March 2009 Archives

Well, sort of.

Many of you are completely confused about music rights -- like copyright, mechanical licensing, recording master licenses, etc.

Everyone has been there at one time. So don't feel alone.

There's less excuse than ever for confusion with the internet by your side. Reading "from the horse's mouth" is my recommendation.

Start with copyright.gov. Yes, you may have to read some things several times before the meaning becomes clearer. Copy the sections of interest to a word processing file and when it refers you to other sections of the code, copy what's being referred to into brackets at that point. This keeps you from having to jump all around. It's much less confusing. At copyright.gov, you can find links to the actual copyright law and the regulations the Copyright Office have issued under that law. Regulations are published in the Code of Federal Regulations (C.F.R.).

Legal rights in most things are a bundle of many rights.

Before I go further, I am not your attorney or advisor and what I say is intended to get you started on your own search for meaning in all of this. Besides, I am writing this from a composer's viewpoint, not from an attorney's viewpoint. Also, the law is in constant change and this information may be dated when you read it.

Whatever you do, never pretend that you understand what is being said/written about copyrights if you do not truly understand. Do internet searches. Call and ask people/organizations. Even people who work for corporations can be helpful in explaining these things. By all means, check with an attorney if you have any questions.

Regarding music rights, check out "This Business Of Music." Literally, check it out of a library -- it's a book. It can clarify things for you by providing real world examples of how things have been done in the past. The basics in the book still stand. It has been updated, so look for that, too.

Be suspicious of what you read on the internet. If things don't make sense, go back to the source at copyright.gov. Someone may be trying to pull the wool over your eyes. An example would be that some organization implies that I must use their system of operation in order to comply with copyright law. If I read the copyright law and see nothing that requires that I follow their system, I do not have to follow that system. Another example is the commonly accepted "you can legally sample less than 5 seconds" of a copyrighted work without having to pay a royalty. This is not true and never has been. What people are probably confusing here are "fair use" samples. "Fair use" includes use for educational purposes and others. You can read all about them in the law itself.

What's included in the copyright bundle?

1. The right to reproduce the work in copies or phonorecords.
2. The right to prepare derivative works based upon the work.
3. The right to distribute copies or phonorecords of the work to the public by sale or other transfer of ownership, or by rental, lease, or lending.
4. The right to perform the work publicly, in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works.
5. The right to display the copyrighted work publicly, in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work;
6. In the case of sound recordings, the right to perform the work publicly by means of a digital audio transmission.

In the case of a song, there can be many owners of the copyright to the song as it is released to the public. The author of the music, the author of the lyrics, the owner of the recording master, the graphic artist who drew the CD/CD cover and the arranger of the music. With the advent of the singer/songwriter and home recording software/equipment, one person can be all of these people.

Even if these are all separate authors, they could have completed their work on the project as a "work made for hire." This means the author of a particular work does not ever own the copyright -- the copyright is owned by the person/organization that hired that author to do the work. If there is no "work made for hire" agreement, the copyright is assumed to be owned by the author of the work.

The right to reproduce the work in copies or phonorecords. The right to prepare derivative works. The right to distribute.

If you've heard or read about "mechanical rights," this is where they come in. In order for you to get the right to reproduce a work, prepare a derivative and distribute it, you have to advise the copyright owner that you plan to reproduce and distribute the work. The law sets the fee ("statutory fee") you have to pay for this license. Right now, for works under five minutes, you must pay 9.1 cents per copy sold/given away. So, if you record your own CD of ten "cover" songs (authored by someone other than you), for each CD sold, the rights to those works will cost you $0.91.

Who handles mechanical licenses? In many cases, it's the Harry Fox Agency. They represent many music copyright holders regarding mechanical licenses. But, it could be a law firm, a personal agent, the copyright holder, or any other person/entity hired by the copyright holder for this purpose.

The right to perform the work publicly.

Here's where BMI, ASCAP, SESAC, etc. come in. Before radio, music authors made their money by selling copies of their work via piano rolls, recordings and sheet music. Sheet music was HUGE! Everyone wanted to play the latest songs. Restaurants hired musicians to play all the latest (or had a player piano going). Everyone was getting paid -- except the authors of the works performed. Something had to be done! As a result, they created The American Society of Composers, Authors and Publishers, which started licensing their music for public performance. When radio came along, it became a major source of public performance licensing income, too.

This takes me back to the title of this post. Radio and restaurants were paying ASCAP which in turn paid the authors. What about the recording artist who made the song popular? And the owner of the recording? They were left out. They receive nothing in public performance royalties if they do not own the copyright to the underlying recorded work. This is one of the reasons that singers started writing their own songs (or demanded partial ownership before recording the song). It's also the reason that many performers of the early days ended up destitute. While their recorded performances play on and on via radio, TV, movies, Muzak, etc. they receive nothing. The copyright holders of the work (and their music publisher) get all of the public performance royalties. The internet is a different story -- performers/recording companies do get a piece of that public performance license fee "pie."

The lesson here is to always own the music you record! And if you also publish your own music, you get 100% of the public performance royalties (it's normally split 50/50 between author and publisher)!

When you listen to a public performance of your favorite song by your favorite artist, remember that he/she/they are not receiving a penny from the licensing of that performance if the song is owned by someone else. To me, it isn't fair, but that's the state of the law. This is why non-singer/songwriter performers are on tour a lot. Their only income from recorded or live public performance is ticket and merchandise sales. [This may soon change -- there is a move in Congress to include them in the licensing fee structure for AM/FM radio]

I've heard the term "synchronization license." What is that?

Here's where things get interesting. If someone wants to use a work that will be synchronized to images for public performance (film, television, internet site, presentation -- flash, powerpoint, whatever), the statutory fee does not apply. It's what the market will bear. Want to record "Happy Birthday" and sell it on CD or for download? That will be 9.1 cents per copy sold. Want to sync "Happy Birthday" -- that will be $10,000 for each use (this is based solely upon rumor -- I haven't checked this out with the copyright holder). HUGE DIFFERENCE! This is why we don't hear "Happy Birthday" more on television or in the movies.

Master Recording License

So far, all I've discussed is the mechanical license for the work. If you want to use an original recording of the work, remember someone other than the song's author may (and probably does) own that copyright. There is no "statutory fee" for this type of license -- it's a "what the market will bear" thing, too. This is why you do not always hear original recordings in commercials, film, television, etc. It's often less expensive to have the song re-recorded than it is to license the original recording.

I hope this starts you on the path to understanding some of the basic concepts in copyright licensing.

I make videos, instructional videos showing how to do various things with various programs. I would like to have music playing in the background, and the first music I thought was songs from DooM's sound track. I need to have your permission to use the music, so can I use your music in my videos?

The music will be quiet, but loud enough to recognize it. If anybody asks what the music is, I will tell them and provide a direct link to your website.

So may I use your songs in my videos?

You need to contact id Software regarding the use of music from any of their projects. If you are using a recording of the music, you also need permission from the owner of that recording.

It's easy to make your own recording of a song and sell it. The law says you have to advise the owner of the copyright to the music that you are going to mechanically reproduce the song, AND you have to pay a statutory fee for each copy of the recording sold. Right now that's 9.1 cents.

But, you want to synchronize the music to video. That has no statutory fee and the song's copyright holder can refuse to let you use the music or can charge you whatever he/she wishes.

Further, to synchronize an existing recording of a song in any project, you have to have permission of the copyright owner for the recording, and you usually have to pay that copyright owner a fee which he/she sets.

I have heard that to use "Happy Birthday" in a movie, on TV, in a music video -- any synchronizing of the song, it's a flat rate of $10k per use. To record it, it's only the 9.1 cents per copy sold. Big difference when video/film comes into play.

To protect identities, this is a generalized email from several similar emails:

I've just come across your "Getting Started As A Video Game Composer" article and I wanted to let you know that it has been a very illuminating read. The section on payment is particularly relevant to my current situation and I was hoping that you could provide me with some further insight and/or guidance if you are able.

I have written, recorded and submitted several pieces of music to a developer. We had what I and he considered an agreement -- until recently. Now he says they will not pay the agreed price. He offered much less instead and the possibility of a small royalty if the game sells well.

Is your original agreement in writing? It doesn't have to be a formal document or even just one document. A contract could consist of multiple agreements via email. Of course this only helps if you end up having to go the legal route, which has all sorts of problems in itself. But, you'd have something to take an attorney that he/she could work on.

If the second offer is not in writing, you need to have it in writing if agree with it. Taking royalties sounds really good until someone quits paying. In that case, the problem is yours, and without paperwork it will be a tough problem to solve.

If this was my situation, I'd withdraw my music because of the cancellation of the agreement. I'd write and tell them that if they want to use the music, they need to make it plain and clear what the financial situation is (stating it with clear promises in that regard).

Having to sue someone is no fun. You don't want to be put in that kind of a position. It's costly, too, not to mention time totally wasted that could have been spent moving forward. But, sometimes it is the only recourse.

I am open to the possibility of being paid royalties, but I am unsure of what a fair or standard percentage would be. My research has turned up little useful info. The few people I have spoken to have experience only with selling their music outright.

An article at the ASCAP site states: "Per game royalties range from 8 cents to 15 cents per composition and buyouts range from $2,500 to over $20,000." But that article is several years old and refers primarily to rates for existing music.

There is no standard. And how could ASCAP have any idea about the range of game royalties? They have nothing to do with the agreements between composers and game companies. There aren't that many people getting royalties. 99% is buyouts. And "fair" is what you and the developer agree to. I advise you to forget what others say they have done and decide for yourself what you think is fair. Then hold the line on that with the developer. If the developer can give you written proof that you are out of line, maybe you'd change your mind. Otherwise, if they want to use the music, they have to go with what you think is fair.

If you get a fabulous deal and can never collect on it, what good has it done you?

There are some who have written me about working with friends or acquaintances on projects. Unless you have a very clear, written agreement in this kind of situation, you'll not be friends or acquaintances for long. Look at the software companies that are still in business and how they've broken off relationships with the original members of the company -- much of that is due to a failure to have a clear, written understanding.

I know how easy it is to think "I need to make sure I get as much as possible for this music without losing the deal." I think it's better to say "I want to get paid fairly for my time and talent -- what amount would be fair compensation?" In that case, it doesn't matter how much the other party makes using the music -- you've still been paid fairly. In fact, I don't care what they get paid (but I hope it's at least enough to keep them in business).

The big positive about licensing music and royalties is that you get to keep the rights to your music and can possibly use it in other situations. The big positive about buyouts is that at least you've been paid and don't have to wait for your money. Licensing with a one time, up front payment might be the best of both worlds. You get to keep the copyright and agree not to license the music for a competing product.

Also remember that royalties may never amount to much because you are depending upon lots of people doing a good job to sell the game (marketers, distributors, etc.). And you have absolutely no control over whether the game ever gets to the marketplace. I've had many projects that never made it to the light of day because someone "down stream" failed to finish the project.

I've asked how much music is needed, but the developer has never given me an answer. His reply is just, "More."

This is typical of smaller developers in my experience. Also, a few developers are really lazy when it comes to planning -- especially music and sound. They'll keep you writing more and more and usually end up taking the first things you've presented. Meaning that the latter things were a possible waste of time (but they're good for maybe a later project). Still, it's not fun to work on something that's just cast aside. It feels to me like this developer is not even trying to be professional about this. That and they don't want to promise anything, which makes me suspicious.

You've relied upon the original agreement and met the requirements. So, you are owed the amount originally promised. But, it would probably cost more to go after it than it would be worth in time and money. It's even more difficult if they're in a different legal venue (like several states/countries removed from your location).

If you want out of this deal, make sure to send them a return receipt certified letter saying that since they have told you they will not pay under your present agreement you are withdrawing the music and they do not have authority to use it. I'd also send a similar letter to the publisher of the game, letting them know that if they release the game with your music, you will hold them responsible for payment in full under the original agreement. If you do this in a professional manner, the publisher will appreciate the fact that they will not be releasing a product without clear copyright agreements.

A small part of me that wants to go along with the latest agreement so that most of the music in the game will be credited to me, royalties or no. This is partly because I want the experience and partly because I assume that it could lead to more work with a more solid developer. However, on principle, my gut is telling me to just pull the music.

I well understand. But what if they don't credit the music? They might "forget" and there's really nothing you can do about it. That's happened to me and others I know. I've never had a situation like you are describing get me more work, but I can't say that it couldn't happen.

If the game is really good, it might be enough reason to go ahead and let them use the music. It's also been a learning experience for you. If, in the future, developers do not want to put an agreement in writing, it's probably best to pass.

Whatever you decide to do, I hope that you can wash the negativity of this experience away so that it doesn't affect you in the future. I try to make sure that I don't say later, "I wish I had ...." So, whatever decision I make, I live with it and let it go if it doesn't turn out to be a good decision. I also learn from it as much as I can. It sounds to me like you already have a handle on that sort of thing. I think if you're destined to do some type of thing (like compose), those things will be attracted to you without special effort. My best gigs have come to me through no past efforts of my own. Those I tried to force to work ended up being mediocre or worse.

You could let them use an amount of music that they can pay for under the original agreement. In that case, they have lived up to the agreement and you have more than lived up to it.

Even if you do not end up with music and/or credit in this game, you can claim credit because you have provided original music for it and influenced its development. You can list "music written for Project X." My experience is that future developers rarely take the time to listen to my music inside a game (unless it was extremely popular and they played the game). They want a demo they can "surf" through.

Oh, big point: If you let them use the music for nothing, write them a certified letter (return receipt) and tell them that you are licensing it to them for use in the game -- a non-exclusive license. That way, if the game/music becomes a hit, you can further license the music for TV/movie/commercials/etc. In that case, do not sign a "Work For Hire" agreement.

If you are not comfortable handling this sort of thing, by all means contact an attorney who has experience in the video/computer game business.

My recommendation in this regard is Charles B. Kramer of the New York and Illinois Bars. Charles was the first attorney to speak at the earliest Game Developers Conferences. He has a wealth of experience in Copyright, Trademark, Licensing, Contracts and Computer/Video Game Law.

Email: charles@charlesbkramer.com
Address: 200 East 10th Street, No. 816, New York, NY 10003, USA