Sunday, November 29, 2015

Music Business/Law Tips - "Label/Publisher Royalty Split"

Historically, royalty splits from record sales between the record label that recorded and released the record and the music publisher that provided the song embodied on the record have greatly favored the label. For downloads and physical record sales - after the distributor deducts its share - the publisher receives about 13% of the revenue (mechanical royalty), while the label is paid the rest. This trend continues with streaming. According to Spotify, it pays 21% to publishers, while the label is paid the rest. Hence, labels on average seem to make between 4-5 times as much as publishers from sales and streaming. Because of this, there is a lot of chatter about trying to make the splits more favorable to publishers/songwriters since records do not sell as much anymore and streaming does not pay as much (yet). It will be interesting to see if any changes occur down the line. Ben McLane Esq

Sunday, October 18, 2015

Music Business/Law Tips - "YouTube Is King"

Industry sources indicate that YouTube is growing faster than all other music streaming platforms combined. Although you may hear a lot about Spotify, Google Play, Apple Music, Rdio, etc. in the world of streaming - YouTube in still the primary destination of choice for free music consumption. According to new data from Nielsen Music, video music streaming sites like YouTube (and to a lesser extent Vevo) are growing 60.6 percent faster than all on-demand audio streaming services combined, paid or free. Streaming is the fastest-growing way people are getting their music today. On the other hand, digital and physical sales are down. The trick will be to find a way to make streaming more lucrative to the content creators. Let's hope the growing volume will translate, and clearly an artist with new music should have a video on YouTube, etc. for the exposure and byproduct possibilities. Ben McLane Esq

Sunday, October 4, 2015

Music Business/Law Tips - "Spotify Breaking Acts"

Spotify is the world's largest subscription service. Most people use its "freemium" model where they do not have to pay to listen. The good part about this is that Spotify has become a platform for new artists to be discovered, and on occasion Spotify will help promote and launch a new artist. Recently, Spotify helped break Hozier 's "Take Me To Church" and Major Lazer's "Lean On" into the Top 10 via its "Today's Top Hits" Playlist, adding the songs to its artist development platform called "Spotlight", and targeted banner placements in "browse" sections of the Site. By putting the focus on these tracks and exposing them to millions of potential listeners, this caused more repeated "listens", and listeners started to share the tracks and add them to their own personal playlists - where ultimately the songs became viral hits. Sounds like the new radio to me. Let's hope there is room for indies as well as major label backed artists to participate. Ben McLane Esq

Sunday, September 20, 2015

Music Business/Law Tips - "Web Infringement"

With the simplicity of posting music and video online, one may think it is easier to prove copyright infringement, but according to recent court rulings this is not necessarily the case. Under basic Copyright Law, in order to prove copyright infringement, one must show: (1) that the claimant truly owns the copyright (i.e., song or video), and (2) that the infringer "copied" the copyright without permission. The second prong has two elements: (i) the copy must be substantially similar to the original, and (ii) the infringer had to have access to the copyright being infringed. The "access" element is very strictly interpreted when it comes to posting a song on the Internet for example. Courts have held that availability of the copyright on the Internet by itself is insufficient to prove access. In other words, just because something is online does not mean that the defendant saw it there and copied it. The plaintiff will have to show that there is "widespread dissemination" of the copyright being infringed. This can be demonstrated by lots of downloads and website traffic. The more traffic, the greater the likelihood that the defendant actually saw or heard the infringed work. For example, in a recent case involving Angry Birds video game infringement, since the Angry Birds app has been downloaded 1 billion times and has 40 million active users, that was enough to show widespread dissemination. Clearly most content online is not that popular, so be wary about bringing a copyright action until it is easy to prove. Ben McLane Esq

Sunday, August 30, 2015

A "Sunset Clause" in a Management Agreement essentially means that the manager still gets paid a commission after the deal ends on money the artist is still making off deals the artist signed during the term of the Management Agreement, but at a reduced rate from the what the commission percentage was during the term of the Management Agreement. For example, if an artist signs a 3 album deal during the term of the Management Agreement and the 3rd album comes out after the Management Agreement Term is over, the manager still gets paid a commission for the money the artist makes from that release, but at a reduced commission rate for a certain number of years post-term (on average 3-5 years), and the rate goes down to eventually 0% (e.g., 1st year post-term = 15%, 2nd year post-term = 10%, 3rd year post-term = 5%, thereafter 0%). Ben McLane Esq

Saturday, August 15, 2015

Music Business/Law Tips - "Consumer Data = $$$"

Universal has formed The Global Music Data Alliance (GMDA) which will analyze billions of pieces of digital consumer data to hopefully provide new revenue streams to labels and artists. Essentially, GMDA will inspect behavioral patterns of listeners/buyers (e.g., what songs a Democratic voter listens to) to find patterns that can be used for target marketing. This should allow artists to monetize their fan bases more effectively, and allow advertisers to better figure out where to put their ad dollars/which artists to tie in with. Ben McLane Esq

Saturday, August 1, 2015

Music Business/Law Tips - "Employee vs. Independent Contractor"

In the entertainment business there are a lot different employment situations: part-time, full-time, consultancies, internships, working remotely, etc. One of the most common arrangements is for someone to be an independent contractor. However, there are legal ramifications to this status, and often neither party really knows exactly if the worker is considered an independent contractor or a true employee with benefits. Although there is no exact definition of an "independent contractor", the California Department of Industrial Relations provides 12 factors that a court would consider if there was ever a dispute: 1. The most significant factor to be considered is whether the person to whom service is rendered (the employer or principal) has control or the right to control the worker both as to the work done and the manner and means in which it is performed. 2. Whether the person performing services is engaged in an occupation or business distinct from that of the principal. 3. Whether or not the work is a part of the regular business of the principal or alleged employer. 4. Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work. 5. The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers. 6. Whether the service rendered requires a special skill. 7. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision. 8. The alleged employee’s opportunity for profit or loss depending on his or her managerial skill. 9. The length of time for which the services are to be performed. 10. The degree of permanence of the working relationship. 11. The method of payment, whether by time or by the job. 12. Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests. Ben McLane Esq