Music Business Guidelines. Copyright, Contracts and Rates.

[slaphappygarry]

Special Thanks to Bass Guitar Magazine and Lenny_B for the Copyright and Contracts articles.

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[b]AN OVERVIEW OF COPYRIGHT by Leonard Bendel (Lenny_[/b]


The Music Industry is based on the ownership and exploitation of copyrights. In the first of this occasional series, we’ll have a look at the copyrights that are most likely to affect you.

Copyright literally means what it says – it is the right to copy a piece of creative work, whether a musical or literary work, or a recording, film or broadcast. The creator or author of a copyright work has exclusive rights over that work, which he can license or permit others to deal with, such as to copy, reproduce or publicly perform that work. For copyright in a work to exist, it has to be original and must be “recorded, in writing or otherwise”. You can create a song, but until it is notated, transcribed or recorded, there is no copyright protection for it. You don’t have to post yourself by recorded delivery a copy of a tape for it to be protected (a common fallacy) – this just helps in the event of a dispute to prove that you had created that work by a certain date.

A very important point to be aware of is the different copyrights that can exist in a piece of music and to distinguish between “the song” and “the recording”.

In a composition or song there is a copyright in the “musical work” – that is the copyright in the musical element, and a separate copyright in the lyrics as a “literary work”. These are collectively generally known as the “Publishing rights”, as it is these rights that are assigned or licensed to music publishers (more on that next time). The copyrights in music and lyrics are treated as two distinct and separate rights, which can be owned and controlled by two different people. If you and a songwriting partner together write the music AND lyrics in a song (such as Lennon & McCartney) then you are held to be joint authors of both music and lyrics and cannot do anything with the song without permission of the other writer. On the other hand, if you write the music and your partner writes the lyrics (such as Elton John and Bernie Taupin do), then unless you agree to the contrary, you will own the copyright in the music and your partner will own the literary copyright and you can both deal with your copyrights as you wish.

It is very much the norm that in a song the music and lyrics are either weighted equally, with each deemed to be worthy of 50%, or else the melody, lyrics and music are split three ways. These are conventions rather than legal principles though. Songwriting income is mostly generated from record sales and from public performances of the song (from radio and TV airplay). The copyright in a song lasts for a period of seventy years following the year of the death of the author (or last-surviving joint author) – these copyrights are assets that can be inherited by your children and grandchildren. This can be a very valuable income stream, especially when you consider that currently in the UK, the songwriters on an album are entitled to share between them the Mechanical Royalty - this a royalty of 8.5% of the dealer (or wholesale) price of the album. Recording artists generally only get between 15-22% to share between all band members!

These musical and literary copyrights are different from the copyright in a “Sound Recording” - each and every recording of that song will have a separate copyright which is owned by “the Producer” – this is the one who “makes arrangements” for the recording to be made. This is often interpreted as the one who pays for the recording, and will often be the record company. As an artist or performer you will collect royalties from sales and performances of your recording. The copyright in a sound recording lasts for a period of fifty years following the year of release – it then falls into the “public domain” – which means that anyone can then deal with that recording without paying royalties. There is currently a high-profile campaign to extend this to a period of seventy years (as in the US and other countries) or even longer – this is a campaign to pay attention to!

The best way to think of the difference between the copyright in a song and the copyright in a sound recording is that Lennon & McCartney’s publishers will earn royalties every time someone records “Yesterday” (and there are several thousand different versions!), but the remaining Beatles and their record company will only earn money from the Beatles’ version, not from any other.

Many bands choose to share the publishing equally (such as the Red Hot Chilli Peppers or Radiohead), regardless of each member’s contribution to the writing of it. Bands that do this often claim that this helps band spirit, but in cases this has led to resentment from the main songwriter that the others aren’t pulling their weight and are benefiting from his talent! Bands that don’t have this policy will have to agree at the completion of each and every song whom contributed how much and what their share should be. There have been many legal cases arguing over the share of copyright in a song – for example, does contributing a bass line to a song warrant a share of the ownership of a song? A few years ago the members and former members of Spandau Ballet were involved in a large lawsuit on this area. Unfortunately, the answer is always dependant on the circumstances of each band and each song – how integral is the bass line? If someone else covered the song in a different style (such as for a big-band), how important would your bass line be? Is it part of the composition or part of the performance?

As a session player, you're more than likely to be asked in return for your session fee to agree that any copyright in your bass line will belong to the principle songwriter, and that you will not make any claim in the future for a share. This is par for the course, but unless you’re doing the session for free or there are exceptional circumstances, you’re unlikely to be come out with a share of the copyright.

As a songwriter you should contact the PRS (Performing Rights Society), MCPS (Mechanical Copyrights Protection Society) and BACS (British Academy of Composers and Songwriters) and as a performer, you should contact PPL (Phonographic Performance Ltd.) for more information on protecting your rights and collecting income due to you.

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[b]AN OVERVIEW OF MUSIC INDUSTRY CONTRACTS by Leonard Bendel (Lenny_[/b]

As we saw previously, copyright holders have exclusive rights to deal with their musical works and sound recordings. These rights can be exploited by licensing them for a period of time or by selling them. These are all based on; “what rights do you want, how long do you want them for and what will you give me in return?” The answers should always be in a written contract and will be subject to each side’s bargaining power.

Sound recordings and compositions (musical and literary copyrights) can generate income for the copyright holder in several ways. Firstly, from sales of recordings which generate royalties (including “mechanical royalties” as we saw last time), secondly from public performances of those recordings on radio and TV broadcasts (collected through specialist collection societies) and also from fees and royalties generated by licensing the recordings and compositions to (for example) TV programmes, films, adverts, video games and indeed to other record companies for use in compilations. As we saw last time, record companies will usually control the copyrights in sound recordings, and music publishers will usually control the copyrights in the underlying compositions (and will collect the Publishing Income from them). Licensing a recording to films, adverts and computer games will usually require the permission of both record label and publisher – there are blanket agreements in place between TV broadcasters and the collection societies who agree rates for broadcasts.


[b]Recording Agreements[/b]
There are two main types of Recording Agreement. In the more common “Record Deal”, the Record Label will (usually pay for and) own the copyright in the recordings themselves, whereas in a License Deal, the artist creates and owns his recordings and then licenses them to a Record Label for a specific length of time, and to specific territories.

[b]The most common clauses in recording agreements will deal with: [/b]
Exclusivity – will the artist be allowed to record for anyone else? (Record Deals are usually exclusive.)
Term – what will be the length of the Record Deal? Will it be measured by time, or by the fulfilment of a number of recordings, or a mixture of both? Will there be “options” to extend the term? (Very often a “four-Album deal” means the Record Label may release up to four albums, and, depending on the commercial success of the previous albums, they will decide whether or not to exercise that option.)
Territory – what territories or countries will the deal be for? Most Recording Agreements will be for the world, but License Deals can be on a country-by-country basis.
Royalties – Record Labels generally pay artists in one of two ways – either on a “Net Receipts” basis, where the label and artist shares profits from a recording, or else on a “Points” (or Percentage) basis, where the label pays the artist a percentage of the “dealer price” (or wholesale) price of the record, usually somewhere between 15-22%.
Advances – will the Record Label pay any advance? Be aware, that whatever sum of money that a label will pay upfront, they will recoup these before you see any royalties!
Accounting – when will royalties be paid? This is usually every three or six months.

[b]Publishing Agreements[/b]
Publishers deal with compositions rather than recordings, and can offer a variety of services to a songwriter. Firstly, they will collect and administer publishing income (created in the ways I mentioned above), from the UK and overseas. Some publishing deals go no further than that and are commonly referred to as “Administration Agreements”. Some Publishers will also look to actively promote the songwriter and exploit his catalogue – they may seek cover versions, or synchronization licenses (where the song is “synchronized” with a film or TV programme), they may assist with trying to secure the writer a record deal, or provide much needed financial assistance.

Where Publishers are more pro-active, they will often sign the composer to a “Term Agreement” – this means that for an agreed period of time (“the Term”), the composer will write exclusively for the Publisher and assign it the rights in his compositions. Similarly to Record Deals, a Publisher may also pay an advance against future royalties, but would also wish to have options to extend the Term. The same contractual points as set out above for Record Deals would also apply. There is often a “minimum commitment” of number of compositions that the composer must provide within each Term period. The Publishers will generally also seek a “retention period” – this is the length of time after the Term that the Publishers can continue to collect income from the compositions (often between three and twenty years). It used to be the norm that Publishers would seek to control compositions for the life of copyright, but this is thankfully not the case anymore.

Publishers commonly commission between 15-30% of income generated from the compositions. This will vary depending on what type of Publishing Agreement you enter into, how much is paid as an advance, and other factors.

[b]Contracts generally [/b]
With all music industry contracts you are strongly recommended to seek independent legal advice from a lawyer who is experienced in the music industry. Any reputable record label, publishing company or manager will insist that you do take such advice before signing you. Indeed, contracts have in the past been overturned by a judge because legal advice was either not given, or was given by lawyers with no music business experience (as happened to the Stone Roses). However, be warned that not taking legal advice should not be relied on as an excuse to get out of a contract – it can take a great deal of time and money before you or your lawyer will come before a judge who will then decide whether or not the contract is fair. Your copyrights are your assets – before you enter into any contract that will license or let anyone else deal with them, you should know exactly what you’re getting in return, whether this is fair or industry standard, and that if you’re not going to be getting these rights back, that you’re getting an appropriate fee to compensate you.

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[b]Function Rates – A rough Guideline[/b]

There are many factors involved in live rates, so before you start thinking about rates you need to work out what sort of event it is and what the client expects. Remember, anything above the pub circuit is considered a professional outfit and as such, the fee is likely part of the musicians living. Here are some rough Rates:

[u][b]Event Types:[/b][/u]
Corporate Events (£500 - the sky is the limit with these things)
Function/Private Party/Wedding (£500 - £1600)
Pub Gigs (£150 - £400)
Originals Gig (ticket cuts if you are lucky)

[u][b]Factors in pricing a gig:[/b][/u]
[b]Number of band members. [/b]
£1200 looks nice, but split 10 ways, after expenses, isn’t much. Same fee for a 3 piece outfit and its a nice fee.

[b]Expenses. [/b]
Fuel, accommodation, equipment hire etc etc….

[b]Playing times.[/b]
-Corporate. Anything goes. These events generally have BIG budgets so they expect a lot from you. Expect early set ups, long sets and specific
-Function/Private Party/Wedding. Anything from 2x45 minutes to 8-12pm with a couple 20 minute breaks.
-Pub Gigs. Anything from 2x45 minutes to 2x1 hour sets.
-Originals. As long as you can get normally

[b]Distance Traveled[/b]
At the moment the Musicians Union are stating 15p per mile after the first 30 miles. This goes to and from the venue and is on a per musician basis. Again, £100 for a gig sounds nice, but add 5 hours travel time each way and it stops adding up as well.

[b]Equipment Required[/b]
Is it your own? Is it hired? Do the band own it? What does it cost to maintain? This will have to be taken out of the gig fee before the musicians are paid.

For in detailed advice contact the Musicians Union:

[url="http://www.musiciansunion.org.uk/site/cms/...w.asp?chapter=1"]http://www.musiciansunion.org.uk/site/cms/...w.asp?chapter=1[/url]

[The Funk]

Excellent thread. Well done.

[Musky]

If anyone wants a detailed look at management, recording, publishing and producer contracts that goes into typical rates and clauses I suggest they take a look at [url="http://www.leeandthompson.com/documents.php"]this online guide.[/url]

It goes into the sort of detail you'd probably only need if you were about to sign, but at least you'd know what the lawyers were talking about.

Edited to update link.

Edited June 9, 2008 by Musky

[silverfoxnik]

Great thread and some excellent information!

Should anyone here be in a situation where they are involved in a musical project that involves having to sign any kind of deal, IMHO, having a good relationship with a music business lawyer that you trust is really important and can help to both advance and protect your career.

[Lenny B]

[quote name='silverfoxnik' post='28442' date='Jul 7 2007, 10:39 PM']Great thread and some excellent information!

Should anyone here be in a situation where they are involved in a musical project that involves having to sign any kind of deal, IMHO, having a good relationship with a music business lawyer that you trust is really important and can help to both advance and protect your career.[/quote]



Exactly - articles can be really useful to understand how the industry and the various types of agreements work, but a lawyer is essential for making sure that any agreement is appropriate to you, he (she) can forsee any potential difficulties with an agreement that a lay person probably isn't aware of and try and help avoid problems before they arise.

Believe me, it's easier (and cheaper) for a lawyer to help put a deal together than trying to repair one which has gone wrong!

[Toasted]

This is a great sticky.

[alexclaber]

This is great! I'm currently investigating the whole DIY recording and distribution approach - it looks like avenues like CDbaby and iTunes could work quite well and without the traditional industry approach where numerous entities take a cut, prove relatively lucrative. Once this first EP is finished I will get it out there and see what happens!

Alex

[silverfoxnik]

[quote name='alexclaber' post='30045' date='Jul 10 2007, 11:08 PM']This is great! I'm currently investigating the whole DIY recording and distribution approach - it looks like avenues like CDbaby and iTunes could work quite well and without the traditional industry approach where numerous entities take a cut, prove relatively lucrative. Once this first EP is finished I will get it out there and see what happens!

Alex[/quote]

I don't think there's ever been a better time in terms of a DIY approach, for artists who have the wherewithall to produce and release their own music, so good on you Alex for doing just that!

Copyright issues, marketing & promotion, contracts and negotiation all still apply in the 'DIY world' of course, just as they do if you go through the traditional infrastructure of huge record labels etc. But the internet and an audience that actually wants to access and buy music in a totally different way from even 5 years ago, makes the potential and opportunities available to musicians really exciting!

Good luck with it...

Nik

[NJW]

somebody should post up some info on PRS and MCPS membership benefits, and how to join, what you need etc.

[Sibob]

And if anyone wants any kind of contracts looking over, or industry advice etc, then i'd be glad to help.
Its what my degree was, Music Business, and i take care of my band with regards to contracts etc, negotiated a pretty good deal for our Japanese Licensing deal.

Si

[NJW]

i added you on msn in the hope of some advice

[Sibob]

oh really?
No add popped up!

Si

[alexclaber]

Just finishing off the artwork for our first release - what do we need to state on the CD and packaging regarding copyright and so on?

Alex

[Sibob]

[quote name='alexclaber' post='75968' date='Oct 18 2007, 11:45 AM']Just finishing off the artwork for our first release - what do we need to state on the CD and packaging regarding copyright and so on?

Alex[/quote]


A 'C' with a circle around it denotes who owns the copyright to the artwork, a 'P' with a circle denotes who owns the Music
E.G.
Copyright 'C' Alec Claber
Phonographic Copyright 'P' Song/BMG

Obviously you might own the copyright to your recording, depends if you're signed, or if you've licensed the release etc. You'd also mention any publishing copyright as well (who wrote and owns the songs (not the recording..thats different)).

Best thing to do with the rest of the gumpf like "public performance" etc etc, best thing to do is check out another CD and pick the bits that are applicable!

You don't actually NEED the C's and P's, because once you have a tangible product, and you can prove 100% that you created it, you own the copyright, its just a technicality/backup writing it down.

Other things might usually include crediting the producer/engineer etc.
Who it was manufactured by (a lot of CD's are manufactured in Germany cos its cheaper, so often you'll see BIEM mentioned on the CD.....go on...go check lol).

Umm, think thats about it, hope that helps
Check back if you need anything else

Si

Edited October 29, 2007 by Sibob

[Gridlad]

Can anyone offer advice about working out your own tax and N.I etc and how to go about paying all of this?

[slaphappygarry]

Go self employed.

Get a business adviser (the Business Gateway are pretty good for this).

Enroll on one of their FREE courses.

Job done.

G

[crez5150]

I don't agree at all with the rates for gigs..... what are we stuck in the 90's

[lowdown]

[quote name='crez5150' post='329418' date='Nov 14 2008, 09:29 PM']I don't agree at all with the rates for gigs..... what are we stuck in the 90's[/quote]


More like the 80's

Garry

[joe_bass]

Great thread, answered a few of my questions.

But just to clarify on the bit regarding writing bass lines...

The bassist (assuming they wrote the bass lines) is more likely to be able to take a share of the copyright the more his/her lines contribute/are important to the song. But isn't that largely opinion?

[Sibob]

I think the case is that any publishing or 'points' given to a bass player for writing their own bass part is down to the discretion of the producer/writer of the tune!
I believe that from a legal stand-point, a song is consisted of 'Chords' and 'Melody'. Like you said, if a bassist creates a bass part that is to become an important part of the melody or chord structure, than you will obviously have more of a case for writing credit than simply performing a root-five line.

Si

Edited May 19, 2009 by Sibob

[Lenny B]

This ties in rather nicely with the third article I wrote for BGM (published in the punk issue a while ago, re-produced below by presumed kind permission of BGM);

SESSION MUSICIAN ARTICLE

First of all, this article is not about how to become a session musician or what you can expect from being one – there are others far better qualified than I to write about that. What this article is about is some of the main points that should be borne in mind when hiring or performing as a session musician.

Is there an agreement?
There should always be a written agreement – a contract does not need to be in writing to be enforceable (although this is greatly preferred) – a valid contract can arise through verbal agreement or through a course of conduct (such as regular work on the same terms).

If there’s no written agreement, then it becomes very difficult in the event of a dispute to evidence what was agreed, so the best advice is to get it in writing. If you are a member of the Musicians’ Union (www.musiciansunion.org.uk), they have a template session musician agreement that has been negotiated with the BPI (www.bpi.co.uk). However, many musicians these days are not MU members, and many record labels are not BPI members, so there is a great deal of room for variation.


How much and when?
One of the first things to be agreed will be your fee – will the session be for cash, for a royalty/income share or for a mixture of both? Most labels or producers would rather you get a one-off payment with no on-going liabilities, but releasing a record can be expensive, and smaller labels especially may rather pay you little or nothing now, but with the potential of a continuing royalty should the release be successful.

Many session musicians would rather have cash in the hand rather than a potential larger sum in the future, and you may have little or no say at this stage on how future royalties may be calculated and paid to you by the label.

A further point for consideration is whether you’ll require cash on the day or will you be happy to invoice and wait for your money? You should agree this before the session and before you incur any expenses.


Copyright
We’ve previously looked at the difference between copyrights in a song (‘the Publishing Rights’) and the copyrights in a recording of that song (‘the Recording Rights’). We’ll now look at these rights first in the context of a session.

As I’ve written previously, the first owner of copyright in a Recording is the ‘Producer’, who legally is the one who ‘makes arrangements’ for the recording (and is usually understood to be the one paying!), rather than the person in charge of recording the session. In order to release, license or otherwise deal with the Recording unencumbered, the Producer should have from all session musicians confirmation (in writing) that they have no rights in or over the Recordings. This is usually pretty clear – it will be an uncommon situation for a session musician to have any such rights.

Would the session musician have any Publishing Rights based on their contribution to the song? There is a three-stage test;

1. Does the session agreement deal with this? If the agreement states that the session musician waives any interest he may have in the composition or publishing (in return for his fee), then that is generally the end of the matter. If both parties to a contract have agreed this, it will be very difficult for the musician to later claim any such rights.

2. Does the musician play (or re-play) a line which the artist or producer has shown him or asked him to play? If so, then he will not have any rights in the composition as he has not come up with anything original.

3. Has the musician come up with a line in which he made a ‘significant and original contribution as a joint author to a copyright musical work’? If so, then he may be entitled to a share of the Publishing Rights.

In a dispute, questions 1 and 2 above are questions of fact (to be determined by evidence, such as witness statements and cross-examination), whereas question 3 is a matter of opinion. Musicologists will often be called to explain to the judge why the contribution is or isn’t significant enough to be awarded a share of the copyright. Unfortunately, there are no real guidelines as what constitutes ‘a significant and original contribution’, and it will generally be decided on the particular facts of that case, the quality of the evidence and ultimately the judge’s opinion.

In both the fairly recent ‘Bluebells / Young At Heart’ case and the more recent ‘Procol Harum / A Whiter Shade of Pale’ case, it was found that the session musician’s * contribution was significant and original enough for them to be awarded a share of the composition years after the recording session – in the case of A Whiter Shade of Pale, 39 years after! However, the judge awarded for royalties to be paid going forward – there will be no payment for past years before a claim was made. Also, permission has been granted for an appeal in the ‘Whiter Shade of Pale’ case, so this may not be the final word on that matter…

PPL and Performance Rights
As well as the copyright in a recording, musicians have rights in their performances which the Producer or label must clear to allow the performances in the recordings to be reproduced or exploited. This should also be clear in any agreement. The organisation PPL (www.ppluk.com) collects licensing money from broadcasters, shops, restaurants and clubs and distributes this to record labels and musicians – including session musicians. This is not a royalty for sales of a recording, it is income generated by the public performance of recordings. Both you and the label need to be members of PPL to receive this income.

Credit
Under fairly recent legislation, performers on a recording now have a right to be credited or identified as a performer. This right can be waived, but if there isn’t a good reasons for you to do so (such as your embarrassment at the quality of the recording, or the label asks you to waive it as it doesn’t want the ‘real’ bass player to know he’s been replaced) I suggest you fight for your credit. If however you are to waive it, make sure you’re properly recompensed for doing so. If people don’t know you’re the bass player, it will be hard for you to get the next session…

* Matthew Fisher - the organist in Procol Harum – was a band member, not a session musician, but as he was un-credited as a writer, this situation makes a good example for this article.

[Sibob]

Great article mate!

Cheers for that!
Si