What They'll Never Tell You About the Music Business

by Peter M Thall

  Is Copyright a Violation of the First Amendment?

  This is not something that you really need to know, but in keeping with the theme of this book, here is something you might never have thought of. There are those who believe that copyright, being a protection of expression, actually infringes on the First Amendment rights of the public. When a painting is stolen, the thief walks away with a canvas, but the canvas itself means nothing. It is the depiction of the painting’s subject—the expression of the artist depicted on the canvas—that has value. A copy of a musical score constitutes notation in a certain order by means of a graph that describes the movement of the notes depicted and the rhythm to be given to the notes. Does protection of this “order” represent an impingement on free speech—free expression? Thankfully, both the copyright law and the courts have decided this question in favor of the creators. They do not agree that the government, by granting copyright protection, is interfering with individual’s rights of free speech. On the contrary, the copyright law specifically separates the “idea” from the expression. The idea is as free as the wind; only the expression by which the author expresses his or her idea is protected by copyright—constitutionally as well as by statute—a hard test to overcome.

  THE CLEARANCE NIGHTMARE

  Although it is not entirely clear what destabilized the relationship among copyright owners and users, a relationship that had been on a relatively even keel for many, many decades, the culprit may have been the nightmare of copyright clearance. Those who object to the way copyright law works today see abuse wherever they look, and they see the benefits of technology being twisted in order to support protections that are no longer valid. No one, they say, should write a law that requires three different licenses for one use. But that is exactly what we have. An interactive Internet file involves mechanical, synchronization, and performance rights. (A karaoke producer has to clear those three rights, but also has to clear print [display] rights to the lyrics.) Some entertainment lawyers recommend that music industry players work on developing a composite license. But to date, there really is no such thing available. An EMI Music Publishing spokesman pointed out, before his company’s demise, that the “law couldn’t be clearer.” All of these separate rights can be cleared—whatever the costs in terms of labor, time, and fees. That is the problem. And that is the solution as well. Once Congress hears the cries of the bedeviled users of music, they will see that the law indeed could not be clearer. And they will change it. The fear is that they will change it in ways that will satisfy no one. And no one in the music industry is happy when Congress forces itself into their world—especially when their world is so complex, so filled with custom and tradition, and so beholden to the industry’s own peculiar sense of balance among authors, publishers, and recording companies.

  Lawrence Lessig, in his book Free Culture, gives the following example. A filmmaker was producing a documentary based on Wagner’s Ring Cycle, a four-opera marathon. As Valhalla was crumbling in the final act of the final opera in the cycle, Götterdämmerung, the camera operator drifted backstage and caught the Met Opera workers watching The Simpsons. Everyone, including the creator of The Simpsons, Matt Groening, thought this was delightful, but Fox Television, which owns the audiovisual rights to The Simpsons wanted so much money for the three- or four-second background use that the filmmakers were forced to delete it from the film, which itself was costly, and to replace it with three or four seconds from another TV show, the inclusion of which would make a similar point. Chalk up one for inauthenticity.

  The reality is that even some of the wholly legitimate and legally sanctioned actions of copyright owners are enough to make one wonder if reason has totally taken a vacation. The stories are legion, and the following examples merely scratch the surface.

  • Recently a public company was planning a promotion with DJs appearing at several hundred of its stores. I reminded the company’s representative that it would require performance licenses from the three American performing rights societies: ASCAP, BMI, and SESAC. “Well,” he sputtered, “We want to do the right thing, but we now learn that in addition to your legal fees, we have to pay SESAC, the smallest performing rights society, three to four times what ASCAP, the largest, is charging.”

  • Also recently, I was asked to clear five songs and five masters for use in a television show that initially appeared on PBS (the songs and masters were covered by a special provision in the copyright law for those specific broadcasts). Subsequent negotiations for nonpublic television rights, a DVD, foreign broadcast rights, etc., involved more than thirty different companies and departments and the paperwork took six months to complete.

  • You want to use a photograph or likeness of Elvis Presley in a book? Forget about it. Whereas the right of publicity was always assumed to have died with the subject, many states are now passing laws to keep their citizens alive. I call the Tennessee law reviving Mr. Presley’s publicity rights from the afterlife the “Help the Balance of Payments of Tennessee—Keep Elvis Alive” law.

  • You want to use the likeness of Marilyn Monroe by Andy Warhol on the cover of a book, The Culture of the 20th Century? The Warhol estate doesn’t care, but the Monroe estate does. You can’t do it.

  Documentaries

  Documentary filmmakers, in particular, are up against what they consider to be the excessive demands of copyright owners: They must quote existing transcriptions (whether print, video, or audio) in order to tell their story. The budgets for documentary films are notoriously small, and the films are usually completed before the directors know exactly what footage they will use to tell their story. They fear the costs when they can find the owners; the risks when they cannot; the eagle eye of their insurers, who demand proof of 100% clearance; the need to self-censor rather than take their art where their muse carries them; the fact that the fair-use provisions of the copyright law offer no concrete guidance and present problems for even the most experienced attorneys.

  When documentary filmmakers shoot a scene in a room in which a television set or radio is playing, they must be conscious (and cautious) enough to turn off the TV or radio lest they end up having to negotiate with the copyright owner for the right to use the material—and these rights don’t come cheap! Documentary filmmakers refer to this recurrent nightmare as “the clearance culture trap.” It is no wonder. A recent panel of experts selected by the Copyright Society of the United States entitled their discussion “Is Copyright Killing the Documentary Film?” They firmly believe that documentary filmmaking is threatened by the licensing demands of copyright owners of film and television footage, music, photographs, and other source materials. Unfortunately, as noted above, their fears are well documented (pun intended).

  Here is another example. Many of the songs written by Irving Berlin were written with Fred Astaire in mind—and, in fact, were introduced on film by Fred Astaire. Documentary filmmakers treating some aspect of Irving Berlin’s life and work customarily seek permission from the Astaire estate (his widow) to incorporate a film clip from an Astaire film into an Irving Berlin retrospective, even though they do not have to. But Robin Smith Astaire regularly blocks these uses, to the obvious detriment of the veracity and power of the films themselves. Although she has no right to block them (the original film companies own the clips for all purposes), the documentary film companies are paralyzed because they apparently fear retribution or lawsuits or something, if not with regard to the particular project for which the use was requested, then with regard to some future project. Errors and omissions insurance (E&O) policies may not be obtainable if the documentary filmmakers cannot demonstrate that they are insulated from claims from the Astaire estate. (It is somehow not very comforting to know that Mrs. Astaire did not object to the use of an Astaire clip to promote the Dirt Devil Dynamite Vacuum Cleaner.) Now you know why Gene Kelly (whose estate regularly and generously approves uses of his filmed performances) is better known to the youth of America than Fred Astaire. Ch
arles Wright, an A&E television network vice president, has pointed out that even those who do not own intellectual property are wielding power over those who want to use it.

  The (Independent) Empire Strikes Back

  The New York Times recently reported that the Independent Film Channel, on advice from its counsel, Michael C. Donaldson, a former president of the International Documentary Association, has decided to avoid (evade?) the huge cost of clearing film clips by promulgating a copyright law–based fair-use position. They feel that film clip–dependent documentaries in particular need to find an alternative to the paralyzing fees charged by copyright owners—usually other motion picture companies. The future will tell whether this creatively aggressive application of the fair-use doctrine will hold up in court.

  Searching for the Owner

  What happens when a company desires to use a copyrighted work, is willing to pay any price for a license, and cannot locate the copyright owner? An honest company will be discouraged from using it and presumably the consumer is worse off as a result. Works whose progeny or current ownership is unknown or uncertain are often referred to as “orphan works.” While the owners or administrators of music and film works are fairly well documented and public, the same is not true of works of art, illustrations, cartoons, etc. This issue has drawn the attention of the Copyright Office and Congress, but their proposed solutions are suspect, as you will see below (this page).

  Sampling

  Contrary to the belief of some, most sampling is not simply an easy way out for producers and other authors who are too lazy or untalented to create the sounds themselves. Their real intent is to capture a mood, a memory, a feeling of a specific time or experience, and to blend that into their own creation. DJs have “sampled” for years. But what they are permitted to do in a club—live—is prohibited on a permanent recording, even if the recording is available only via the Internet via downloading or streaming. Most composers, and the courts, find sampling anathema to the concept of private property; others find the process similar to making a salad—the ingredients that make up a contemporary recording naturally include elements that went before. What else is culture than the accumulation of a civilization’s art over time? Sampling is now part of most every genre of music—from hip-hop to rock to pop. Even electronic classical works are utilizing samples from our everyday culture just as a hip-hop composition might.

  Consequences of the Clearance Nightmare

  Another challenge for entertainment lawyers are laws written during the predigital–pre-Internet age (or their application) that are not relevant in today’s music world, where legitimate creators of music want to reach citizens around the world and convey to them the fruits of their creations.

  Among the most important of entertainment attorneys’ functions is to provide their clients with a “rights road map” showing them how to comply with copyright laws, identify the risks they must avoid or manage, and somehow find them a way within the law to publish their book, write their musical, or record their song.

  Too often, we are unable to achieve these goals for our clients. Our frustration is mirrored in the frustration and anger of those who wish to use copyrights in a responsible manner. The possibilities offered by the Internet have merely added exponentially to the mood among copyright users when they keep running into stone walls in an effort to seek permission, and—yes—pay a reasonable fee for the rights they seek. Their frustration is finding support among academics and, more importantly, powerful lobbies that single-handedly are reversing the thinking of the author-friendly Congresses of the past 230 years.

  COPYRIGHT AND PERSONAL PROPERTY

  In the past, building on the art of others was the hallmark of genius. Now it is an invitation to a lawsuit. Is this simply borrowing, or is it outright copying? Sampling without the permission of the owner of the music sampled is illegal. Fine. But the effort (not to mention the cost) involved in clearing rights ranges from impossibly difficult to nearly impossible. This discourages the creative use of our culture’s output and, at the same time, encourages widespread violation of copyright owners’ rights. Both results are unproductive and destructive.

  Is intellectual property “owned” in the same way that a house or a car is owned? The Recording Industry Association of America (RIAA) and the National Music Publishers Association (NMPA) say it is a property right. Period! What I create is mine. Period! This view permeates the copyright owners’ world. What, then, is our culture? An accumulation of other people’s property? Whose culture is it then? Certainly not “ours.” How can it be “ours” when we have to ask permission to use it? And how can a culture survive and expand when innovation is stifled by the threat of lawsuits?

  In his book The Dark Heart of Italy, Tobias Jones, in attempting to identify a core essence of Italy and Italians, compares the culture of Italy to a chemical reaction: “Nothing is created and nothing is destroyed but everything is transformed.” Tell that to a copyright owner whose music has been “transformed.”

  If copyright were mere property, it would be subject to state and federal laws that enforce property rights. A primary difference between copyright as property, and ordinary property in the form of goods and services, is that the cost of producing a copyright does not reflect either the cost of its reproduction or the cost of its distribution. Another is that intellectual property is more vulnerable to theft (which we call piracy) than, say, manufactured products like clothes, cars, and toasters. Finally, stealing a song file via peer-to-peer sharing does not take the property from an eventual buyer, as does stealing a CD from a store. The property still exists—a copy of it has merely been relocated.

  The value of intellectual property is not just the intangible MP3 file reflecting it. The idea that a user of intellectual property may pay less than the value of providing the property via distribution means such as radio, television, motion picture theater presentations—even the Internet—is anathema to creative people and their supporters, publishers, record companies, film companies, etc. And why not? People are willing to pay for water that they could get for free? Why not copyrighted works?

  Work for Hire: Co-Opting the Author

  Generally in this book, I have referred to the author as the person who actually creates the song—whether the lyrics or the music (or even the “beat”). There is s bizarre exception to this concept which used to be judge-made and ultimately appeared in the “new” copyright act of 1976 (taking effect on January 1, 1978). This is the “work for hire” doctrine. Briefly, this concept deals with situations where companies actually engage a creator to author something just for them—and just for a particular purpose. For example, a screenplay for a film, or a marching band arrangement of a musical composition. This is a very old concept dating back to 1903, and which has been codified in the 1976 law. To be a work for hire, the author needs to agree in writing that the work is indeed a work for hire, that the work was “specially ordered” by the employer, and that the work is of a nature that would fall within nine specific categories of commissionable works cited in the Copyright Act. If the work does not do so, it will be deemed to have fallen into the company’s hands solely by virtue of an assignment. The difference is enormous. An transfer of an “authored” work can be terminated (see chapter 20) after thirty-five years. But a work for hire will stay with the company for ninety-five years! Recording artists who, since 1978, have signed agreements acknowledging that their records have been created as works for hire are now disputing whether there is any legitimacy to such representations given the fact that the nine categories do not explicitly set forth sound recordings. The record labels are relying on the wording of the statute which includes “contributions to collective works.” Are recorded tracks collective work? We’ll find out soon as the first tests of this dispute will be made after 2013.

  MISUSE OF COPYRIGHT

  The doctrine of misuse of copyright was first developed in patent law, another law derived from the US Constitution (A
rticle I, Section II). “Misuse of patent” is a defense raised to counter a claim of patent infringements. It is cited when companies that own patents abuse their monopoly in order to overwhelm a defendant (the alleged patent infringer) with the power they derive from the federally granted patent. This is usually framed as an antitrust issue rather than “unfairness” per se.

  There exists no fully fleshed-out doctrine of misuse of copyright, but it is bubbling under many litigations brought by copyright owners. Many observers feel that it is only a matter of time before the courts or Congress, in an effort to protect citizens from the abuse of the monopoly that is inherent in copyright ownership, extend the doctrine to music publishers. After all, music publishers, not being authors, are not even the targeted beneficiaries of the copyright law or, for that matter, the constitutional provision underlying it. Why allow them to use their power in this way?

  Let me explain.

  Let us take as a given the fact that holders of copyright monopolies have the means to abuse their powers. Now, who is damaged by their actions? Certainly consumers. But authors as well. Because authors do not, usually, control their own copyrights but have relinquished control to huge multinational companies such as EMI and Warner/Chappell, which together control almost 1.5 million copyrights. Even when the multinationals do not actually own the copyrights, but merely administer them, they still control them. The same applies, on a much smaller, but nevertheless important, scale for hundreds of smaller music publishing companies that completely control decisions as to whether, and for how much money, songs are licensed.