How is an “intention” most effectively expressed? In writing.
When a song has already been written, the intentionality must be even more pronounced. The writer of the musical RENT was sued by his “dramaturge,” a person who apparently made considerable, lasting, and perhaps even fundamental additions and changes to the musical play—and to its songs, but after the fact—that is, after the work was first written and thus after the copyright was vested in the original author. The trial court in the ensuing case held that unless the dramaturge could show—in writing—an absolute intention by the original writer to share authorship, and therefore copyright ownership, with her, her case would be dismissed. She couldn’t, and it was.
During the appeals process, the parties settled, so we will never know how this case would have eventually evolved, but the implication is that without a piece of paper that documents the intention of the parties, the participants in creating a song will not be certain as to their rights and will be susceptible to claims and cross-claims once the song succeeds—which is, of course, the only time that it matters anyway.
The Multiple Writer Mess
Since urban music and pop music joined artistic forces and Max Martin (boy bands) and Dr. Luke (Katy Perry, Ke$ha) became the kings of contemporary record sales, a phenomenon unknown in earlier years became the norm in the mainstream, pop, urban genres: performing rights societies were beginning to see multiple writers claiming authorship shares. And I don’t mean two or three (music, lyric, and sometimes “beat”), but five, seven, even eight or nine. One hit song recently boasted a writer whose interest was 0.78%—less than 1% of the writer’s share. Cowriter agreements such as those described above are no longer regularly entered into. The music publishers have no interest in going to the considerable expense of negotiating terms, nor do the writers whose lawyers are charging them upward of $600/hour (and neither do the lawyers who are commissioning their client’s income—after all, no income is directly related to the time and effort necessitated by negotiating a cowriter agreement). So the parties are left to signing a “splits” letter which merely sets forth the respective percentages claimed by the writers and their respective music publishing companies. If, as is so often the case, all of the cowriters cannot agree on the splits, then mechanical royalties will not be payable by the record label. Several hundreds of millions of dollars of such monies were held “in suspense” by United States record labels until recently, so you can see the extent of the financial damage such circumstances cause the copublishers and the cowriters.
But collaboration with successful writers or writers who, doubling as producers, can create their own recordings, is too valuable a course of conduct to refrain from doing so because the number of writers becomes cumbersome. A cowriter (often the artist) who has contributed 5% (or who has been allowed to claim this share even if he or she didn’t) is happy to hook onto the star of a legitimate, emerging, or proven, writer and the proven writer deals with him or her as part of the dues he pays for getting the cowriter gig in the first place.
COWRITERS WHO ARE BAND MEMBERS
What if two or more cowriters are band members? Now we have a much more complicated situation, where nothing is standard. Often bands have a principal writer or two, and the remainder of the band contribute very little in the way of authorship or assistance during the recording process.
How do bands compensate the cowriters? And how much should the principal writer or two give up in order to keep peace among the band members? After all, it is not particularly healthy in a community of four or five band members for one to receive significantly more than the rest of the members. Jealousies are exacerbated and financial inequality makes for even more problems—not just among the band members, but also among their spouses as well, who always seem to get involved on behalf of their husbands or wives. Now that’s trouble! Decisions as to how the band should structure the song ownership and authorship are made at the beginning of the band’s relationship, when not all of the data about the band, its future, the dynamic of the band members, etc., are in; yet, most often, all of them must live with the decision for better or for worse—and for all time. How have different bands dealt with this issue? In a word, differently.
How to Split the Splits
One band—predominantly an instrumental group—decided that although two of the six members wrote all of the songs, the remaining four should share equally in the publisher’s share, to the extent they were able to retain it (and they were able to retain all of it in this case). Therefore, while a song’s authorship might list two names, the publisher’s share would be split six ways. The justification? The band members, and specifically the two writers, felt that the other four contributed, if only in the studio, to the sound and arrangement of the songs sufficiently to deserve credit for having established the song’s identity for all time. I am not saying that they were thought to have “created” or “authored” the song. In fact, they were explicitly excluded from the writer’s credits and the writer’s share of royalties. But it would be acknowledged that although the two principal writers had created the “essence” of the song, on one level it was the result of the combined efforts of all six.
Another band followed the above pattern, but added the following twist. Since so much work had been done arranging the songs in the studio during the recording process, the band as a whole was considered to have contributed authorship to some extent. Therefore, a song by this group would have perhaps three writers: the two principal writers, who might share 80% of the writer’s share, and a third (fictional) writer who would be entitled to the remaining 20%. This latter portion would be shared by all six writers, whose “name” would be a contraction of the band’s name. Thus, the share of one of the two main writers would be 43.33% (one-half of 80% plus one-sixth of 20%), while the share of one of the writers who was not a main writer would be 3.33% (one-sixth of 20%). The songs would be registered with the performing rights societies with this authorship breakdown, and all income would be divided accordingly by the band’s publishing company and its licensees.
Here are four more possibilities:
1. A band has one main writer who shares his or her retained publishing interest equally with another member of the band who is instrumental in taking care of just about everything and who has been with the band since the beginning (unlike all of the other members). But the writer’s share is his own and is not shared with anyone.
2. A band has one main writer who shares her or his copyright and (possibly) the entire writer’s share with one other band member on one or two songs per album to acknowledge the other band member’s musical contribution to arranging all of the songs on the album and for being with her or him in the studio 100% of the time, as opposed to other band members who recorded their tracks and went to the beach.
3. Each band member receives his or her appropriate writer’s share, but the publisher’s share is dealt with as follows: Any band member who does not write a particular song (or any song for that matter) receives 10% of the net publisher’s or copublisher’s share (that is, 5% of the whole song’s earnings) as long as he or she is a member of the band through to the end of a given accounting period. If he or she writes or cowrites a song, the band member receives his or her pro rata share of the publisher’s or copublisher’s share left after the various 10-percenters are paid. Thus, if two members cowrite a song equally, they share 50/50 in the writer’s share of each dollar earned. And, if there are, say, two other members of the band who did not write that song, they each get 10% of the publisher’s or copublisher’s share, leaving 80% of the publisher’s or copublisher’s share to split equally between the two main writers.
4. The band members all agree in advance that the authorship and the publishing share will be split equally among them. Even if one writer only sets up the loop that “inspires” the rest of the song and the other writer goes home and finishes the song, or one band member writes all the lyrics and the rest c
ontribute the music, everyone is treated the same.
Are there other variations? Sure. A multitude of them. The important thing is that the issues be discussed openly—preferably with the band’s manager, business manager, and lawyer—and a consensus arrived at. For, as in any partnership (and what is a band if not a partnership?), consensus is the way to go. If the situation ever arises in which a majority outvotes the minority, trouble is not far behind.
Problems can set in when the splits become weird. A client of mine authored one-third of a song and therefore the writer’s share was split one-third, one-third, and one-third. The publisher’s share was dealt with differently, however: first of all, she split her publisher’s share with a company whose job it was to obtain a recording of the song (and who succeeded in doing so), so her publisher’s share went from one-third to one-sixth. But then, for some reason, she agreed to split her remaining publisher’s share even further—but not equally—with another of the cowriters. Somehow or another, she ended up with a one-third writer’s share, but 11.89% of the publisher’s share. That was more or less what she wanted to accomplish, and she stood by her deal with her cowriter. Subsequently, however, she faced an unanticipated problem.
The performing rights societies in the United States will most likely honor an instruction to pay to a copublisher an odd sum like 11.89%. Cowriters should be aware of the fact that the performing rights societies around the world conceive of writer’s and publisher’s shares of songs in terms of twelfths as opposed to percentages (for example, 25, 25, 50, etc.). Dividing twelfths into two (as would two writers sharing their interest 50/50) or three (33⅓, 33⅓, 33⅓) or four (25-25-25-25) parts is easy, but what do you do with eight songwriters, one of whom contributes 5%? That’s .04167 of 1/12th! Even if the societies overseas will agree to such parsing, and many of them will not, the errors likely to occur are practically guaranteed.
In this case, the author wrote one-third of the song. The writers as a group were entitled to six-twelfths of the song, so each one, including my client, was entitled to two-twelfths of the writer’s share of song earnings.
So far so good. The problem arose with the publisher’s share. How could the performing rights societies outside of the United States handle a copublisher whose interest was 11.89% of six-twelfths? Question: How many twelfths does 11.89% of 100% of the publisher’s share equal? Something between one-twelfth and two-twelfths. See what I mean? In fact, this writer had created a nightmare for the performing rights societies around the world. Even if she managed to correctly and successfully register her claim with every performing rights society in the world and convince them to pay her publisher’s share correctly, who knows what the other cowriters or their publishers might have done? The publisher’s share of six-twelfths (100% of the publisher’s share) was broken down so that one copublisher retained 11.89% and the remaining copublishers shared 88.11%.
Oh, to add confusion to an already complex issue, the mechanical rights societies around the world do not work in terms of twelfths, but in terms of percentages, just as the US, mechanical rights societies do. Believe me, the societies around the world will not have the patience to register and pay royalties according to the whims of coauthors in the United States—not least, perhaps, because the United States is currently one of the few territories in which songs are routinely cowritten.
15 • BEING YOUR OWN MUSIC PUBLISHING COMPANY
Pros and Cons
And therfore, at the kinges court, my brother
Ech man for him-self, ther is non other
—GEOFFREY CHAUCER
Songwriters who have succeeded in retaining their copyrights have established for themselves an annuity that in innumerable examples has allowed them options they would never have had were they to have placed their copyrights in the hands of traditional music publishers. Songwriters who are not also recording artists really need the help of music publishers to obtain cuts on their songs. Songwriter–recording artists, on the other hand, obtain their own cuts. Some songwriters relinquish their copyrights because they need the money that large publishing companies will often pay them to acquire ownership or co-ownership, and administration rights, to their songs. Even those who can afford to do so may not want to forgo the benefits that come from an association with a fully staffed music publisher. Circumstances will necessarily be different for each songwriter, and it is a worthwhile exercise for all songwriters to sit down with their representatives and analyze whether, to what extent, and when it would serve their immediate and long-term goals to self-publish or whether it would be better to align themselves with a large music publishing company.
SELF-PUBLISHING
If you’re a songwriter who wants to self-publish, you must take the steps outlined below. If you don’t have the time or inclination to take them yourself, you should ask for help from an attorney experienced in copyright law or one of a multitude of small publishing administration companies. The Association of Independent Music Publishers (AIMP; www.aimp.org) is a great resource. Most managers and business managers don’t have the interest or experience to discharge the tasks required in the administration of copyrights, although some do.
Registration
The first step is to obtain PA (Performing Arts) forms from the United States Copyright Office in Washington, DC, or online. In 2016, the cost to register “paper” claims to copyright is $85, but the online cost is only $35 or $55 per registration. The Copyright Office will accept claims for multiple songs if the forms are accompanied by a tape or CD containing all the songs. This will save a lot of money. Although some copyright lawyers will argue that there is some question as to whether a compulsory license fee can be maintained on a per-song basis if a group of songs has been combined on one registration (it is possible, if unlikely, that only one mechanical license fee would be collectible for songs registered as a group), the cost advantages of multiple registrations outweigh the risks.
GETTING IN TOUCH WITH THE COPYRIGHT OFFICE
The Copyright Office (accessible via the Library of Congress site, www.loc.gov, or directly via www.copyright.gov, is a division of the Library of Congress. Some feel that the Copyright Office should be a part of the Department of Commerce, as are the Patent and Trademark divisions. Those who disagree argue that deposits (copies of books, songs, records, and other creative materials) made in the course of registering copyrights are a principal reason the copyright law exists; it provides the Library with a copy of just about everything that is created in this country and much of everything that is created in the rest of the world. The address of the Copyright Office is Library of Congress, Copyright Office, 101 Independence Avenue, SE Washington, DC 20559-6000. Courier delivery should be addressed to CCAS, 2nd Street and D Street, Washington, DC The telephone number for questions is (202) 707-3000. Call between the hours of 8:30 a.m. and 5:00 p.m. Eastern Time.
The Mechanical Variance
Once registered, if your work is recorded for release, you will have to issue a license to the record company. As stated previously (see chapter 12, this page), the preferred form of this document is not drafted as a license at all. It is designed as a variance of the copyright law. The reason for this is if a license is breached, the entity granting the license can take only a breach of contract action against someone who fails to honor its terms. In contrast, breaching a mechanical variance opens the door to a suit on the basis of federal copyright infringement, offering far greater remedies.
The language of the variances provides relief from some requirements of the Copyright Act applicable to those who record songs pursuant to the provisions of the compulsory license clause, Section 115, of the Copyright Act. These requirements include
• rules concerning the timing of the request
• extremely detailed formal requirements of the notice of intention to use the musical composition
• the calculation of royalties on the basis of every record made and distributed, rather than mad
e and sold
• various accounting and payment requirements, such as those requiring accounting and payments on or before the twentieth day of each month (under oath, no less!), and additional accounting requirements promulgated by the Register of Copyrights, such as the obligation to produce annual detailed cumulative statements of account, certified by a CPA.
And that’s just a sample. The actual language of the Act formalizes these already burdensome requirements to an almost farcical degree. It is no wonder that the “variance” has been a welcome relief to record companies. What the variance accomplishes is to put these formalities on hold: They do not go into effect unless the user does not honor the “varied” provisions set forth in the variance. In particular, if the record company does not pay, accurately and on time (usually every three months), royalties due, the company will have itself waived its benefits and will be an infringer—not a contract breacher.
In contrast, although a traditional license agreement provides for the same royalties to be paid at the same times and intervals, the record company’s failure to pay royalties accurately and/or on time will generate damages only in the amount of the royalties the songwriter should have been paid plus perhaps interest and a few costs. But this is nothing compared to the remedies available against infringers under the Copyright Act, which include such things as the right to sue in a federal court, secure injunctions, claim statutory damages ranging up to $150,000, and recover costs and attorneys’ fees. Now that is something. None of these remedies would be available to a prevailing party suing a record company for failure to pay royalties under a traditional license agreement.
What They'll Never Tell You About the Music Business Page 45