John Welch at the TTABlog is a great resource for keeping up with the current state of affairs in trademark law. He recently pointed to a case where a trademark registration was invalidated because the Board found that the registrant had committed a fraud on the office. The fraud was committed when the registrant alleged in a statement of use that all the goods and services identified in a class were in use, when in fact only some of those goods/services were being used.
TTABlog now provides a very well-written article on the current state of affairs in fraud matters at the PTO. The article is by Carrie Webb Olson and is a must-read for all trademark owners and their attorneys.
Tuesday, March 18, 2008
Friday, March 14, 2008
Will Recording Artist Performance Royalty Open Payola Loophole?
You should check of Bruce Houghton's article from Hypebot on potential payola problems with requiring a performance royalty for recording artists, as well as the original Hear 2.0 interview ("It’s time for Radio to charge labels for airplay – legally") on which the article is based.
As an initial matter, it should be pointed out that the interview was conducted with David Oxenford, a broadcast attorney. My guess is that David spends most of his time working on behalf of radio stations, and one might conclude that his allegiances are with them. I don't mean that to be a jab, just that we as practitioners tend to work with a class of clients and even in our off time will advocate for their position. It just so happens that my clients are artists, and I wholeheartedly admit my bias.
David argues that radio has always served as a form of "free promotion" for labels; if radio has to pay a performance royalty then stations should start charging labels to play their songs.
This is ridiculous on several levels. First, how arrogant is radio to think that it could one day flip the switch and never play a song unless it got paid by the label? Advertising only exists on radio because of the music; so radio thinks it can charge one company a fee for the opportunity to be advertised in connection with another paid advertisement? And does radio really think that a playlist dictated solely by who paid the most will be anywhere near the quality required to maintain listeners? Are late-night informertials captivating for any reason other than their comedic value? It would be impossible for a 100% paid-for playlist to even be consistent, much less entertaining or relevant, meaning listeners will stop tuning in, thus reducing commercial rates, which will in turn reduce revenue.
Second, why would any label be willing (or able) to pay for play when they just got done fighting for the right to receive money from those plays? It applies a pre-royalty mentality to a post-royalty situation. Even if labels were willing to pay (as they have in the past), why would payola regulations suddenly cease to apply? There is no causal connection between a performance royalty and pay-for-play; publishers get a performance royalty but you don't see them lining radio's pockets for spins.
The short answer is, payola would still be illegal. However, it appears as though radio would like to change that (or at least tweak it a little).
David discusses how current payola regulations don't apply a wholesale ban on pay-for-play, only that stations have to disclose the fact that they were compensated for playing the particular song. In his view, this regulation is unique to the radio industry. He illustrates by pointing to grocery store displays for products (the stack of Cokes at the end of the isle), which are paid for but require no special disclosure. He also mentions lunches and favors given to doctors by drug manufacturers. In both of these situations, the "provider" is receiving a benefit and is in turn promoting a product to you (the chips at the end of the isle, or the new blood pressure drug).
In David's view, radio should be treated just like grocery stores and drug companies: They should not be required to disclose the fact that they were paid to play a song. If radio had no disclosure requirements then it would be free to charge all artists to get their spins, thereby reversing the performance royalty while also creating a new revenue stream. The problem with David's analogy, and the wholesale pay-for-play concept in general, is that music and radio are nothing like grocery stores or drug companies.
Nobody is foolish enough to think that the display in the grocery is there by chance, and whether its Coke or Pepsi is of little consequence to the richness of our culture. Music, on the other hand, is art. From our nation's founding we have sought to protect and encourage the arts (for instance, copyright law was intended to protect creative expressions, not for financial reasons, but to give creators an incentive to create). There is no similar sense of national interest in which soda pop we drink.
Another key distinction is that your local Publix is a private business operating in a private building on private land. Radio, however, is made up of mostly private businesses operating on public airwaves. Not only does the government have an interest in promoting the arts, it has an interest in regulating the use of the airwaves, which are supposed to be used for the public good, namely, providing news, information and, yes, music, to the public. Payola runs contrary to our collective interests in both the arts and the airwaves because it prevents any creative decision-making or musical knowledge from going into the music selection, and only music that is paid for gets played, thus turning the entire broadcast into one long series of commercials and eliminating any modicum of public service. A music director picking music he/she thinks is good = public good. Corporate head selects music for fat check = public bad.
With respect to David's analogy to drug companies taking doctors out to lunch, while I'm no expert, several of my friends are drug reps; if David thinks radio has it bad, he should try looking into pharmaceutical sales. True, doctors don't have to disclose to patients that a drug rep took them out to lunch. However, this is only because the government so strictly regulates what and how much doctors may receive in the form of freebies. What would David say if the fed told Clear Channel that its station manager couldn't be on the guest list for concerts anymore?
Just how untenability of radio's opposition to a master performance royalty is evident in the nature of their arguments. For years they have relied on statements like, "Radio is free promotion - we help the artist sell records;" "This is how it's always been," and "Major labels are just greedy." While all are true, radio has never been able to dismiss the far stronger responses: "It may be free promotion, but you're still making billions on it so it must be worth something," "We've only dealt with it because your lobbying group has been stronger than ours," and "At least with a performance royalty artists can bypass the labels and actually get paid."
David Oxenford's interview presents radio's new tactic: If you can't win with logic, try scaring the crap out of them. Tell artists that if radio has to pay a royalty then radio will make artists pay to get heard. Funny that they should try this now, when consumers have alternatives to terrestrial radio. Oh yeah, and those alternatives already pay a master performance royalty, and don't charge the artists to get played!
You know, sometimes I think terrestrial radio wants to become extent.
As an initial matter, it should be pointed out that the interview was conducted with David Oxenford, a broadcast attorney. My guess is that David spends most of his time working on behalf of radio stations, and one might conclude that his allegiances are with them. I don't mean that to be a jab, just that we as practitioners tend to work with a class of clients and even in our off time will advocate for their position. It just so happens that my clients are artists, and I wholeheartedly admit my bias.
David argues that radio has always served as a form of "free promotion" for labels; if radio has to pay a performance royalty then stations should start charging labels to play their songs.
This is ridiculous on several levels. First, how arrogant is radio to think that it could one day flip the switch and never play a song unless it got paid by the label? Advertising only exists on radio because of the music; so radio thinks it can charge one company a fee for the opportunity to be advertised in connection with another paid advertisement? And does radio really think that a playlist dictated solely by who paid the most will be anywhere near the quality required to maintain listeners? Are late-night informertials captivating for any reason other than their comedic value? It would be impossible for a 100% paid-for playlist to even be consistent, much less entertaining or relevant, meaning listeners will stop tuning in, thus reducing commercial rates, which will in turn reduce revenue.
Second, why would any label be willing (or able) to pay for play when they just got done fighting for the right to receive money from those plays? It applies a pre-royalty mentality to a post-royalty situation. Even if labels were willing to pay (as they have in the past), why would payola regulations suddenly cease to apply? There is no causal connection between a performance royalty and pay-for-play; publishers get a performance royalty but you don't see them lining radio's pockets for spins.
The short answer is, payola would still be illegal. However, it appears as though radio would like to change that (or at least tweak it a little).
David discusses how current payola regulations don't apply a wholesale ban on pay-for-play, only that stations have to disclose the fact that they were compensated for playing the particular song. In his view, this regulation is unique to the radio industry. He illustrates by pointing to grocery store displays for products (the stack of Cokes at the end of the isle), which are paid for but require no special disclosure. He also mentions lunches and favors given to doctors by drug manufacturers. In both of these situations, the "provider" is receiving a benefit and is in turn promoting a product to you (the chips at the end of the isle, or the new blood pressure drug).
In David's view, radio should be treated just like grocery stores and drug companies: They should not be required to disclose the fact that they were paid to play a song. If radio had no disclosure requirements then it would be free to charge all artists to get their spins, thereby reversing the performance royalty while also creating a new revenue stream. The problem with David's analogy, and the wholesale pay-for-play concept in general, is that music and radio are nothing like grocery stores or drug companies.
Nobody is foolish enough to think that the display in the grocery is there by chance, and whether its Coke or Pepsi is of little consequence to the richness of our culture. Music, on the other hand, is art. From our nation's founding we have sought to protect and encourage the arts (for instance, copyright law was intended to protect creative expressions, not for financial reasons, but to give creators an incentive to create). There is no similar sense of national interest in which soda pop we drink.
Another key distinction is that your local Publix is a private business operating in a private building on private land. Radio, however, is made up of mostly private businesses operating on public airwaves. Not only does the government have an interest in promoting the arts, it has an interest in regulating the use of the airwaves, which are supposed to be used for the public good, namely, providing news, information and, yes, music, to the public. Payola runs contrary to our collective interests in both the arts and the airwaves because it prevents any creative decision-making or musical knowledge from going into the music selection, and only music that is paid for gets played, thus turning the entire broadcast into one long series of commercials and eliminating any modicum of public service. A music director picking music he/she thinks is good = public good. Corporate head selects music for fat check = public bad.
With respect to David's analogy to drug companies taking doctors out to lunch, while I'm no expert, several of my friends are drug reps; if David thinks radio has it bad, he should try looking into pharmaceutical sales. True, doctors don't have to disclose to patients that a drug rep took them out to lunch. However, this is only because the government so strictly regulates what and how much doctors may receive in the form of freebies. What would David say if the fed told Clear Channel that its station manager couldn't be on the guest list for concerts anymore?
Just how untenability of radio's opposition to a master performance royalty is evident in the nature of their arguments. For years they have relied on statements like, "Radio is free promotion - we help the artist sell records;" "This is how it's always been," and "Major labels are just greedy." While all are true, radio has never been able to dismiss the far stronger responses: "It may be free promotion, but you're still making billions on it so it must be worth something," "We've only dealt with it because your lobbying group has been stronger than ours," and "At least with a performance royalty artists can bypass the labels and actually get paid."
David Oxenford's interview presents radio's new tactic: If you can't win with logic, try scaring the crap out of them. Tell artists that if radio has to pay a royalty then radio will make artists pay to get heard. Funny that they should try this now, when consumers have alternatives to terrestrial radio. Oh yeah, and those alternatives already pay a master performance royalty, and don't charge the artists to get played!
You know, sometimes I think terrestrial radio wants to become extent.
Tuesday, March 11, 2008
More on Spitzer Political Hit Job
The more I read, the more convinced I am that this was a blatant hit job, directed solely and precisely at Spitzer. Two observations:
1. The investigation is reported by BBC to have commenced against Spitzer in 2007 when banks notified the IRS of some suspicious transactions involving Spitzer's account:
If it began as an investigation of Spitzer, several questions must be answered. First, why is it that any banking transaction was suspect enough to warrant notifying the IRS? Surely $4,000 expenditures every now and then are not so extraordinary that the federal government must get involved. What about the transactions was suspect? Did they think that Spitzer was evading taxes? Surely not, since he's a public official and has significant disclosure requirements above and beyond the average taxpayer.
If it all began as a result of an investigation of the prostitution ring, how and when did the "suspicious" banking transactions become relevant? Did the investigators have some circumstantial evidence that Spitzer was patronizing prostitutes but needed to dig into his financial records to see if any payments confirmed those accounts? If so, wouldn't it be a bit of a twisting of facts to say that the bank brought them to the attention of the IRS, and not the other way around?
That Spitzer made so many powerful enemies cannot be disregarded when looking into this matter. The reality is that an obscene number of lawmakers make use of prostitutes' services on a regular basis, as do corporate heads - if this were not the case then there would be no such thing as $4,000 hookers, much less so-called "high class prostitution rings." That Spitzer is the lone public figure to be fingered in this investigation should speak volumes. The sketchy facts surrounding the origins of this investigation are even more telling.
Again, no defense for his actions, if the allegations are true. However, it is a private misdeed. What is more important: (1) In judging Spitzer's character, how has he conducted himself in office and what he has done to serve the public in his public capacity?; and (2) In judging the events at hand, how was the investigation brought about, how was it conducted, and what are the end results of the investigation in its entirety? The investigation and the results are a public concern because it was conducted 100% with public funds and in the public interest. Spitzer is of interest only because he is a public official and our only interest in him is his conduct in that position.
I hope Spitzer is as wise in confronting this issue as he's been in all of the other tasks before him; I hope he asks the hard questions and finds out how this came about, and defends himself - not defends his actions, but brings light to the unfathomable breach of public trust that was, no doubt, the impetus behind the investigation.
Let's face it - if Spitzer goes down, if he resigns and never again holds public office, we all lose. As common citizens, we will have lost an invaluable insider, one who was willing to stand up to the wealthy and powerful and fight for what was right. If Spitzer resigns, the bad guys will win yet again.
1. The investigation is reported by BBC to have commenced against Spitzer in 2007 when banks notified the IRS of some suspicious transactions involving Spitzer's account:
The investigation began last year when banks reported irregular transfers to the Internal Revenue Service, which traced them back to Mr Spitzer and discovered they were made to a high-priced prostitution ring, an unnamed law enforcement official told the Associated Press (AP) news agency.2. According to the NYT, Spitzer's name was allegedly discovered in court papers filed in the criminal investigation of four individuals allegedly involved with the prostitution ring:
Mr. Spitzer’s involvement with the prostitution ring came to light in court papers filed last week, the officials said, as federal prosecutors charged four people with operating the service, Emperor’s Club V.I.P. Mr. Spitzer was caught on a federal wiretap discussing payments and arranging to meet a prostitute in a Washington hotel room last month. The affidavit, which did not identify Mr. Spitzer by name, indicated that he had used the prostitution service before, although it was not clear how often.So what was the impetus for the investigation? Did it start by the FBI's investigation into an ongoing prostitution ring, and Spitzer just happened to be swept up in it? Or did the banks' contact to the IRS cause it to begin investigating Spitzer specifically, which in turn led to the investigation of the prostitution ring?
If it began as an investigation of Spitzer, several questions must be answered. First, why is it that any banking transaction was suspect enough to warrant notifying the IRS? Surely $4,000 expenditures every now and then are not so extraordinary that the federal government must get involved. What about the transactions was suspect? Did they think that Spitzer was evading taxes? Surely not, since he's a public official and has significant disclosure requirements above and beyond the average taxpayer.
If it all began as a result of an investigation of the prostitution ring, how and when did the "suspicious" banking transactions become relevant? Did the investigators have some circumstantial evidence that Spitzer was patronizing prostitutes but needed to dig into his financial records to see if any payments confirmed those accounts? If so, wouldn't it be a bit of a twisting of facts to say that the bank brought them to the attention of the IRS, and not the other way around?
That Spitzer made so many powerful enemies cannot be disregarded when looking into this matter. The reality is that an obscene number of lawmakers make use of prostitutes' services on a regular basis, as do corporate heads - if this were not the case then there would be no such thing as $4,000 hookers, much less so-called "high class prostitution rings." That Spitzer is the lone public figure to be fingered in this investigation should speak volumes. The sketchy facts surrounding the origins of this investigation are even more telling.
Again, no defense for his actions, if the allegations are true. However, it is a private misdeed. What is more important: (1) In judging Spitzer's character, how has he conducted himself in office and what he has done to serve the public in his public capacity?; and (2) In judging the events at hand, how was the investigation brought about, how was it conducted, and what are the end results of the investigation in its entirety? The investigation and the results are a public concern because it was conducted 100% with public funds and in the public interest. Spitzer is of interest only because he is a public official and our only interest in him is his conduct in that position.
I hope Spitzer is as wise in confronting this issue as he's been in all of the other tasks before him; I hope he asks the hard questions and finds out how this came about, and defends himself - not defends his actions, but brings light to the unfathomable breach of public trust that was, no doubt, the impetus behind the investigation.
Let's face it - if Spitzer goes down, if he resigns and never again holds public office, we all lose. As common citizens, we will have lost an invaluable insider, one who was willing to stand up to the wealthy and powerful and fight for what was right. If Spitzer resigns, the bad guys will win yet again.
Wagging the Dog
Yesterday the New York Times broke the story about NY Governor Eliot Spitzer's alleged involvement with a prostitute in a Washington hotel room. From what we know, this information resulted from a federal wire tap. Spitzer, going by the name "Client 9," was recorded in a telephone call in which he allegedly ordered the girl in mid-February.
Am I the only one that finds it curious that the FBI and IRS, under the authority of a 98-year old law, are expending untold amounts of federal taxpayer money to investigate a high-class prostitution ring? Why is it that said prostitution ring just happened to count Eliot Spitzer among its clients, and why is Spitzer the first (and perhaps only?) name announced in connection with it? Given that this prostitution ring operated out of New York and apparently serviced D.C., surely there are business titans and other politicos involved. Aren't their names worthy of disclosure?
It seems rather clear to me - Spitzer pissed off a lot of wealthy, powerful people and those people wanted to make sure he paid. His crackdown on Wall Street was maverick; his pursuit of payola and the major record labels/radio stations involved was damn near suicidal. However, he did both because they were the right things to do.
I have admired Spitzer from afar for both of these matters; he seemed willing to do what no other member of the executive or legislative branch had the stomach for. He conducted himself as though he was beholden to no one other than the people. He did more good for this country on behalf of the state of New York than most people will ever know.
And now media outlets throughout the country are calling for his head, as are, of course, the Republicans. Is it any wonder that the news media so vehemently calling for his resignation also felt, directly or indirectly, the sting of his investigations in his previous life in the attorney general's office?
Something about this whole mess stinks - it's reminiscent of the Tennessee Waltz investigation in my home state a couple of years ago, where a number of Democratic state legislators were wrapped up in a bribery sting. Details are somewhat sketchy; a fake company was set up and law makers were induced into taking bribes to vote on legislation benefiting the fake company. I never learned exactly why the investigation was launched, or by whom. However, what I do know is that it was conducted by the FBI and some very prominent Democrats fell from grace as a result.
I am by no means excusing Spitzer's actions. However, I'm also realistic enough to know that politicians will be politicians. Absent being a murderer, rapist, drunk driver, Ken Lay, or other serious criminal whose actions impact the lives of others, I don't really give a damn. It sounds cliche, but what Spitzer does on his own time is his own business. While I question the circumstances and methods of Tennessee Waltz, bribery is a violation of the official's office and directly impacts the people. Having sex with a prostitute, however, is 100% personal and, in the grand scheme of things, a modest transgression; the consequences of its disclosure will do unfathomable harm to him personally and to his family. He will pay a hefty price where a price should be paid - at home.
However, how does this impact him professionally? Why is it that we're so quick to toss Spitzer out on his ear, and yet the very real criminal happenings at the White House and in other areas of the executive branch aren't even mentioned in the same breath as resignation?
Consider this US News blog posting, which identifies all the stories regarding Spitzer, most of which point to his unfitness and inability to continue to serve, and then the next story is entitled, "Democrats Sue For Bush Aides' Testimony." This article is about the Democrats trying to get at the heart of some U.S. Attorney firings. Not coincidentally, the judge set to hear the case is a Bush appointee and also heard the case brought in an attempt to reveal documents pertaining to Cheney's secret energy planning meetings (ruled in favor of the VP). Oh yeah, and this same judge is also a member of the FISA court. All three of these topics involve very, very serious breaches of the public trust, violations of law that go to the core of this country's existence, and the only head to role has been Alberto Gonzalez, and even it had to be hacked and sawed and twisted for months before it came loose.
[Speaking of FISA, I wonder if the warrant the FBI obtained to wiretap Spitzer's phone was issued as a part of the FISA process; if the FBI engaged in its dragnet form of listening in, found the goods, then asked FISA to permit its investigation going forward.]
Spitzer, a politician who actually did some measurable good in his time, will likely get swept to the side by the drumbeat of the old guard, all under the guise of restoring honor and integrity to public office; in reality, all we will have done is extinguished one of the brightest and most ardent public advocates that American politics has seen in 40 years. Like MLK, JFK and his baby brother, Bobby, we'll never know what great things this country could have accomplished.
Am I the only one that finds it curious that the FBI and IRS, under the authority of a 98-year old law, are expending untold amounts of federal taxpayer money to investigate a high-class prostitution ring? Why is it that said prostitution ring just happened to count Eliot Spitzer among its clients, and why is Spitzer the first (and perhaps only?) name announced in connection with it? Given that this prostitution ring operated out of New York and apparently serviced D.C., surely there are business titans and other politicos involved. Aren't their names worthy of disclosure?
It seems rather clear to me - Spitzer pissed off a lot of wealthy, powerful people and those people wanted to make sure he paid. His crackdown on Wall Street was maverick; his pursuit of payola and the major record labels/radio stations involved was damn near suicidal. However, he did both because they were the right things to do.
I have admired Spitzer from afar for both of these matters; he seemed willing to do what no other member of the executive or legislative branch had the stomach for. He conducted himself as though he was beholden to no one other than the people. He did more good for this country on behalf of the state of New York than most people will ever know.
And now media outlets throughout the country are calling for his head, as are, of course, the Republicans. Is it any wonder that the news media so vehemently calling for his resignation also felt, directly or indirectly, the sting of his investigations in his previous life in the attorney general's office?
Something about this whole mess stinks - it's reminiscent of the Tennessee Waltz investigation in my home state a couple of years ago, where a number of Democratic state legislators were wrapped up in a bribery sting. Details are somewhat sketchy; a fake company was set up and law makers were induced into taking bribes to vote on legislation benefiting the fake company. I never learned exactly why the investigation was launched, or by whom. However, what I do know is that it was conducted by the FBI and some very prominent Democrats fell from grace as a result.
I am by no means excusing Spitzer's actions. However, I'm also realistic enough to know that politicians will be politicians. Absent being a murderer, rapist, drunk driver, Ken Lay, or other serious criminal whose actions impact the lives of others, I don't really give a damn. It sounds cliche, but what Spitzer does on his own time is his own business. While I question the circumstances and methods of Tennessee Waltz, bribery is a violation of the official's office and directly impacts the people. Having sex with a prostitute, however, is 100% personal and, in the grand scheme of things, a modest transgression; the consequences of its disclosure will do unfathomable harm to him personally and to his family. He will pay a hefty price where a price should be paid - at home.
However, how does this impact him professionally? Why is it that we're so quick to toss Spitzer out on his ear, and yet the very real criminal happenings at the White House and in other areas of the executive branch aren't even mentioned in the same breath as resignation?
Consider this US News blog posting, which identifies all the stories regarding Spitzer, most of which point to his unfitness and inability to continue to serve, and then the next story is entitled, "Democrats Sue For Bush Aides' Testimony." This article is about the Democrats trying to get at the heart of some U.S. Attorney firings. Not coincidentally, the judge set to hear the case is a Bush appointee and also heard the case brought in an attempt to reveal documents pertaining to Cheney's secret energy planning meetings (ruled in favor of the VP). Oh yeah, and this same judge is also a member of the FISA court. All three of these topics involve very, very serious breaches of the public trust, violations of law that go to the core of this country's existence, and the only head to role has been Alberto Gonzalez, and even it had to be hacked and sawed and twisted for months before it came loose.
[Speaking of FISA, I wonder if the warrant the FBI obtained to wiretap Spitzer's phone was issued as a part of the FISA process; if the FBI engaged in its dragnet form of listening in, found the goods, then asked FISA to permit its investigation going forward.]
Spitzer, a politician who actually did some measurable good in his time, will likely get swept to the side by the drumbeat of the old guard, all under the guise of restoring honor and integrity to public office; in reality, all we will have done is extinguished one of the brightest and most ardent public advocates that American politics has seen in 40 years. Like MLK, JFK and his baby brother, Bobby, we'll never know what great things this country could have accomplished.
Monday, March 10, 2008
How Do Artists Get Paid in Unconventional Delivery Services?
Bruce Houghton asks the question today: How much of the money that labels are making on deals like imeem, Spiral Frog and YouTube will ever make it to the artists? For instance:
This is usually one seemingly innocuous sentence in what are often 40-page contracts, though the impact could be millions of dollars. To the extent that ad-supported and other unconventional distribution methods become more prevalent, labels will profit and the artists will get nothing.
This is not a case of a new distribution method not accounted for in the old-school record deals - they have always been fairly good about describing future types of sales that aren't currently known. For instance, downloads were easy and, in fact, under a lot of older deals the artists get a huge benefit - a service offering downloads has only licensed that right from the label, and artists typically get paid 50% on a license, so some are getting nice checks from iTunes sales. This loophole has been closed and almost every label now defines downloads as a traditional sale and thus, payable at the standard record royalty. Nonetheless, a sale is a sale, and artists are getting paid.
However, there is no similar provision for ad-supported revenue. Sure, they might (and should) be considered licenses and, thus, compensable pursuant to the general license provision in the record deal. The problem is the meddling "specifically attributable" language - unless imeem provides a detailed accounting of every recording that it transmits, the artists are out of luck. Moreover, depending on the language of the record deal, even if the labels get a detailed accounting of uses, the artists may still not get paid because the label gets paid on the whole. If the dollars aren't tied to the transmission, the artist may get nothing.
Fixing this is up to the artist's attorney; this is a provision that I've focused on for a couple of years, with varying degrees of success. However, as ad-supported services become more prevalent, artists must be all the more persistent in fighting for their right to be paid on these uses.
Each service has made their own unique deals with labels and publishers for compensation. Some pay a fee per play or download. Others share a portion of ad revenue received; and rumors have a new MySpace music service trying to compensate labels with stock options.More concerning than what the artist deals don't say is what the deals do say. Every single record deal I've ever seen has a convenient little clause, providing that regardless of how the rest of the contract could be interpreted, if the label earns money that is not specifically attributable to the artist's masters, the artist has no right to that income. Therefore, if the label licenses it's entire catalogue, or if the label agrees to get paid a flat fee or royalty payment for any and all use of the recordings it controls, then the individual artists get nothing.But how much of that money will find its way to the artist and how many of these new deals conform with existing label and publishing contracts or the statutory rate legally due songwriters? I don't know of a single artist contract that mentions stock options or ad revenue as acceptable compensation.
This is usually one seemingly innocuous sentence in what are often 40-page contracts, though the impact could be millions of dollars. To the extent that ad-supported and other unconventional distribution methods become more prevalent, labels will profit and the artists will get nothing.
This is not a case of a new distribution method not accounted for in the old-school record deals - they have always been fairly good about describing future types of sales that aren't currently known. For instance, downloads were easy and, in fact, under a lot of older deals the artists get a huge benefit - a service offering downloads has only licensed that right from the label, and artists typically get paid 50% on a license, so some are getting nice checks from iTunes sales. This loophole has been closed and almost every label now defines downloads as a traditional sale and thus, payable at the standard record royalty. Nonetheless, a sale is a sale, and artists are getting paid.
However, there is no similar provision for ad-supported revenue. Sure, they might (and should) be considered licenses and, thus, compensable pursuant to the general license provision in the record deal. The problem is the meddling "specifically attributable" language - unless imeem provides a detailed accounting of every recording that it transmits, the artists are out of luck. Moreover, depending on the language of the record deal, even if the labels get a detailed accounting of uses, the artists may still not get paid because the label gets paid on the whole. If the dollars aren't tied to the transmission, the artist may get nothing.
Fixing this is up to the artist's attorney; this is a provision that I've focused on for a couple of years, with varying degrees of success. However, as ad-supported services become more prevalent, artists must be all the more persistent in fighting for their right to be paid on these uses.
Subscribe to:
Posts (Atom)