, several companies have come forward with proposed solutions to this problem. 

To reduce or not to reduce Copyright Terms? That is the question.

In a guest post on Hypebot Stephen Carlisle, of Nova Southeastern University, contemplates the possible demise of the current copyright term: Life plus 70 years after death for a human author, or 95 years for a corporate author. Post 70/95 years, a song enters public domain and is available for anyone’s use—free.

The rationale for supporting shorter terms:

  • If copyrights are in public domain earlier, the public benefits.
  • A copyright length of 14 years is close to that in the first copyright law.
  • Protection offers negligible incentives to authors.

Carlisle counters with reasons for the longer copyright terms:

  • The Berne Convention, signed by U.S. and 170 nations, commits to a minimum copyright term of ‘life of the author plus 50 years.’
  • Terms begin upon death and a 14-year term cheats heirs out of viable income from songwriters who die young. (E.g. Kurt Cobain died at 27.)
  • The 5th Amendment to the Constitution states that “…private property [cannot] be taken for public use, without just compensation.”

Shortening copyright terms may not be such an easy feat, all things considered.

It’s now common knowledge: Publishing is a really, really smart investment. Writers should read agreements carefully before signing. The fight for proper compensation for songwriting is a work in progress. Copyright terms make a big difference.

This spring is a great time to have TuneCore Music Publishing Administration in your corner, and remember with TuneCore, songwriters always retain 100% of their songs’ rights.

SOUND BYTES

A Walk-Through: Sampling

By George Howard
(Follow George on Twitter)

I’ll be writing a periodic set of articles all designed to present the necessary information to make complex topics in the music business more easily understood—”walk-throughs,” if you will.  The first in the series is a walk through on sampling.

I chose this topic because it allows us to view an action—sampling—which requires an understanding of an array of music business elements.  As such, I’m able to introduce several important concepts at the same time.  Even if you yourself are an artist who does not sample, it’s important to understand the process because someone may desire to sample your music.

First, a definition.  Sampling is the act of inserting a portion of another work into your work. For instance, Vanilla Ice inserted the bass line from the David Bowie/Queen composition “Under Pressure” into his song “Ice, Ice, Baby.” As such, Vanilla Ice sampled David Bowie/Queen’s song.

Whenever you question whether something is allowable in the music business, you should always begin with examining the bundle of rights that are automatically granted to copyright holders upon the creation and fixation (writing down or recording) of an original work of authorship.  For a primer on this, please refer to this handy guide.

Ok, let’s take a look.

First things first, should you desire to insert the copyrighted work of another artist into your own work (i.e. sample their work), you immediately bump into that artist’s exclusive right to create derivative works.  This—the right to create derivatives—is one of the six rights conferred on copyright holders.  What this means is that only the copyright holder can do things like: make a translation of their song, create a screenplay of their song, and—most relevant here—create a new song that is in any way derived from the original composition.  So, inserting a portion of someone else’s work—however short that insertion might be—is deemed to be creating a new work derived from another work.  Only the copyright holder of the original work can do this without infringing upon another’s copyright.

What this means is that should you desire to sample someone else’s work in a song you have written, you must go to the copyright holder(s), and seek permission to do so.  Similarly, should someone desire to sample your work in one of their songs, they must come to you. Fair is fair, right?

In terms of what type of deal you must strike with this person (or, they with you), there is no compulsory rate.  In other words, unlike, for example, when you want to cover someone’s song, and can rely on the compulsory license statute, which establishes the rules (including what you must pay the copyright holder of the song you cover), no such statute exists with respect to derivative works; it’s a purely negotiated dynamic.  The person who controls the copyright you desire to sample in your work can grant you the right to create a derivative for free or for whatever fee the market will bear, or just say no, and, thus, keep you from sampling the work at all.

Of course, the same rules apply to you when someone wants to sample your work.  This is reasonable. Imagine someone wants to use your work in their work, but you feel their doing so would present your work (and, by extension, you) in a way that you’re not comfortable with—you wouldn’t want them to be able to just do it anyway.  Similarly, if you are the copyright holder of a very popular song, and someone who is less well-known wants to sample your work in their song (I’m looking at you P-Diddy), you might reasonably feel that this artist is reaping disproportionate benefit from your song; in other words, the popularity of “their” song is contingent upon the established popularity of your work.  In this case, you would want to be compensated in such a way so as to not feel that the artist sampling your work is free-riding, and being unjustly enriched.  By not having a compulsory rate, you are able to do this.

Before we move on to further details with respect to compensation, let’s pull back and examine what exactly is being sampled.  For every song there are two copyrights: the copyright in the composition itself (represented by the (c) symbol), and the copyright in the sound recording of the song—frequently referred to as the “master;” this is the recording/version of the song that is on a CD or download (it is represented by the (P) symbol).  While the songwriter or the songwriter’s publisher is typically the copyright owner of the composition (the (c)); the sound recording (the (P)) is typically owned/controlled by the label who releases the record/CD/download.  Of course, if the songwriter releases the work himself/herself he/she would be the owner of both the (c) and the (p).

Both the (c) holder and the (p) holder have the exclusive right to create derivative works, and so it’s not only the writer of the song (the (c) holder) that you must obtain permission to create derivatives from, but also the copyright holder of the sound recording/master (the (p) holder)—again, typically the label.

Either party can say no, and either party can negotiate whatever deal with you that they want.  Frequently, these deals are “Most Favored Nations” (MFN), meaning that whatever deal is struck with one party (the (c) holder, for example) must also be struck with the other party (the (p) holder).

The copyright holder to the composition (the (c) holder) is the dispositive party.  That is, if the (c) holder denies the usage, it’s game over.  If, on the other hand, the (c) holder agrees to the usage, but the copyright holder of the sound recording (the (p) holder—typically, the label) says “no,” the person desiring the sample can re-record the sample, and, thereby, bypass the (p) holder.

Obtaining permission from the rights holders to create a derivative work is the first step, but, again referring to the six rights the (c) holder(s) are conferred with, we see that there are other steps that must be taken.

Simply having the right to create a derivative, and, thus, include a sample of someone else’s work in your work, doesn’t do you much good if you can’t exploit (sell) it.  In order to sell you must have the right to do at least two other things that—unless a deal is struck with the copyright holder—only the copyright holder has the right to do: reproduce and distribute the work.

The rights to reproduce and distribute a work are, of course, essential to selling that work. Labels that desire to reproduce and distribute the copyrighted works of a songwriter on the label’s releases do so via a “mechanical license.”  Therefore, when a sample is inserted into a song, unless the copyright holder(s) of the sample waives their rights with respect to reproduction and distribution (and, why would they?) the copyright holder(s) of the sampled work must be paid for the reproduction and distribution of the work.

Typically, what occurs is that as part of the deal that “clears” the sample—i.e. outlines things like the right to create a derivative work—details concerning royalties associated with reproduction and distribution are also addressed.  These are negotiated, and — like the terms for the use of the sample—are determined by what the market will bear, but the normal scenario is that the person using the sample gives up some or all of the mechanical royalties to the writer of the original composition.  Note, that a “synchronization”—the use of a song combined with an image; such as in a movie or TV show—also triggers reproduction and distribution issues, and must be addressed in these deals. In short, if your work is sampled in a song, and that song is used in a movie or TV show, you should get paid when that movie is reproduced/distributed.

The last element to consider with respect to rights/income and samples is public performance. The exclusive right to public performance (both in the composition (the (c)) and the sound recording (the (p)) are exclusive to the writer and the master holder.  As such, when the writer and master holder’s works are publicly performed as part of the song that sampled them (that is, when a song that has a sample in it is played on the radio, streamed online, performed live in front of an audience, or, in any manner, publicly performed) performance royalties are owed.  In all cases, a public performance royalty is owed to the copyright holder of the composition (the (c)), and in the case of non-interactive digital streams (such as internet radio, Pandora, or satellite radio), a public performance royalty is due to the master holder and featured performer. The payments to the the songwriter are made via Performance Rights Organizations, such as ASCAP, BMI, or SESAC.  The payments to the master holder/featured performer are made via SoundExchange.

As you can see, the use of another’s work as part of a new work (a sample) triggers a vast array of rights issues.  While—from the point of view of someone who desires to sample someone else’s work—this may seem extreme, from the other viewpoint—that of someone sampling your work—it should give you assurance that you have both control (via the ability to exclusively control whether or not a derivative of your work can be created) and compensation (via your exclusive rights related to distribution, reproduction, and public performance).

For those who feel that having their work sampled is beneficial from a promotional standpoint, and want to facilitate/encourage the use of their works as samples, they can utilize a Creative Commons license that allows the copyright holder to opt out of certain elements of their copyright bundle. For example, they could allow the creation of derivative works, and/or reproduction/distribution with few (attribution, for example) or no conditions. I suggested in a prior article that perhaps another way forward is to create a compulsory license for samples under a certain length (similar to the compulsory license rules around covers).

Certainly, there can be benefits to having your work sampled, as there can be benefits to sampling the work of others—in terms of revenue and awareness—and songwriters/master holders need to understand them, and, if they choose, attempt to maximize their value.

My hope is that, via this article, both those who desire to sample, and those who have their work sampled see that there is a system in place (however effective/efficient it may or may not be), and that the system is rooted in the same copyright law that governs all elements of the music business. To that end, if you understand this article, you’ve gone a long way in understanding the music business generally.

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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