On February 8, 2014, California Lawyers for the Arts presented this year’s 31st annual Music Business Seminar at Berkeley Law School. Music industry professionals gathered around the theme theme, “21st Century Musician: Making a Living Making Music.” As the name suggests, the event included panels and breakout sessions that were designed to inform artists and legal professionals on how to navigate complicated statutes and processes in order to help recording artists financially benefit from their creative endeavors. Artists also had the opportunity to meet with a lawyer for a 20-minute consultation throughout the day. Several performers infused the event with live shows, including Real Vocal String Quartet, Jeffrey Lipinski, Steep Ravine Band, and The Northerlies.
Thomas Leavens delivered the keynote address by identifying several trends and forecasts in the music industry. Leavens observed that the digital age has provided a platform for consumers to express their desire for content. As a result, music consumption has changed. This includes the trend of having alternatives to file-sharing, such as streaming. As a result, music consumption has gone from ownership to access. Accordingly, Leavens speculated there will be a rise of questions surrounding whether consumers will acquire music through ownership or license. Proponents of ownership advocate for the right to resell digital music. In response, others say that the act of reselling is just making a digital copy. As the debate boils on, Leavens encouraged artists and lawyers to nevertheless ensure that digitized creative works’ metadata are complete and correct. As music consumption patterns evolve, precise metadata is essential for payment streams that will adequately compensate artists.
Leavens then shifted his focus to The Next Great Copyright Act. On the whole, Leavens said he agreed with Maria Pallante’s call for revision of the current copyright framework. Among the discussions surrounding The Next Great Copyright Act, Leavens cited six issues.
The first issue was compulsory licensing for music compositions. At the moment, the old copyright act provides that a person who uses a music composition can do so without the consent of the composer given that they comply with certain statutory provisions. Leavens foresees the need for licensing to expand in order to take into account the needs of composers of original works. Second, new legislation may also bring about a small claims court for legal conflicts surrounding copyright. Third, Leavens predicted that there will be increased performance rights to sound recordings. Unlike many other countries, the US is one of the few countries that do not compensate performers for sound recordings on terrestrial radio and Leavens suggested that within a decade that will change. Fourth, the notice and take down process is another issue that is likely to evolve. The Digital Millennium Copyright Act provides a safe harbor for websites that allow user generated content to take down content after notice is given. A new copyright act will have to address the problem stemming from content being taken down and reincarnating somewhere else on the internet. This is a massive undertaking considering that, in 2013, there were 235 million take down notices for Google alone. Leavens also brought up the Authors Guild v. Google case as a fifth issue for entertainers and lawyers to follow. After a judge found that Google’s scanning of books fell under fair use, Leavens asked the audience what implications that may have for recordings. Leavens closed by brining up the sixth and final issue: mash-ups. Under Leavens’s interpretation, courts are favorable to the fair use defense thus presenting questions as to whether mash-ups are transformative enough to put old works into new contexts thereby allowing them to access the fair use defense.
Other presentations included panels that imparted practical legal and business advice to emerging artists. One such panel included Jarid S. Johnson, Bryn Boughton, and Jeffrey Brandstteter who discussed protecting intellectual property rights when publishing media online. Johnson spoke to the challenge and benefits of promoting music using videos. Johnson encouraged bands to see themselves as a brand and release videos to provide fans with immediate emotional connections. Videos are useful for branding purposes, because they display performers more effectively than images, audio, or text and allow fans to have intimate knowledge of musicians. By linking videos to artists’ websites, videos can indicate professionalism and improve search engine optimization.
Bryn Boughton discussed how artists can protect their music through free promotion. Boughton gave four pieces of advice. First, Boughton encouraged performers to have a plan and formalize goals. Second, Boughton urged artists to make their works available through as many outlets as possible, including retail distribution, radio streams, and directly to fans. Third, Boughton mentioned that artists can claim royalties through groups, such as SoundExchange, performing rights organizations, or foreign collection societies. Fourth, Boughton advised artists to add value to their product by making fan connections and releasing different versions of their music.
Jeff Brandstetter discussed how copyright works using social media. Brandstetter discussed how many artists use social media and grant non-exclusive, royalty free, transferable, and sub-licensable art worldwide. Because information is so widely available through social media, Brandstetter stressed that artists should register their works for a copyright and add watermarks in order to provide the public notice. This practice defeats the innocent infringer defense by undermining a person’s claim that they did not know an artist exerted copyright over the product.
Another method of protecting creative works is to enter the product into the Creative Commons under a licensing scheme that is consistent with the copyleft movement. This option allows the artist to reserve some rights. This method may be ideal for artists who want to incentivize their fans to use parts of their content for free.
Regardless of which method an artist chooses to protect their intellectual property, Brandstetter recommends registering derivative works, as well. Even if derivative works are through a different medium than the original, there are equivalents to watermarks that can be used on audio and video content. Brandstetter further reinforced the point previously made by Leavens that adding or embedding metadata is essential for artists to receive full compensation. Furthermore, Brandstetter advised artists to post an explicit permissions policy that informs the general public exactly what they can do with their art with or without permission. This requires that artists provide contact information for permission and clearances.
In conjunction with the panel discussions, legal practitioners also held breakout sessions to provide more direct advice in an intimate setting. Jon L. Duman presented effective negotiation skills and strategies for emerging artists. Duman explained that at the beginning of an artist’s career, they have lower bargaining position because the perception of the music industry is that talent is not in short supply. Therefore, performers must add value to their talent by being mature, dedicated, and ambitious. Artists should research record labels in order to effectively articulate what they can contribute to companies in addition to finding out how businesses can help them further their career.
Afterwards, Ned Hearn discussed types of entities that could protect artists’ legal interests. While a single artist could become a sole proprietorship, when two or more people come together to create intellectual property, there are several options. Hearn stressed that it is important to create a partnership agreement at the start of collaboration, otherwise if someone leaves the partnership, questions will arise regarding whether the group should liquidate their assets. This will determine whether a group will have to start a new entity or be able to replace someone who left. In addition, partnership agreements should state how to provide credit and compensation for types of intellectual property, such as brand names and copyrights of songs.
If a partnership is large enough, Hearn explained that a group can become a corporation, limited liability company (LLC), or non-profit. A group that decides to become a corporation must chose between a C corps and an S corps. C corps are more traditional and partnership terms resemble shareholder agreements. Shareholders pay taxes on profits, which is why this type of incorporation is more likely to be seen in the tech industry where there are several investors. On the other hand, S corps has the same protection as a corporation, but the distinguishing feature is that income and expenses pass to individuals or partnerships. In addition, there are also LLCs, which are hybrids between partnerships and corporations. Hearn also added that non-profits are an option for musicians and performers who preserve social and cultural art forms that are considered contributions that can access grant funding and tax exemption.
The presentations ended with Gian Fiero hosting “Face the Music!” where recording artist submitted 60 to 90 seconds of a song for critique from a panel. The final session provided an opportunity for artists to gain feedback on their music. The process revealed the vulnerability that comes with producing a creative piece. Nevertheless, panelists were thoughtful in their feedback and continued to further the spirit of professional development, creativity, and collaboration present throughout the event.