Dealing with Legal Issues in the Music Industry

Legal issues that face the music industry are no different from what they were over 50 years ago. Since, the digital era has become more of the daily norm we find that the legal issues have started spiral out of control. In the news now are so many different cases involving trademark Infringement copyright infringement, piracy, trade secrets, clearance issues and publicity Rights.

The music industry can be a complex industry especially if do not understand the different issues that are face by the producers, record companies, manager, promoters and artists.  As a manager has to be able to understand music publishing, copyright and performing rights agency. Have the knowledge and the team in place will ensure that everyone is successful in the music industry.

I was able to listen to several podcasts that dealt with some of the legal issues facing the music industry. Most intriguing was Chris Castle an attorney specializing in issues surrounding the music industry. The music industry podcast hosted at the Loyola University in New Orleans. To hear a music attorney speak so boldly of the music industry was unbelievable. Chris stated “file sharing of mp3 would be able to be tracked if you place a watermark on them. Doing so you would be able to monetize the sales of your mp3.” During the conversation, he highlighted one of the first piracy cases, which was against Napster.

Berklee College of Music and MIDEM, in association with the Berkman Center put together another podcast called Rethinking Music, Part I – Creativity, Commerce, and Policy. The guest on the show were Allen Bargreded, and Chris Bavitz,. According to Radio Berkman, “The symposium will focus on economic and policy concerns that dictate the viability of creative industries.”

On the show, they highlighted some of the topics that were going to be discussed such intellectual property, the new business model that is emerging as well as proposals on policy proposals and business models. Of course, one of the main topics discussed on the podcast was about how the Internet has changed how we view TV, film, music, news, and books. Electronic piracy has plague every entity on the entertainment industry. The industry has been scrambling trying to figure how to capitalized and develop new business models to stay ahead.

I had the opportunity to listen to another podcast on music publishing. This podcast hosted by Loyola University in New Orleans and featured Mike Sammis, VP and CFO of Universal Music Publishing. Mike Sammis stated, “Music publishing is the business of acquiring, protecting, administering and exploiting the rights in musical compositions. It is a business based on the songs.”

He also stated “Songwriters enter into publishing, copublishing, or administration agreements with music publishers. In exchange for acquiring the copyright a portion of the copyright, or a percentage of the revenue earned from the exploitation of the musical composition, the music publisher seeks opportunities to exploit the musical composition, collects revenue from exploitation, and pays and accounts to the songwriter. The music publisher share is usually 50%. Recording artists assign their copyrights to a record label in exchange for a negotiated royalty.”

The beauty of music is the creation of where it comes from, so be unique and different!

Sing, write, compose and produce from your heart!

Musicians & Money

We hear about celebrities in the news all the time not paying their taxes.  You asked yourself how could they not pay their taxes? We asked ourselves why are they immune to paying taxes; we pay taxes on our income every time a paycheck is cut or at the end of the year.  Most people look forward to December of every year because it’s time to file our taxes and hopefully get a refund.  Well its evident that celebrities and taxes don’t go hand and hand.  They leave this responsibility up to their accountant. Whenever you see them in the news they say my account does the book and you asked yourself why didn’t you check behind them?  It’s your money not theirs.  They will get paid regardless because of the work they do for you. The Federal government has been and will continue to go after these celebrities and get the back taxes.  We have heard several reasons as to why they didn’t pay their taxes.  We all know that if you work in the United States you will pay taxes no matter what.

According to TMZ, several musicians are in the news for not paying the federal government. “Singer Lauryn Hill pleaded guilty to not paying federal taxes on more than $1.5 million earned over three years. Other notable celebrities in the news lately are R. Kelley who owes $4,848,072.11, Lionel Richie who owes 1.1 million, Robin Thicke and wife Paula Patton owe $492,583.49, Dionne Warwick owes 2.6 million dollars, and American idol winner Ruben Studdard owes $180,216.73.  Even musicians that have died still have tax liens against their estates such as Rapper Heavy “D” and Suge Knight.

I was able to find an article on the web about musicians and taxes and how they don’t mix.  According to Peter Jason Riley, CPA  “Taxes and administrating the business of music are often last on the list of concerns for the working musician. Most working musicians are considered "self-employed" in regard to filing their taxes. In a legal and taxpaying sense this means that your "business" as a musician and you as an individual taxpayer are one and the same.”

We are seeing another legal battle in the news lately and it’s how much is a song that is downloaded via digital music websites. Rapper Eminem is not the one suing those digital download services, but the record label that discovered him.   Even though he did not bring suit he will still benefit from the case.  According to Ben Sisario “some of the biggest beneficiaries of the case may be thousands of older artists who have not released an album in decades.”  This was huge win for some of the older artists since they will benefit from this decision.  Most of these artists and their estates are still collecting royalty payments and every penny will add up for them.  The moral of this case is to pay attention to what you sign and what you are due.  Digital downloads are where the music industry is going now and you need to insure you are given every penny that is owed to you as well as to your estate in later years.

          I spoke on performance rights organizations and what they do.  However, in the news the performance rights organizations are now going after nightclubs and bars.  One in particular in the news is that The American Society of Composers (ASCAP) filed multiple actions against several business that are not obtaining the required licenses to play music of the artist that they represent.  According to an article in the Eagle Tribune of North Andover, MA “in each of the cases filed today, the business or establishment has publicly performed the copyrighted musical works of ASCAP's songwriter, composer and music publisher members without obtaining a license from ASCAP to do so. These establishments then refused to acquire a license and continued to perform ASCAP members' music without permission, resulting in the filing of the infringement actions.” 

The Performance Rights Organizations are in the business to collect royalty payments on behalf of the artist.  This is how the artist gets paid.  So if an establishment really thinks they can play your copyrighted music in their business, then they need to think again.  One of the questions that was posed by one of my artists is why do I have to register with a performance rights organization and I stated this is how you will get paid.  They are there to watch and pay attention to the music industry and what is going on.  You as an artist are entitled to these royalty payments.  ASCAP is just one of the performance rights organization that I mentioned. Have your manager do their research and find out which one is best suited for you as an artist.

The beauty of music is the creation of where it comes from, so be unique and different!

Sing, write, compose and produce from your heart!