This week In the Hot Seat: Authors Todd Brabec, and Jeff Brabec.
Twins Todd and Jeff Brabec are influential co-authors of the music industry’s essential legal guide, “Music Money And Success: The Insider’s Guide to Making Money in the Music Business” (Schirmer Trade Books), now its 8th edition.
The Brabecs, both graduates of the New York University School of Law, and both based in Los Angeles, are two of the brightest stars within the music publishing world which—no longer a business of pennies and nickels–is on a roll in this digital era.
Following graduation in 1971, the pair applied for jobs at the American Society of Composers, Authors and Publishers (ASCAP) in New York.
Todd remained with ASCAP for 37 years as executive VP and worldwide director of membership; constantly courting and corralling talent, including bringing in James Taylor, Marvin Gaye, Metallica, Green Day, Smokey Robinson, Joni Mitchell, Neil Young, Randy Newman, Journey, Earth, Wind & Fire, Jeff Lynne and Tom Petty; as well as bringing such TV and film composers as James Horner, Hans Zimmer, and James Newton Howard into the fold.
In addition, Todd overhauled many of ASCAP’s distribution, payment and survey rules, and systems until returning to his own law practice.
When Jeff departed ASCAP after two years, he went on to leading executive jobs at the PolyGram Music Group, The Welk Music Group, Arista-Interworld Music Group, and eventually landed at Chrysalis Music Group which he called home for 18 years.
After Chrysalis was acquired in 2011 by BMG Rights Management, a joint venture between Bertelsmann and private equity firm Kohlberg Kravis Robert, Jeff went on to become VP of Business & Legal Affairs for BMG Rights Management, which includes the catalogs of David Bowie, Blondie, Billy Idol, Kurt Cobain, Bruno Mars, John Legend, Roger Waters, ZZ Top, OutKast, Devo, Paul Anka, Steve Perry, Dan Wilson, Jethro Tull, Hal David, Jessie Reyez, Karl Wolf, and Lindsay Ell.
At BMG Rights Management, Jeff oversees acquisitions of music publishing companies, catalogs, individual songs, writer royalties, co-publishing, administration, and sub-publishing deals.
There have been so many changes to the music industry since you two launched “Music Money and Success” in 1994; and even since the 7th edition in 2011. With the digital age, the music industry was turned upside down. How many pages did you add to the 8th edition?
Todd: We added 100 additional pages. First of all, we revised every chapter, and then we added 100 additional pages, plus all of the licenses at the end of the book are new. So people do have forms now that they can use which are very contemporary forms. They cover almost everything. It’s a lot of pages (656) though.
Has the market for the book remained music publishers, songwriters, artists, label staff, entertainment lawyers, and educators?
Jeff: Totally. This is a business book. For anyone involved in the business aspects of either publishing or recording then this book is for them; whether they are sophisticated or unsophisticated. We tried to write in a way that explains things, with examples. A number of the chapters start off with phone conversations, just to give people a feel as far as what might happen if a TV (music supervisor) or a motion picture company calls them; or if they are negotiating a record deal. So it’s for all of those parties. We tried to write something that everyone can value, even the most unsophisticated person. That’s why we throw in a lot of examples.
Prior to Donald Passman’s “All You Need To Know About The Music Business” (1991), and your own “Music Money and Success” (1994) the only available books on the music industry were Diane Sward Rapaport’s “How to Make and Sell Your Own Recording,” published in 1979; and the rather daunting “This Business of Music” (Billboard Books, first published in 1985) which would put all but lawyers to sleep.
Todd: Everybody had it. Nobody read it.
Your earliest goal was to simplify information about the music industry, but since you have further refined the book’s text in order to match present-day factors. I’ve seen the book recommended 7 or 8 times in the past week via social media, if only because you two are doing interviews promoting it. Still, years ago, there wasn’t quite the same amount of word-of-mouth. Today, social media is driving interest while there’s also greater interest in knowing more about music-related business matters.
Jeff: More people are interested in the business side. So, just for survival purposes, you have to know the structure of all these deals. But I think also that people are realizing that this is a business, and if they want to be in the business they’d better know how it works.
Todd: People also want to share these things. If somebody reads the book and sees a section, say on TV licensing for a show, they want to share it with their friends, “This is great. Let me pass it onto other people.” They used to do that by word-of-mouth. These days, we have social media where they cover an awful lot of different ground to a lot of different individuals. Everybody is starting to understand this business is complex and has changed dramatically even over the past 5 or 6 years. So people better have a clue of how some of this stuff works or they are not going to make it, and they are definitely not going to be able to monetize what they have created. The opportunities today are so open to everybody which was not the case many years ago. It was pretty limited. If you didn’t have a record deal, it was very difficult for you to make money out of this business unless you were going to play around small clubs all of the time. It has changed a lot.
One thing that struck me while reading through this book was that most people purchasing it will probably never get a recording deal of any type.
Jeff: Yes which is why we designed the book to show licensing on the song side because that is where they are really going to make their money. Also, a DIY artist is probably going to own his or her own masters so the record and the licensing sides are the most important things for them to know. Licensing is the name of the game right now.
Todd: It is important for everybody out there these days to note the parameters of what deal structures look like of all these types of new (distribution and delivery) outlets or outlets that are available to anybody. Broadway theatre or TV uses, motion picture uses, all sorts of consumer products, they all have different deal and license structures. You can be the biggest professional in the world or the newest novice, and having something that starts blowing up on YouTube, you’ve got to know all of the other opportunities, and you’ve got to know how to face them, and make the most out of them to monetize the use of them these days. That is really what we are doing with this (book).
Someone purchasing this edition might also not even be seeking a label deal. They, however, do need information to make business decisions on how to control and work with their masters, and their music compositions as their career evolves. The choices for music use today are broader than ever.
Todd: Yes. Anybody can be a recording artist right now. You are right Larry. We wrote the book because, you are right, they are not going to get a record deal, and the hope is that they will get an indie deal, but even then they may not. They are going to be the record company themselves in many respects, and they have to know what to do, and how to react when that request comes in from a TV producer, from a film producer, from a video game producer etc. They just can’t be sitting there hesitating, and not knowing what they are doing because they are now not only in the business of songwriting, but they are in the business of being a record company as well, for those who can’t get a record deal, or don’t want one.
Most artists with successful careers have horror stories from when they started out. Practically everybody has been tarnished by bad deals. If books like this can save some of them……
Todd: Everybody makes mistakes no matter how sophisticated, and knowledgeable they are or how stupid they are. It’s part of the business, unfortunately. Jeff and I, hopefully, can prevent people from making a lot of mistakes or recognize their mistakes after they have made them, and learn from them. Those are really the two main things that this book was written for. Jeff, am I right?
Jeff: Definitely, that even while they are making a mistake or a bad decision, at least they know that they are doing it. That they are not surprised. A lot of decisions have to be made, especially at the inception of a career, and they may have to do things that they don’t want to–sign certain things—but, as long as they know what it means. That’s the whole point behind our book. It’s educational.
Jeff, your work at different sized music publishers surely must give you an overview of the varying levels of music publishing experiences to bring to the book.
Jeff: Yeah, I have been very lucky because I have been with the smaller independents; I have been with the large conglomerates; and the medium independents with a lot of money to spend etc. I have seen both sides of the equation; whether with large companies, and the smaller companies; the companies with lots of money to spend; and companies that have to be fairly cognizant of the spending and expenditures every year for advances and acquisitions. I definitely have gotten an overview of the publishing business because of that. I feel very, very fortunate.
Todd, I thought I knew the music business well from reading your previous editions, but in reading this new edition I was struck by all the new music uses that weren’t available even a few years ago. Basic copyright hasn’t really changed; the role of a music publisher. What has changed is the emergence of varied online music outlets, the different digital uses of music, and the demand for greater mobile music experiences. Consumer choice has been revolutionized as music-based experiences have become more effectively delivered in an assortment of connected ways. The Internet brought about so much change in how we deliver and enjoy music did it not?
Todd: Oh yeah. Years ago, the online digital Internet or whatever you want to call it, they were separate categories really in peoples’ minds. They were a minor part of it (music delivery). People knew that it was going to be big but really couldn’t figure it out. All of these separate licenses, separate contracts, and discussions regarding digital. These days digital is part of every mainstream or traditional type of media contract. It is incorporated into everything. That has been one of the major changes; let alone the new distribution platforms that have occurred because of this digital era, particularly in the audiovisual area with Netflix, Amazon, and Hulu. AT&T is coming in, and Disney. All of these audiovisual streaming services; let alone the streaming services, Amazon, Apple, Spotify, and Pandora. All of them are new to the equation. But really they are doing exactly what traditional media always did but in a very different form.
With your first edition in 1994 what most people went to your book for was information on recording deals, and for some background on music publishing. With dwindling recording income, and with fewer chances of being signed by labels, music publishing is now front and center.
Jeff: The great thing about publishing is that you are not tied to one master recording as you are with a record company. Let’s take Warner Bros. It has the master to “My Way” by Frank Sinatra (a song popularized in 1969 that was originally written by Claude François, Jacques Revaux, and Giles Thibaut with new lyrics by Paul Anka). So they are tied in with that master. We are lucky because we represent the song, “My Way.” We can license it to any number of recording artists. We can license it for background music in a TV show or a motion picture. We can license a new recording for a theme to a TV show. We can put it in a karaoke machine etc. etc. We have the lyrics so we can do lyric reprints on let say a soda can. We have such a wide range of opportunities.
At the same time, in terms of performance rights, sound recording rights are they not a lot clearer than music composition rights?
Jeff: That’s not really true because what for the musical composition, the song sort of speak, anytime that song is performed in any type of context, the payments are being made to the publisher and the writer. It could be for a background service, television, a streaming service, a live performance or it could be a digital jukebox; whereas the sound recording is limited in the United States at least to SoundExchange (the digital performance rights organization), meaning it’s only the limited right of the performance license. It applies only to the digital area…
Conditions are a lot clearer is what I meant.
Todd: Yes, but it’s very narrow. So it’s a lot clearer than it was before because there was no such thing as a performance right for the sound recording. Now there is and it’s growing each year through SoundExchange, and a lot of the majors are doing direct deals with these services, bypassing the statutory scheme. So it’s an interesting area. But on the song side, practically anybody who uses a composition or performs it, has to get a license which is not the case with a recording.
(The 1995 passage of the Digital Performance Right in Sound Recording Act (DPRSRA) provided for a limited right when sound recordings are publicly performed “by means of a digital audio transmission.” The 1998 Digital Millennium Copyright Act (DMCA) included webcasting as a category of performance applicable to this limited performance right. This new right applied specifically to satellite radio Internet radio, and cable television music channels. Broadcast radio continued to be exempt.
It is important to note that the statutory license applies only to noninteractive services. The right to perform copyrighted sound recordings for on-demand services, i.e., interactive services, remains with the copyright owner, normally the label, and is a negotiated agreement between the label and the music user. These deals have taken many forms, including percentage of gross or net revenue formulas, per performance rates, an equity stake in the business, or a combination of these and other elements.)
In the United States, there are 5 major sound recording licensing categories, each of which is subject to separate rate proceedings. The categories are: webcasting, satellite radio, preexisting music services, other cable and satellite music providers, and business establishments. Anyone controlling their own masters should understand these uses.
Jeff: The great thing about that in the United States is that there are rates set by the Copyright Royalty Board for streaming, downloading, webcasting, satellite radio, mechanical rate, and they all go through to 2022. So you got an extended period of time where you actually know the rates now for all of these new types of distribution methods.
It used to be limited to non-interactive services. Does it apply to everything now?
Jeff: No it’s not everything.
Todd: It’s interactive streaming. Remember that SoundExchange only covered non-interactive streaming. The right applies to all types of streaming interactive and non-interactive. With the sound recording, the labels are negotiating the interactive streaming, and the downloads stuff has already been set and interactive streaming has been set by the Copyright Royalty Board in the U.S. all of the way through to 2022. So it’s a good time. You know what the rates are.
There was no copyright protection for sound recordings pre 1972. Prior to 1972, no federal copyright protection existed for sound recordings. Congress then extended copyright to any recordings that were fixed on or after February 15, 1972.
Todd: It was common law copyright. There was no scheduled copyright.
Individual states have copyright laws on the books.
Todd: Yes, there was definitely state protections for pre-1972 recordings.
California still has ownership protection until 2047?
Todd: Correct, that’s under California state law but the problem with state laws is that they are different between the states, and they are limited by a lot of different factors. New York and Florida statutes are very different from California. So all of this hopefully has been resolved now where there is federal copyright protection now on the performance side at least. So it’s a much better situation today that it was say, a year ago.
There are so many more opportunities available on music publishing side that were not there when you wrote the first book back in 1994.
Todd: Yes. There are so many more opportunities and distribution methods for publishing. That is why the core of the book is really designed for songwriters and composers and music publishers because that’s really where so much of the money is right now, and where so many of the opportunities are. So yes, the focus is primarily on musical composition, and scores right now.
Musicians, particularly those in bands, don’t generally realize that even at a beginner level that they are engaged in a business relationship. They usually wait too long to work that out. Once they start writing songs, they should set up as a business. Many fail to understand that while they are musicians and songwriters, they are also small business people.
Jeff: The whole question of who wrote the song? That comes up constantly. What if you are just the guitar player in a band, and there’s one main writer, but you did a good guitar lick? With all of that, there has to be some kind of legal document between people, and they don’t realize it usually until it’s too late or when they go and see a lawyer and sometimes it’s too late at that point in time.
Drummer Levon Helm of the Band long argued that songwriting was a collaborative effort. With the group, a song was brought in mostly by guitarist Robbie Robertson, and the group would together piece it together as a finished track. Robbie, like many others, characteristically maintains that songwriting credit should be given to the person who wrote the lyrics, and the melody. Anything else should be regarded as an arrangement. Levon held a grudge against Robbie over songwriting credits to his death in 2012.
Todd: Many times the issue comes up when royalties start coming in for the main songwriter. The band says, “What’s going on here? This person is making $100,000, and we still owe money on our record deal.” Jeff and I always say, “If you are in a studio doing a recording, you better get a clearance from everybody there because the issue who contributed what is bound to come up. It is an important issue these days. It’s becoming even more so with the money being generated by a successful song.
I’m sure you’ve heard the popular Nashville saying, “In for a bit, in for a split.” The rule being whoever is in the room contributing gets an equal split of song. Often even the tiniest of a contribution can be key to a hit. Reportedly Warren Zevon and LeRoy Marinell had written much of “Werewolves Of London” when guitarist Waddy Wachtel turned up and suggested “Ah-hooo, werewolves of London, Ah-hooo, Ah-hooo, werewolves of London, Ah-hooo.”
Todd: Sometimes a good title is worth a songwriting credit. I have seen that a lot. Then there are certain writers that are brought in just to finish a song, but their deals are structured. There is a legal document. If a song is 95% complete, but if you have writers coming in just to put that final touch on, and it’s without a writing (document), everybody shares equally. That is why people have to be very careful.
Conversely, there are times where a songwriter is brought in to work with a young artist who isn’t a proficient songwriter; and while the hired songwriter writes most of the song they only allowed a minority or an even split. That’s quite common.
How do you protect yourself in these types of collaborative situations?
Todd: Well that’s a tough one because some producers are legitimate writers, and they contribute significantly to the song. With others, you have cut-ins just based on who they are. An artist (with clout) can take a piece of the song or part of the publishing. That is, I suppose, a personal business decision as to how you allocate royalties on a composition. There are certain songs, theme songs on TV where I know for a fact that there are cut-ins, but that’s the way the business worked for many, many years. Jeff and I don’t agree with that position. There is a way to allocate royalties, sometimes just as a participation agreement, rather than an actual copyright.
Jeff: It is very uncomfortable for a lot of people to go to a co-writer, and hammer out something; have someone sign an agreement, an allocation agreement. Many people are uncomfortable with that concept. But it is essential. That is what will prevent any type of lawsuit
When a rap producer is putting together a track, then working with several rappers, it will come down to who did what. What is the publishing, and recording split? It can get complicated if the producer says, “That’s my track, I should have the majority share of the song.” If that’s the deal, there needs to be a paper trail. Unless there something in writing that denotes a specific split, then the court is going to divide the copyright equally.
Todd: Yeah, without a writing (agreement) under the copyright law everybody shares equally. That is why they need a piece of paper, a legal document.
If a person wrote all of the music could that not be considered differently, like a 50% share.
Jeff: Not necessarily. If they consider it a joint work with all people contributing…
Todd: Normally, the music ought to be 50%, and the lyric writers get 50%. But if it’s a joint work then everybody shares equally. That’s the type of understanding that has to be understood right up front.
I’ve seen songwriters argue about how many lyric lines they wrote or argue about who added what.
Jeff: They might be in for a share, but at what percentage?
One of the biggest contributing factors in bands breaking up is the allocation of songwriting and publishing revenues. The question becomes does the group members share all revenues or do the band’s songwriters retain their shares separately? So many bands have broken up over squabbles over the music publishing revenues or because some members couldn’t get songs on the group’s albums.
Todd: I agree because you look at certain groups like the Doors where everybody shared everything, recording and the publishing assets. That is an easy situation. Everybody is agreeable to everybody shares equally. A lot of groups have that but then you have Lennon & McCartney in the Beatles, and that was separated.
As well, musicians owning their own publishing have to be active because as an artist and as a songwriter, the recording and the publishing parts of their career go together.
So many artists and songwriters, even veterans, remain confused over music publishing. Why is that?
Jeff: One of the things that you said earlier was that for so many years all that people concentrated on was the record deal, and the publishing nobody really thought about that. They always considered it a business of pennies. In the early days, it was the business of pennies. Sheet music or mechanical royalties, that two cents going up to nine cents. So people had the wrong impression of that business. You look at publishing these days there are so many opportunities out there to make money; let alone sync licensing is a huge amount of money, what you get.
Also, the performance side with ASCAP, BMI, SESAC, and GMR (Global Music Rights founded in 2013 by industry veteran Irving Azoff as an alternative to the traditional performance rights model) in the United States, and SOCAN in Canada, GEMA in Germany, PRS in England, APRAS in Australia and New Zealand. The amount of money that you can make on the performance side, as a publisher, and as a writer, is extraordinary. A #1 song can generate $1 million in publisher income, and an equal amount going to the writer these days. So the monetary aspects are just becoming known, particularly since people can’t get record deals, and they are trying to figure out, “How do I make money in this business?” And I’ll say, “It’s in the publishing side. All aspects.
The foreign marketplace brings in $1.5 billion annually to American publishers and songwriters. That’s impressive.
Todd: And that’s just the performance side. The ASCAP, BMI, SESAC, GMR side. If you think about everything else that is going on with sub-publishers collecting for all other uses outside of the United States, the amount of money is huge. Most people, with the exception of publishers, don’t know anything about it. They don’t know the collection societies outside of the U.S. or how they work, what figures that they take off the top; the social or cultural deductions. It is a whole different world out there which for many people is just as important as to what is happening in the United States.
Jeff: Unfortunately, a lot of people in the United States are very myopic about this business. They keep thinking that it is U.S. centric. The U.S. market is the most valuable monetary market as a country, but there are many songs where half or more than half of the income comes from overseas. So, it is just an enormous marketplace. You have to look at this globally. You can’t look at it as a U.S. centric situation. And you better know the rules as Todd said or you better have somebody over there (overseas) who knows the rules in various countries.
Todd: Larry, people have traditionally looked at music publishing as a behind-the-scenes business, and most people were not that interested in going behind-the-scenes to see how you really make money.
You are right that music publishing was once regarded as a behind-the-scenes business, but music being consumed via streaming; rather than being purchased, has brought about profound industry shifts including to the management of rights, and to the full extent of the value of music
Todd: It’s out in the forefront now. Publishers have taken on a new role.
Several American-based music publishers have taken a much more hands on role in negotiating rights in contrast to traditional collective bargaining. Does direct negotiating by these music publishers and others not weaken the collective bargaining process?
Todd: One thing with the GMR, the Irving Azoff thing, they use PRS to do all of their foreign collections. They are not working outside the PRO structure outside of the United States. One of the things I added this time around is that I went into PRS in the UK, SOCAN in Canada, SACEM in France, and APRA in Australia in the book and I explained their payment rules for the first time so people, at least, can get a feel for what’s out there because, as we talked about it, if you are successful in the United States, you can easily make more money outside of the U.S. than you can you do here. It’s such an interesting marketplace, and people just don’t understand it. But the major publishers have set up special vehicles–they call them–that are dealing with the digital world in Europe, but they are choosing a particular society to license all their works throughout Europe. So they haven’t abandoned the society concept. They are working in conjunction with them but not, let’s say with 27 societies. They are working with one to cover all of Europe for them for the online world. The physical world is still being handled country by country but there are changes that I’ve just gone through on the online digital side.
Under the 1976 U.S. Copyright Act, the author of a recording has the right to terminate the original transfer of copyright to the record company 35 years after that transfer. But “author” isn’t defined in the Act. The last time that we spoke there were artists starting to try to reclaim their masters but there was a debate over what is the “author.” Is that dispute still continuing?
Jeff: Yes, that debate is still continuing who an “author” is. It really hasn’t been…
At some point, a court will have to define the word “author” in this context unless there is legislation enacted by Congress defining the same. Why hasn’t there been a court action? My guess is that when the record company says, “We are not going to give it back,” that is when someone will file a lawsuit, and there is a settlement. Major labels tend to avoid court as much as possible.
Jeff: Well, there’s contractual reversion, and there’s negotiated reversion as well. What’s happening right now in many of these cases where termination notices have been sent into record companies is that there have been negotiations that have resolved the issues between the parties in any number of ways. Most of these things so far have resulted in negotiated settlements, basically a sharing of rights or additional money etc.
Todd: But the song side is the same, Jeff?
Jeff: Right. The song side hasn’t changed
Sony Music Entertainment and Universal Music Group are now facing a class action lawsuit for copyright infringement filed on February 5, 2019, by David Johansen, John Waite, Southside Johnny, the Nerves’ Paul Collins, and Joe Ely.
The class action suit alleges that hundreds of musicians have filed Notices of Termination to both labels, who have “routinely and systematically refused to honor them.” They are seeking damages for copyright infringement, and declaratory relief.
Jeff: It’s interesting about the cases that they have been filed, they are trying to turn them into class action suits. So you would not have just individual, a set plaintiff, there would be a set plaintiff representing all of the plaintiffs in the entire class. That is the intent of the filing that just occurred.
(Meanwhile, Kanye West has filed a pair of lawsuits in an attempt to end his publishing and label contracts. One is against EMI Music Publishing, now owned by Sony/ATV; and the other is against the Universal Music Group companies’ Roc-a-Fella Records, Def Jam Records, and UMG’s merchandising arm, Bravado.)
Let’s turn to The Sen. Orrin G. Hatch Music Modernization Act which rewrote Section 115 of the U.S. Copyright Act to create a single licensing entity that will oversee the administration of mechanical reproduction rights for all digital uses of music, such as interactive streaming offered by Apple, Spotify, Amazon, Pandora, Google and others. It also repealed Section 114(i) and, consistent with most federal litigation, utilizes random assignment of judges to decide ASCAP and BMI rate-setting cases.
Much of the credit for the passing of the Sen. Orrin G. Hatch Music Modernization Act in October 2018 goes to National Music Publishers’ president/CEO David Israelite.
Jeff: I must compliment the NMPA, the Nashville Songwriters Association, and SONA (Songwriters of North America) for really pushing that forward. It was a really combined effort. David has been the spokesperson, and he’s done it very well, but he’s always said that it’s NMPA, the publishers, and the songwriters together was the only way that this act was going to get passed, and has been passed.
For the modern U.S. Senate to unanimously pass a 185-page bill is a herculean feat.
Jeff: It was a very complicated legislative process. It was much more complicated than most people will ever know.
Now on tap is the establishment of a mechanical licensing collective in order to solve problems that may come up. The submission, which needs to be filed by March 21st, will create the collective required by the Music Modernization Act to license and administer mechanical rights. The Register of Copyrights will designate the Mechanical Licensing Collective (MLC) from submitted applications based on an entity proving itself able to achieve the goals of the MLC, as well as meeting all the legal requirements as stipulated in the Music Modernization Act.
The National Music Publishers’ Association, the Nashville Songwriters Association International and the Songwriters of North America unveiled the board members and endorsements for their Mechanical Licensing Collective submission to the U.S. Copyright Office. Also submitting will be the new mechanical licensing agency, the American Mechanical License Collective.
(The American Mechanical License Collective was co-founded by ex-Police drummer Stewart Copeland, songwriter Rick Carnes, John Barker (president/CEO of ClearBox Rights), Brownlee Ferguson (founder, Bluewater Music), George Howard (co-founder of both Music Audience Exchange & TuneCore, & CIO of Riptide Publishing), Lisa Klein Moberly (president of Optic Noise), Benji Rogers (founder of PledgeMusic, and co-founder of dotBlockchain Media), Jeff Price (founder of Audiam, and co-founder of TuneCore), Henry Gradstein (Gradstein & Marzano, P.C.), Larry Mestel (CEO, Primary Wave Music), and Ricardo Ordoñez (president of Union Music Group).
Interestingly, The National Music Publishers’ Association/Nashville Songwriters Association International/ Songwriters of North America submission indicates a Board of Directors; an Unclaimed Royalties Oversight Committee; a Dispute Resolution Committee; an Operations Advisory Committee. Among those included are songwriters Kara DioGuardi, Oak Felder, Kevin Kadish Tim Nichols, busbee, Kay Hanley, David Lowery, Dan Navarro, Tom Shapiro, Aimée Allen, Odie Blackmon, Gary Burr, David Hodges, and Jennifer Schott.
Jeff, you have been tapped as a board director. I understand that the committee selections were chosen by separate publisher and songwriter advisory groups.
Jeff: The whole point was to have an effort that represented both the songwriter community, the creators; and the music publishing community, more of the business aspect of the community. That is why I think that this is going to succeed. You’ve got separate voices, but we are all trying to do the same thing. We want this to work. I think that it’s going to be very successful, personally.
There’s certainly a good cross section of music publishers.
Jeff: I must say that they really looked at people who were qualified for certain types of committees. I really have to hand it to them. But yes there are a lot of people there, a lot of voices but they are all basically going in one direction. We just want this thing to work.
Todd: One thing is that there is a step that is going to be interesting because you have up to March 7th (2019) for appeal. Apple has said that they will not appeal…
Jeff: You’re are talking about the CRB (Copyright Royalty Board) rates now (including the nearly 44% rise in streaming mechanical rates over the next 5 years in the U.S.)?
Todd: Yes, the CRB rates, of course.
The chapter I found most fascinating in your book is “Music, Money, and Broadway” which breaks down the expenses involved with mounting and running a Broadway show. “Hamilton,” which started in a public theatre, making its Off-Broadway debut at The Public Theater in February 2015, apparently returned a quarter of its $12.5 million development cost within just 5 weeks of its opening being supported by the producers’ profit-sharing plan for keeping overall costs down. Will the profit-sharing strategy become more common with theatrical productions when start-up costs for a Broadway show can run to $25 million or more and most shows fail?
Todd: Yes, and that is a trend because what just happened in New York with the union SAG-AFTRA (Screen Actors Guild-American Federation of Television and Radio Artists representing approximately 160,000 film and television actors, journalists, radio personalities, recording artists, singers, voice actors, and other media professionals worldwide), they just made their first deal which is part of the contract now with lab productions; meaning the type of productions when producers are trying to get people (investors) interested in a show.
The original people working in those early productions now will get a piece of the profits, of the weekly profits of the show. So that is new. With “Hamilton” there are so many different people that are sharing in that weekly income. It is more than I have ever seen. Normally, we look at the limited people, the composer, the lyricist, and the book writer, and primary (investors) but now they’ve expanded this into multiple individuals, all of whom have some kind of intellectual property interest in the show. It is a trend, but you are right you have 75% to 80% of all show, particularly musicals fail and never recoup and the shows running between $15 million and $25 million to put on so you have a huge outlay of money with no guarantee of any return let alone getting your money back. It’s an interesting addition to the whole mix.
Jeff: The odd thing is that Broadway dollars are going up. I’m not saying that their attendance is going up—it went up a little bit—but the dollars, the income is just phenomenal. Broadway musicals are still a draw to people. Both to tourists and to New Yorker alike. It is just really interesting.
You still can’t easily get tickets to “Hamilton” on Broadway.
Jeff: I know. I know.
Is the profit-sharing for “Hamilton” a precedent because I’ve haven’t heard of that being done previously?
Jeff: That was definitely a new concept. That’s for sure.
Todd: Basically, you had two formulas. You had the Dramatists’ Guild of America’s concept formula which has specific people sharing based on that contract or you had royalty pools where people like the composer or the conductor or the librettist, the director, and the choreographer all shared in a certain percentage of the weekly profit, and a major actor would also be thrown in there. Now it’s being opened up to many individuals who were there at the start when the show was getting going. It’s an interesting concept. We will see how far this thing goes. Again the investors are the primary people because they are putting the monies in, and they are, I’m sure, not terribly thrilled about additional parties taking money out of the recoupment factor.
Jeff: One thing that has been a constant always is that the La Jolla Playhouse etc. where the original production started. They have always had a small percentage of the profit just because they were the first theatrical organization or venue for a lot of these shows
A copyright battle over Led Zeppelin’s “Stairway to Heaven” is back on after judges from Ninth Circuit Court of Appeals partially vacated the trial court’s judgement in favor of the band, and remanded the case for a new trial. Judges ruled that the previous judge provided “erroneous jury instruction” in its first trial for copyright infringement.
(The lawsuit was brought by Michael Skidmore, the Trustee for deceased songwriter Randy Wolfe (aka Randy California), who composed Spirit’s “Taurus” in the late 1960s. The complaint claimed Led Zeppelin knowingly stole the song’s introduction though the progression was argued to be generic and ultimately non-copyrightable. In the original case, a District Court judge had claimed copyright law doesn’t protect “chromatic scales, arpeggios, or short sequences of three notes.”)
Jeff: Yeah, it’s going back for a retrial right now. The amount of legal spending expended has just been outrageous.
What would be the ramifications if it was seen as infringing on the copyright? Both the RIAA, and the NMPA have warned the ruling could potentially allow more infringement claims which I agree might happen.
Jeff: I can’t really comment on this specifically, but yeah I can’t agree with you more that there are going to be more and more lawsuits because of this.
Obviously, intellectual property must be protected, but there are basic musical elements or artistic expression that have long been seen as unprotectable.
Jeff: Certainly, unique elements are definitely protected.
Todd: That’s why in infringement cases the defense always goes for prior art (use). There are unique things that are protected.
Larry LeBlanc is widely recognized as one of the leading music industry journalists in the world. Before joining CelebrityAccess in 2008 as senior editor, he was the Canadian bureau chief of Billboard from 1991-2007 and Canadian editor of Record World from 1970-80. He was also a co-founder of the late Canadian music trade, The Record.
He has been quoted on music industry issues in hundreds of publications including Time, Forbes, and the London Times. He is co-author of the book “Music From Far And Wide,” and a Lifetime Member of the Songwriters Hall of Fame.
He is the recipient of the 2013 Walt Grealis Special Achievement Award, recognizing individuals who have made an impact on the Canadian music industry.