LO1 task 1 - Understand the structure and organisation of the music industry

Record labels

A record label is a brand associated with the marketing of music recordings and music videos. More often than not a record label is the publishing company of a record coordinating the production, manufacture, marketing, distribution and enforcement of copyright. Record labels also conduct talent scouts in which new artists can be developed under their trademark whilst signing and maintaining contracts with artists and their managers. Record labels are usually sorting into two tiers, larger commercial labels such as sony records and EMI recordings and then smaller independent labels which have their own signature sound such as Dirtybird recordings and Defected.

Recorded music and live music

Recorded music is creating a record which can be sold and promoted through a record label and publishing company. Recorded music is the product of effects and many takes to get perfect, this is where the main big difference between live and recorded. A live performance are what could be called a 'moment in time' where the performers ogive a more true performance showing what the artist is actually capable of. live music is more common in an artists later stages a good example would be the rolling stones who still tour and play their music live because they don't have the need to record new material. Recorded music is more common with artists such as shadow child as they have an easier ability to create new content and remix other content which they use live whilst djing. The production process of recorded music is very different from live. Recorded requires the use of a professional music studio and recording environment. The process entails the artist working with a producer to record the several layers into a DAW where its grouped together to create the final recording. This recording can take many attempts to get perfect. The recording also needs to be mixed and mastered in order for it to sound perfect for the listener. Live music is similar however everything needs to be planned and executed perfectly first time using a sound engineer to watch over and change the levels of the on stage components. A mixing desk similar to what would be found in a studio is used to monitor and change the levels of each on stage artist and musician. This is so the show sounds balanced and professional.

Distribution

Distribution is vital to the selling of music as it is the key link from the label to the consumer. A record label will sign a contract with a distributer which then gives them the right to sell the record in shops and online. The distributor will the take a cut from the sales and then pay the rest to the record label. Some distributors expect a finished product to sell however most distributors will do a m&d deal with a label. this is a manufacture and distribute deal so this covers the costs of the manufacturing up front. Music can also be distributed online using things such as itunes, Beatport and Spotify which is the most popular form in the modern era due to the coming of mp3 formats and portable players like Ipods.

Links to different distribution methods

http://www.amazon.co.uk/Digital-Music/b?ie=UTF8&node=77197031

https://www.apple.com/uk/itunes/

http://www.xbox.com/en-US/Live/Partners/Zune

Some of these methods are purchase which means the listener gets a copy of the song to then put on an Ipod or mp3 player. Others such as Spotify are streaming services which means that the user gets a lot more music for less put it requires internet connection and a subscription. This service is only for consumers as it dosen't allow DJs to play through software at a gig.

Legal issues in the music industry

copyright

Copyright is a form of legal protection given to many kinds of created works such as musical compositions or songs, lyrics, records (CDs, LPs, singles, 45s, cassettes, DAT, etc.) poems, books, films, TV shows, computer software and even commercials. For a work to be protected under copyright, its must be: 1) “original” which means that it was not copied from any other source; 2)“fixed in a tangible medium of expression” which means that it exists in some reasonably permanent or stable form so that a person can perceive it and reproduce it; and 3) have a minimum degree of creativity.

The Rights of the Copyright Owner: The owner of a copyright has the exclusive rights to do the following:

1) Reproduce the Work: The rights to make copies of the work, such as the right to manufacture compact discs containing copyrighted sound recordings.

2) Distribute Copies of the Work: The right to distribute and sell copies of the work to the public.

3) Perform Works Publicly: Copyright owners of songs (but not owners of sound recording copyrights) control the rights to have their song performed publicly. Performance of a song generally means playing it in a nightclub or live venue, on the radio, on television, in commercial establishments, elevators or anywhere else where music is publicly heard

4) Make Derivative Works: A derivative work is a work that is based on another work such as a remix of a previous song or a parody lyric set to a well-known song (a classic example being Weird Al Yankovic’s song “Eat It” which combines Michael Jackson’s copyrighted original work “Beat It” with a parody lyric “Eat It”).

5) Perform Copyrighted Sound Recordings by Means of a Digital Audio Transmission: This is a right recently added by Congress that gives copyright owners in sound recordings the rights to perform a work by means of a digital audio transmission. Examples of digital audio transmissions include the performance of a song on Internet or satellite radio stations (such as XM or Sirius)

6) Display the Work: Although this right is rarely applicable to music, one example would be displaying the lyrics and musical notation to a song on a karaoke machine.

 No one can do any of the above without the permission or authorization (usually given in a license) of the owner of the copyright.

The Copyright Term: The length of time that a work is protected by copyright for a work first published after January 1, 1978, is the life of the author plus 70 years. That means for the entire lifetime of the author and 70 years after the author dies, the copyright is in force.

sampling

Sampling occurs when a portion of a prior recording is incorporated into a new recording.
When an existing recording is sampled without permission, copyright infringement of both the sound recording (usually owned by the record company) and the song itself (usually owned by the songwriter or the songwriter’s publishing company) occurs. In order to legally use a sample, permission is required from both the copyright owner of the sound recording and the copyright owner of the underlying musical work. License fees for sampling vary greatly depending on: how much of the music is sampled; the popularity of the music you intend to sample; and the intended use of the sample in your song (if your entire song is based upon a sample it will be more costly than a minor use of the sample). License fees for samples can be granted for free, for a percentage of the royalties (i.e. a few cents for each record pressed or sold) or for a flat fee. Because there are no statutory royalty rates for samples, the copyright owner can charge the artist whatever he wants for the use of the sample and can refuse to grant permission to other artists to sample his work.

If an artist uses samples without the copyright owner’s permission, a court can force the artist or the artist’s record label to recall and destroy all of the records containing the samples and to pay damages to the copyright owner in an amount ranging from £480 to £96000 for each act of infringement. In addition to copyright infringement, artists who sample may also be in violation of their recording contracts. Most recording contracts contain provisions called “Warranties” “Representations” and “Indemnification” in which the artist promises that all of the material on his album is original, and agrees to reimburse the record label for all of its court costs, legal expenses, and attorneys’ fees if the label is sued for copyright infringement. Before sampling, no matter how small a portion of the recording is used, permission from the copyright owners of both the recording and the song is required. Do not rely on the myth that you can use a certain number of seconds or bars of someone’s song without penalty. 

Music publishing

Music publishing is simply the business of exploiting a song – that is, finding uses for the song, such as cover versions, film, TV and video games, ringtones, greeting cards and even karaoke machines – and collecting money for such uses, usually in the form of a license fee. Songwriters typically own the copyrights in the music and lyrics to the songs they write and earn money, usually from license fees or royalties from the commercial use of their songs. Publishing income does not come from copyright ownership in sound recordings. It comes from ownership of the copyrights in the songs. The copyright owner of a song is entitled to certain exclusive rights under the UK. Copyright Act (see section on the “ Rights of the Copyright Owner”). If someone wants to use the song in any way, they must get permission from the copyright owner in the form of a license. Money generated from such licenses is called “publishing income”.

Sources of Publishing Income: There are four main sources of publishing income:

Public Performance Royalties If a song gets played in public (in nightclubs, at live concerts, on the radio, on television, etc.) the copyright owner of the musical work is entitled to payment for the performance of that song. However, in order to collect performance royalties, the songwriter usually needs to register as a member of a performance rights society, which will collect all royalties from the radio and television stations, nightclubs, live venues and other commercial establishments playing the songwriter’s music.In the UK the main royalty collecting society is PRS for music. Songwriters can register with a performance rights society as soon as one of their songs is commercially recorded, offered for sale, or publicly performed. Performance rights organizations are not traditional music publishers and are only involved in the collection of performance royalties.

Mechanical Royalties Mechanical royalties are fees paid to the copyright owner of a song (usually the songwriter and/or the music publisher) for the right to reproduce the song on a recording. The Copyright Act provides that once a song has been commercially released, any other artist can record and release their own version of that song in an audio-only format (CD, cassette tape, vinyl, digital download etc) without the copyright owner’s permission so long as they pay the copyright owner or the copyright owner’s publisher the minimum statutory royalty rate for every copy of their version of the song that is pressed and distributed. Usually, the record label releasing the recorded version of a copyrighted song pays mechanical royalties to the publisher or songwriter according to the terms of a contract called a “mechanical license agreement”. Mechanical licenses can be obtained through the Harry Fox Agency (www.harryfox.com) or can be negotiated directly with the publisher or copyright owner of the song. Mechanical licenses do not apply to dramatic works such as operas, ballet scores, and Broadway musicals.

Synchronization License Fees A synchronization license is required any time the performance of a song is accompanied by visual images. Synchronization licenses are issued when songs are included in audiovisual works such as movies, television shows, TV advertisements, video games, etc. The fees paid for synchronization licenses vary according to the usage and the importance of the song. While a ten-second background use of an unknown instrumental song in a television show may generate a fee of only a few hundred dollars, the fee for the use of a full-length performance of a hit song in a major motion picture or national advertising campaign can be in excess of £65000.

Print License Fees While performance, mechanical and synchronization royalties are the main sources of publishing income, revenues from the sale of printed music can also be substantial. A songwriter receives royalties from a print license any time sheet music of his song or a folio or collection of his songs is sold. The royalties received from print licensing are usually a few cents per copy printed.

Trademarks
A trademark is a word, name, symbol or device, or combination of them, used by a business in commerce to identify its goods and services and to distinguish them from others. Trademark rights may be used to prevent others from using a confusingly similar mark, but not to prevent others from making the same goods or from selling the same goods or services under a clearly different mark.

trademarking a band name
Before deciding on a particular band name, it is important to determine whether anyone else is already using that name. A band’s rights in its name depend on a few key factors: whether the band used the name first; the geographic area (city, state, region, etc) where the band uses the name; and whether the band actually performs under the name. If the band used the name first it may be able to stop other acts from using the same or a similar name. However, unless the band has obtained a federal trademark registration giving it an exclusive right to use the name throughout the United States, the band would only have the rights to use the name exclusively in the areas where it was the first to use the name. For example, if a local band performed live or sold its CDs only in Chicago, it could not prevent a band in California from using the same name, but could stop the other band from using the name in Chicago if the Chicago band was the first to use the name in that area. Additionally, if a band applied for a federal trademark registration for it’s name in 2005, it could not prevent another band that started using the name in 2001 from using the name in the geographic area(s) where that band performs or sells its music.
Prior to choosing a band name, artists should conduct a thorough trademark search to ensure that the name they have selected is not being used by another band. A reasonably complete, and free, trademark search can be conducted independently utilizing online resources such as search engines like Google, Yahoo etc, and various online music retail sites (Amazon, I-Tunes, Napster, etc). Although these are good starting points, to be as careful as possible not to infringe on another band’s name, artists may want to hire an attorney specializing in these matters or a trademark search company to conduct a more comprehensive trademark search.

piracy and illegal downloads
The UK is the second worst in the world for piracy under the united states. Piracy costs the music industry billions of pounds a year and this is all down to the advancements in computer technology and the ability to torrent creative content through services like bitorrent and utorrent.

Artist representation

There are four different kinds of representatives that may represent recording artists, performers, and songwriters in the music industry: personal managers, agents, business managers, and attorneys.

Personal Managers: Personal Managers advise and counsel the artist on virtually all aspects of the artist’s career. The duties of a personal manager may include:
• dealing with the artist’s publicity, public relations and advertising 
• assisting in the selection of the artist’s material 
• devising plans for the artist’s long term career development 
• choosing the artist’s booking agent, road manager, lawyer, accountant et al and overseeing the artist’s relations with each of them 
• counseling the artist on what types of employment to accept 
• in some instances, acting as a liaison between the artist and the artist’s record company

 Personal managers are usually paid a commission of 15% to 25% of the artist’s gross receipts from all of the artist’s activities in the entertainment industry (recording contacts, publishing contracts, endorsements, television and movie work, etc). This commission, which may increase depending upon the artist’s success, is in addition to reimbursement of the personal manager’s travel and out-of-pocket expenses incurred in representing the artist. In certain states, such as California, a manager may not seek or procure employment for artists, as the artist’s agent typically performs this job.

Agents: An employment or booking agent’s job is to find work for the artist in the music industry. As compensation for their services, an agent typically receives between 5% and 15% of the artist’s gross earnings from any bookings, engagements, or employment secured by the agent. The agent’s commission percentage may vary depending on a number of factors, including state laws, the type of work, the length of time and/or the popularity of the artist. The laws in many states (including Illinois) require agents and talent agencies to obtain licenses before they can collect commissions and in some states, such as New York, agents can only charge artists a maximum of 10% for securing engagements.

Business Managers: Business managers, who are often Certified Public Accountants, look after the financial aspects of an artist’s career. A business manager’s responsibilities can include providing accounting services, paying the artist’s bills, advising the artist on investments, helping form corporations etc. As 1 compensation, business managers typically receive anywhere from 2% to 5% of the artist’s gross receipts or may get paid an hourly rate for their services.

Lawyers: In addition to reviewing, negotiating and drafting contracts and advising clients about the law, entertainment attorneys also often perform many of the same duties as personal managers, business managers, and agents. layers are either paid an hourly rate for their services or receive a percentage of the deals they negotiate on behalf of their clients.

 Before managers and agents will represent an artist, they usually require signed contracts. If approached by a manager or agent, an artist should consult an attorney to advise them and to handle any contractual negotiations on their behalf. You will need professional help before signing any agreement to be sure that the terms of the agreement (such as the fees, duration etc.) are fair to the musician.

sourced from - http://www.law-arts.org/pdf/Legal_Issues_in_the_Music_Industry.pdf