Friday, November 14, 2014

Music Business/Law Tips - "A Piece Of A Legend"

An interesting new business model has cropped up whereby a famous band will offer investors a chance to invest in the band and own a piece of that band's future earnings. This mostly applies to veteran acts that are not currently on the charts as a way for them to supplement their income in leaner financial times. An example of this is the band Queensryche who recently made a private offering to interested investors who for a minimum investment of $50,000 will receive a percentage of the band's future entertainment income (i.e., merchandise, CDs, etc.). Be on the look-out for more classic acts to offer this option, which is cool for music fanatics with some spending cash who want to really be close to their idols and possibly make a few dollars at the same time. Ben McLane Esq benmclane.com

Saturday, November 1, 2014

Music Business/Law Tips - Band Agreement

Once a band is formed the members are in business with each other. If the band gets successful or breaks up there will be issues about money and rights that can be quite nasty if the rules have not been agreed to in advance. An internal band agreement is the recommended method to handle it. A band agreement will address issues such as: (1) who owns the name, (2) profit splits, (3) voting on band decisions, (4) songwriting, and (5) leaving members. If there is no agreement, the law presumes a general partnership between the members where all assets (including the name/logo), profits and losses are equally shared. It is recommended to work this out early in the band’s career because it may be harder to come to an agreement once there is a dispute. Ben McLane Esq Benmclane.com

Tuesday, October 21, 2014

Music Business/Law Tips - "Copyright Protection"

A songwriter should protect the song(s) they write to ensure maximum income streams and defend against infringement. The songwriter(s) own the copyright in an original work. The term of copyright generally is life of the author plus 70 years. This means the originator(s) control all the rights for that period (e.g., record, distribute, perform, etc.). Copyright exists once the song is in a “tangible” form. Generally this would be a recording (demo is OK). There is no requirement to file the song with the US Copyright Office to create a copyright, but a writer obtains additional legal rights by doing so (i.e., right to sue in court for infringement and get statutory damages), and filing is a presumption of authorship. Hence, it’s best to file any songs with the US Copyright Office that a writer plans to exploit, and just to be safe always put the © symbol next to the song title on credits or demos sent out. Ben McLane Esq Benmclane.com

Sunday, October 12, 2014

Music Business/Law Tips - Touring Profits

Touring profits for new artists are razor thin as most of the money goes right back out for travel, crew and commissions. It’s estimated that a new act only pockets between 15-30% of the profit from a show (after expenses and commissions), and this is before taxes. For example, a new band playing decent size rooms opening for a bigger act will generally gross about $10,000 a night if you combine the show fee plus merchandise sales. If such a band plays 5 nights a week they are grossing $50,000 a week (on average). Out of that, the band must deduct production costs ($10,000/week average), transportation costs ($10,000/week average), and crew costs ($10,000/week on average). That is a net profit of $20,000. The band must then deduct commissions of up to 40% to pay its manager, booking agent, lawyer and accountant, leaving the band with on average $8,000-$10,000 to split between the 4-5 members. Clearly, for a new artist, touring is all about setting themselves up for making more money in the future once they become a headliner where the fees increase (but so do the production and travel costs). On the other hand, touring is essential to develop a fan base that will stick with the act for many years to come/reap future benefits. Ben McLane Esq Benmclane.com

Thursday, October 2, 2014

Music Business/Law Tips - "Royalties for Oldies"

A recent California court case ruled that Sirius XM Radio (digital radio) must pay broadcast royalties for pre-1972 records it plays. The case was filed by The Turtles who sang on several big hits in the 1960s (i.e., Happy Together). Current Copyright law says that terrestrial (i.e., AM/FM band) radio stations don’t have to pay broadcast royalties to performers (only to songwriters via BMI, ASCAP or SESAC). Moreover, there was no copyright in sound recordings (only songs) prior to 1972. However, in 1995 the Digital Millenium Copyright Act carved out an exception whereby digital services like Sirius XM Radio must now also pay a performance royalty to performers and master rights owners when records are played on their stations. This royalty is collected by SoundExchange. The key issue was that Sirius XM was only paying out on records made from 1972 onward on the basis that no copyright existed prior to 1972 so there was no legal right to pay - artists like The Turtles felt they were getting screwed. The ruling is a major precedent and may result in terrestrial radio stations eventually being forced to pay broadcast royalties to performers as well. Of course Sirius XM will probably appeal, so keep posted to see if the decision stands. Ben McLane Esq Benmclane.com

Wednesday, September 17, 2014

Music Business/Law Tip - "Wristbands = Mo' $$$"

Festivals such as Lollapalooza and Bonnaroo are now having concertgoers wear RFID bracelets whereby an attendee has the option to connect the wristband to his/her bank or credit accounts to pay for what they buy at a concert (food, drinks or merchandise) by tapping the band against a chip reader. Statistics indicate that concertgoers spend about 20% more on on-site purchases when its cashless. This is clearly a trend you'll see more of at venues since the promoters make more money and there does not seem to be a backlash from attendees. Ben McLane Esq benmclane.com

Monday, September 1, 2014

Music Business/Law Tips - "Public Domain"

A song that is in the public domain means that it is no longer protected by copyright laws. This is usually because the song is very old and the term of copyright expired (generally if the song was created before 1922). A song that is in the public domain can be used, released or sampled without having to pay royalties or get permissions. However, when a song goes into public domain varies case by case, so make sure that the song is really in the public domain before you treat it as such. There are some helpful online databases that list public domain works you can Google to find them. Ben McLane Esq benmclane.com