In 2015, is there a future for the entrepreneurial artist manager? – 23/03/2015

Introduction

The battle between creativity and commerce is one that every artist will encounter when they start to attract interest from the public. The resulting commodification of that artists work then has to be dealt with professionally and securely. This is the role of the Artist Manager, to plan strategically in order to best exploit and generate interest in their client/s whilst keeping every single aspect of their careers closely monitored (Harrison, 2014, pp.31-61).

The variety of different business deals and problems encountered by managers has changed vastly over time in an ever shifting industry driven by technological change. Artists are now able to create music themselves without the need for label backing, on modest costs, using readily available yet highly sophisticated equipment. Social Media then allows artists to build a fan base for little or no cost and earn a sustainable wage through online distribution (Evans, 2014).

This situation has led to questions being asked of the value of the artist manager in today’s market, and if business savvy artists need someone behind the scenes pulling the strings. This essay hopes to find the way forward for artist managers in the 21st century in an attempt to find their relevance in today’s industry.

A brief history of Artist Management

Throughout the 20th century, artist managers have been centre stage with people like Malcolm McClaren, and Peter Grant grabbing almost as many headlines as the artists they represented. One of the key figures in this period was manager of The Rolling Stones, Andrew Loog Oldham, who details a shift in management style from the mid-sixties; “In the ’70s, a different kind of manager was required — a hard-nosed money collector. Acts had their own vision. In the ’60s, we provided them with that vision.” (Loog Oldham, 2014)

This could certainly be said of the heavy handed approach by Led Zeppelin’s manager Peter Grant. He became famous for his intimidation tactics towards bootleggers, and his fierce negotiations with promoters leading to a 90/10 split in Led Zeppelin’s favour on tours (Allen, 2014 pp. 31-46).

However, the situationism applied by Malcolm McClaren in the making of The Sex Pistols, that impacted on the whole UK punk scene, was closer in approach to that of the vision led managers of the 60s (Simpson, 2010). The “Svengali” managers of the 1960s were exemplified by London star-maker, Larry Parnes. Parnes took working class youths, dressed them up in flamboyant clothing and had them sing interpretations of American rock’n’roll music under exciting pseudonyms such as “Billy Fury” and “Vince Eager”. The “Svengali” approach to management can still be seen today with the successes of Simon Fuller, which could point toward this management style being a way forward in the contemporary market (stratobuddy, 2010).

The Decline of traditional Record Labels in the 21st century

The decline in revenue from recorded music sales has led to a shift in management priorities as managers feel that their influence extends far beyond their now industry standard 20% commission on the contractually stated areas of Recording, Publishing and Live income (Riches, 2012 pp. 24-28). As the industry moves forward, managers are looking at different ways to earn a living from artist’s successes, especially as manager’s work for the artists and could potentially be fired at any time so need to protect their own interests. One of these ways is to enter joint ventures with prospective artists and start businesses together, instead of just signing a traditional management contract. This would involve co-ownership of any available rights with the artist in question. This may work in some circumstances, but artists should be wary of any such deal, especially when major labels also look to take a share of all available income with 360 degree recording deals (Riches, 2012 pp. 15-17).

In the 21st century, the lines between the services offered by labels and managers will potentially become more blurred. The merger between Cooking Vinyl and Music Manager John Black to create Black Gold management is just one example of how labels and managers are forming partnerships. This particular deal will allow the management company to benefit from the A&R (artist & repertoire) and marketing departments of the label at an early stage but leaves the company free to partner artists with other labels/publishers should they see fit (Music Business Worldwide, 2015).

Simon Napier-Bell sees the role of the manager now as a developer and part A&R man. In an interview with music week, Napier-Bell argues that major labels are still the power players in the music industry holding most of the places in the top 20 in both the USA and UK. He also goes on to say that the way the internet has allowed artists to grow and develop without major label backing is a positive thing for the industry as in his opinion “Artistic development was always better in independent hands, rather than corporate, so it’s actually a big step forwards” (Napier-Bell, 2015). If this is to be the way forward, perhaps the re-evaluation of the management role is fair, as they are becoming more crucial in marketing an artist’s output at the earliest stages of their career. If this relationship is to become the norm however, it is of vital importance that the legal principles are correctly observed. Potential production and/or recording contracts offered by management companies must protect artist’s creative work. They cannot allow managers to “double-dip” by taking a percentage of revenue from a single source twice, once as a manager’s cut and then again as the label/publisher (Riches, 2012 pp. 15-17).

Established artists do now have the ability to bypass the major labels/publishers structures completely, and retain the rights in their compositions and recordings by utilising label services groups such as Kobalt, who have financial backing from tech companies the size of Google [Ingham, 2015]. Jazz Summers proves the importance of the alternatives Kobalt offers as he was able to reduce the percentage taken by a record label on one of his artists live income from 20% to 12.5% through the threat of using Kobalt over a traditional label deal [Summers, 2014]. The transparency offered by Kobalt through the use of data that can track royalty payments over 700,000 revenue streams is a tantalising prospect for the 21st century manager and one that could put him centre stage in his artists career, accounting to them like no record label has previously been able to (Collins, 2015). 

The importance of Brand Creation

In the modern music industry, Patrick Wikstrom proposes the idea that the importance of how people interact with the online world lies in the context and not the content of its services. He states that Spotify’s success is down to “the service’s features and structure are superior to those of its competitors” (Wikstrom, 2013 pp. 177) While this may be the case in the online world, the same arguably cannot be said for one of the music industry’s most entrepreneurial projects of recent years. Tyll Hertsen (2011, quoted by Martin, 2011) declared “Beats” headphones by Dr. Dre as “among the worst you can buy” yet the company’s sale to Apple in 2014 was worth a reported $3 billion (Moore, 2014). This is a perfect example of how a fresh idea by an artist that is branded correctly can make waves in the modern music industry. The product identified a gap in the market for fashionable and high quality headphones to be worn as a statement that people latched onto (Martin, 2011). This same model can be seen when looking at Simon Fuller’s success with The Spice Girls and S Club 7 who was quoted in a 2003 guardian article stating “I reflect what’s out there, and if there’s a demand for something I recognise it.” (Fuller, 2003) Fuller’s success went on and spread into the realm of television with the huge brands of Pop Idol and American Idol and all of these point towards the importance of brand power in today’s industry.

Josh Brandon from Insanity Management believes that when it comes to his artists “the music is secondary, it’s the lifestyle or brand that the artist represents is what people buy into” (Brandon, 2015). Perhaps this is one of the key areas for development and could lead to the widespread adoption of artist-specific subscription services. The mass amount of content and slick “context” of an on-line streaming service like Spotify allows consumers to listen to an incredible amount of music at the touch of a button. The potential for this type of service has been identified by Bandcamp, a platform that allows artists to sell their music direct to fans with no middle man. Their next step of development is to provide acts with a self-managed subscription service, where the artists themselves dictate the price-point and availability of content direct to their fans (Williamson, 2014).

One successful brand that has already capitalised on such a service would be Jack White’s subscription service run through his record label, Third Man Records. Platinum membership to the service entitles the consumer to a quarterly package of vinyl records and bonus items, as well as an exclusive on-line members area where video interviews are held with Jack White and other exclusive content can be downloaded (Third Man Records, 2015). This approach, along with marketing stunts such as recording the world’s fastest vinyl record, liquid filled vinyl records and the release of the 2014 album “Lazaretto” on the gimmick filled “Ultra LP” format resulted in Lazaretto being the fastest selling vinyl LP since records began (Caulfield, 2014)

By taking the wisdom of Simon Fuller and identifying what brand value an artist has and developing that, music managers could still retain their worth in the industry today. This would allow artists to concentrate on their musical output, whilst the managers seek to identify ways for fans to buy into artists as lifestyle choices, not just by purchasing their latest record.

21st Century Technological advancements and opportunities

Technology has always been a force that has dictated change in the music industry and led to new ways of generating revenue. One incredibly innovative way that established artists can generate revenue through streaming is through the placement of retroactive advertisements in the YouTube videos. This new technology means that brands can now place ads in music videos that weren’t there in the first place and is a way that they can ensure their message is seen that will benefit the brand visibility and the artist financially (Newman, 2014). 

The app world is another area of potential development in the 21st century for innovative ways of thinking that could open up a whole new world of possibilities for artists and managers. Bjork’s Biophillia application provided an immersive experience that allowed listeners to actively participate in a visual and aural world they could interact with, rather than just listening passively (Beaumont-Thomas 2014). Although this may not be the right approach for more mainstream pop acts, an application that focused on a specific artist rather than album could be developed for this audience. Managers could look into partnering with tech companies to create artist specific apps that are purchased and subscribed to. In return, exclusive premium content would be unlocked and back catalogue works readily available to stream/download, as well as press, video interviews and regularly updated social media channels.

Because of the changing nature of the industry, what is required for an artist’s success is highly based on social media metrics and online “buzz” in order to entice people to get involved with their creative output (Peckham, 2015). It is through applications like Soundcloud and Bandcamp that music can be shared immediately and for free which is becoming key in establishing an artist’s career early on. Music managers need to look further than just the music-focused apps already available though and encourage their artists to adopt and experiment with other platforms. Video streaming service “Meerkat” could provide a key insight for fans into an artist’s life on the road for example. Partnerships could be struck with this service to stream live shows or live chat/interview sessions could be held with competition winners. The services selling point is the here and now and immediate interaction, as the video is not saved after it is streamed, once it’s over, it’s over (Peckham, 2015). It is through the creative use of new platforms like these to showcase artist’s talents, and the insight provided by management teams that will see acts thrive going forward.

The Live music industry and its importance today

The potential revenue from the live music industry is one of the most immediate ways an emerging artist can make their career sustainable through performance fees, live performance publishing income and intuitive merchandise ideas (Allen, pp. 85-98). It is for this reason that the management team of an artist must identify this quickly and capitalise on it appropriately, whilst being careful not to over expose their act. This means they have to act in the best interest of their client and not of themselves, known as their “Fiduciary Duty”. The stresses of earning a living as an artist can be seen when looking at the Martin-Smith VS Williams case when Robbie Williams decided to leave Take That. Martin-Smith sued Robbie Williams for unpaid commission and Williams argued that he did not have to pay because Martin-smith had failed in his Fiduciary duty to him personally. Williams stated that Martin-Smith advised the rest of the band to sack him, but the rest of Take That and Martin-Smith said Williams left of his own accord. The court found that, Martin-Smith had advised Take That’s members individually to the best of his abilities, the interests of the group as a whole were protected and he therefore did not sack Robbie Williams. Martin-Smith was therefore not in breach of his Fiduciary duties and was paid the unpaid commission from Williams (Harrison, 2014, pp.31-61). Disputes like these still arise today and constant media exposure and touring commitments have led to One Direction star Zayn Malik to be signed off with stress from the bands activity. It would be interesting to see if he takes action against Modest Management (Modest Management, 2015), because he feels they failed in their Fiduciary duty to him (Guardian Music 2015).

One example of an entrepreneurial yet controversial approach to the live music industry can be seen when looking at the secondary ticketing market. The demand for entrance to a live show by a highly successful pop/rock act, who’s audience quantity outnumbers the tickets available, opens up a new potential revenue stream on the free market. Some people are able and prepared to pay a significantly higher price than face value to guarantee entry to a live show and this is what the secondary market provides. Promoters have been able to allocate tickets to secondary resellers and take a cut on the profits. Channel 4’s dispatches documentary stated that 1865 tickets allocated for SJM promotions for a Coldplay show sold for £229,230.51 which is around £123 per ticket and almost double the £65 face value and earned 90% of that mark-up (JustMe STKK 2012). Although this is a way to maximise revenue on live shows in a market where the price is dictated by demand, it is seen as unethical and has been met with calls for transparency by managers. Jon Webster, chief executive of the Music Managers Forum, told the BBC: “It reflects badly, at the end of the day, on the artists – probably more so than anyone.” (BBC, 2012).

This has led to legislation put through in the UK to require the face value, seat number and any applicable restrictions to be stated when put on sale though anonymity of the seller has been upheld (Hanley, 2015). The legislation will still allow promoters and artists to reap the benefit of the secondary market if they choose to do so, but the possibility of bad press could result in managers failing their fiduciary duty to their clients by damaging careers in an attempt to maximise revenue.

For artists that already have a following, the secondary market can be avoided through direct to fan sales platforms like Music Glue (Music Glue, 2015). Through a service like this, the artist and manager can set their own price point for their shows and sell direct to their most passionate fans without booking agencies or promoters getting in the way and taking percentages from the earnings. This empowers artists and managers to have their own live schedule and tour when and where they want through using data collection services and is exemplified by acts the size of Mumford & Sons using these new platforms (Reynolds 2012, pp. 312).

Another successful artist in the live area is Skrillex and Jazz Summers puts him forward as an artist that the industry could learn from; “[he] makes these tracks, puts them out, doesn’t worry about whether they’re on a label or not on a label. Then he does 300 gigs a year for £50,000 a night or whatever it is.” (Summers, 2014) Although this is clearly part exaggeration, it gives an example of a key industry figure identifying a trend that is leading to recorded music becoming a marketing tool for artists to earn money through the live sector. This sentiment is echoed by Adele’s Manager, Jonathan Dickins, as far back as 2008 when he said; “when you’re looking at people who are willing to pay more to see an artist live than they are to buy a CD or download an album then that tells you a lot” (Dickins, 2008).

Conclusion

Recorded music is now readily available for free and some industry figures like Jim Griffin, founder of Choruss music believes that “Sound recording’s economy is now a tip jar.” (Griffin, 2009) Griffin’s failed company believed a way forward could be to bundle in the cost of accessing recorded music at ISP (Internet Service Provider) level but the scheme stalled as it could not get licenses for enough content. (Rosenblatt, 2011) The ‘free’ access to music this would have facilitated, along with the significant stature of legal streaming services like Spotify and YouTube, further ads to the belief that the way forward for artists and managers is shifting. It is no longer through selling significant amounts of recorded music, but through finding innovative ways to license it through alternative media platforms that are not specifically music based, like Facebook and even on-line messaging services like Snapchat (Peckham, 2015)

The role of the contemporary music manager is to work with their artists, identify their target audience, and partner up with the relevant brands, tech companies and marketing teams at the time that is right for them. “The music is secondary, it’s the lifestyle or brand that the artist represents is what people buy into” (Brandon, 2015). If music managers can understand this and create worlds that fans want to engage with all year round, not just in the lead up to another album release, then artists can truly flourish. Technology that allows direct to fan engagement could open up a world of possibilities that would allow fans to be immersed in an artist’s activities like never before. The managers that service their acts fan base innovatively, and deliver content that has enriching cross format appeal, have the potential to provide an immersive and interactive experience that would benefit the entire music industry.

Reference List:

Allen, P. (2014) Artist management for the music business. 2nd edn. Amsterdam: Taylor & Francis.

BBC (2012) Viagogo defends sale of promoter’s tickets. Available at:http://www.bbc.co.uk/news/entertainment-arts-17151727 (Accessed: 23/03/15).

Beaumont-Thomas, B (2014) Bjork’s Biophillia becomes first app in New York’s museum of modern art. Available at: http://www.theguardian.com/music/2014/jun/12/bjork-biophilia-first-app-museum-of-modern-art-new-york (Accessed: 22/03/2015).

Brandon J. (2015) ‘UEL Guest Lecturer.’ Interview with Josh Brandon. Interview by Dave Wibberly for UEL, March, 2015, unpublished

Caulfield, K. (2014) Jack White’s Lazarreto Debut’s at No. 1, sets vinyl sales record. Available at: http://www.billboard.com/articles/news/6121606/jack-white-lazaretto-debuts-billboard-200-sets-vinyl-sales-record(Accessed: 23/03/2015).

Collins, K (2015) Google Ventures bets on music publisher Kobalt in $60 million round. Available at: http://www.wired.co.uk/news/archive/2015-02/27/google-ventures-invests-in-kobalt (Accessed: 23/03/2015).

Dickins, J. (2008) ‘Untitled’. Interview with Jonathon Dickins. Interview by Kimbel Bouwman for Hitquarters.com, 14th July published

Evans, R. (2014) 7 things a Record Deal Teaches you about the Music Industry. Available at:http://www.cracked.com/personal-experiences-1288-7-things-record-deal-teaches-you-about-music-industry.html (Accessed: 22/03/2015).

Fuller, S. (2003) ‘I’m one of the best in the world.’ Interview with Simon Fuller. Interview by Caroline Sullivan for The Guardian, June, 2003, Available at:http://www.theguardian.com/culture/2003/jun/13/artsfeatures(Accessed: 23/03/2015).

Griffin, J. (2009) ‘Keynote at Digital Music Forum East.’ Interview with Jim Griffin. Interview by Bruce Houghton for Hypebot.com, 14th March published Available At:http://www.hypebot.com/hypebot/2009/03/transcript-jim-griffin-of-choruss-keynote-at-digital-music-forum-east.html (Accessed: 23/03/15)

Guardian Music (2015) Zayne Malik ‘signed off’ One Direction world tour to recover from stress. Available at: http://www.theguardian.com/music/2015/mar/19/one-direction-zayn-malik-signed-off-world-tour-stress (Accessed: 23/03/15).

Hanley, J (2015) Revised secondary ticketing laws passed by MPs. Available at:http://www.musicweek.com/news/read/revised-secondary-ticketing-regulations-passed-by-mps/061113 (Accessed: 22/03/2015).

Harrison, A. (2014) Music: the Business: Fully Revised and Updated, Including the Latest Changes to Copyright Law. United Kingdom: Virgin Books.

Ingham, T. (2015) Google Ventures pumps funds into Kobalt, leads $60 million investment round. Available at: http://www.musicbusinessworldwide.com/google-ventures-pumps-investment-into-kobalt/(Accessed: 22/03/2015).

JustMe STKK (2012) Viagogo – the Great ticket Scandal Available at:https://www.youtube.com/watch?v=G0PQIVQVVSI (Accessed: 23/03/15).

Loog Oldham, A. (2014) ‘Andrew Loog Oldham dishes on rock’s biggest movers and shakers’. Interview with Andrew Loog Oldham. Interview by Ken Sharp for Goldmine Magazine, September 2014, Available at: http://www.goldminemag.com/article/andrew-loog-oldham-dishes-musics-biggest-movers-shakers?4qL0410 (Accessed: 22/03/2015).

Martin, A. J. (2011) Beats Headphones with swagger (and lots of bass). Available at:http://www.nytimes.com/2011/11/20/business/beats-headphones-expand-dr-dres-business-world.html?ref=technologyhttp:/&_r=1 (Accessed: 23/03/2015).

Modest Management (2015) Available at: http://www.modestmanagement.com/one-direction(Accessed: 23/03/2015).

Moore, H. (2014) Apple buys Dr. Dre’s Beats for $3bn as company returns to music industry. Available at: http://www.theguardian.com/technology/2014/may/28/apple-buys-beats-dr-dre-music-streaming (Accessed: 22/03/2015).

Music Business Worldwide (2015) Cooking Vinyl Back New UK Artist Management Venture. Available at: http://www.musicbusinessworldwide.com/cooking-vinyl-backs-new-uk-artist-management-venture/ (Accessed: 23/03/15).

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Napier-Bell, S. (2014) ‘The Big Interview Simon Napier-Bell’. Interview with Simon Napier-Bell. Interview by Tom Pakinkis for Musicweek, September 2014, Available at:http://www.simonnapierbell.com/mweekFB.htm (Accessed: 23/03/2015).

Newman, J. (2014) Old Videos, New Ads: Advertising shocking next frontier. Available at:http://www.rollingstone.com/music/features/old-videos-new-ads-advertisings-shocking-next-frontier-20141104 (Accessed: 22/03/2015).

Peckham, E (2015) Envisioning Snapchat’s impact on music. Available at:https://medium.com/@epeckham/envisioning-snapchat-for-music-3a9e9069b41f (Accessed: 23/03/2015).

Peckham, E (2015) The New ‘Meerkat’ App is a win for music. Available at:https://medium.com/cuepoint/the-new-meerkat-app-is-a-win-for-music-a7452a1de2fc (Accessed: 22/03/2015).

Peckham, E (2015) Why Artist’s Managers are taking centre stage. Available at:https://medium.com/cuepoint/why-artist-managers-are-taking-center-stage-4c54f93b1e44 (Accessed: 23/03/2015).

Reynolds, A. (2012) The tour book: how to get your music on the road. 2nd edn. Boston, MA: Delmar Cengage Learning.

Riches, N (2012) The Music Management Bible: 2012. London: Music Sales

Rosenblatt, B (2011) The future of music, from blanket licenses to registries. Available at:http://copyrightandtechnology.com/2011/10/10/the-future-of-music-from-blanket-licensing-to-registries/ (Accessed: 22/03/2015).

Simpson, D. (2010) Malcolm McClaren Obituary. Available at:http://www.theguardian.com/music/2010/apr/09/malcolm-mclaren-obituary (Accessed: 23/03/2015).

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Summers, J. (2014) ‘All That Jazz’. Interview with Jazz Summers. Interview by Tim Ingham for Music Week, 31st January published, Page numbers 15-17.

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Should rights holders be financially compensated under section 28 of the 2014 amendments to the 1988 copyright designs and patents act?

Introduction

As of October 1st 2014, amendments to the 1988 Copyright Designs and Patents Act came into place. The changes were implemented in order to bring the act in-line with technological advancements and therefore, avoid stifling creative innovation in the 21stcentury [Newton, J. and Smith. H 2014]. One of the main changes to the act has allowed for the private and/or temporary copying of copyrighted works without infringement, which is a progression that the UK music industry as a whole has mostly welcomed. However, UK music industry bodies such as The Musicians’ Union (MU), The British Academy of Songwriters, Composers and Authors (BASCA) and UK Music have launched a judicial review challenging this alteration. They believe that this change is in violation of European Law, which states that copyright holders should be financially compensated if private copying is legalised [UK Music, 2015].

This essay will look at whether the amendment further devalues intellectual property in today’s world, or if it is simply updating old laws to keep pace with modern societal norms. Both sides of the argument will be analysed in an attempt to decide whether rights holders have a claim to compensation from legalised private copying, and what the outcome would mean for the wider music industry.

Format Shifting & Cloud Locker Services

Up until the change in copyright law in October 2014, the process of ‘Format Shifting’, taking music from a legally purchased CD and putting it on a computer or portable music player, was illegal. Because of this being general practice and widely used by the public yet against the law, the music industry was in support of rectifying this situation. As a side note, this seems like a far cry from the 1980’s where ‘Format Shifting’ from Vinyl to Cassette was ‘killing the music industry’, and that was without the internet and file sharing sites [Rogers, J. 2013]. However, in order to ‘format shift’ it is necessary to create another copy of the copyrighted material in question, something which only the copyright owner is allowed to do. Therefore a license needs to be granted and where a license has to be granted, financial compensation is due. This can be seen when mechanical royalties are paid in the manufacture of CDs [PRS for Music, 2015]. Allowing ‘Format Shifting’ to take place without any money going to rights holders could potentially have very negative implications on the wider music industry. This is proven when looking at 22 out of 27 EU member states who all do pay a financial levy through to rights holders through various methods from country to country, either on blank media, MP3 players, printers or personal computers [Kretschmer, M. 2011]. Without this levy, the French composers’ society overall revenue would be down 7 per cent, a significant amount at a time where songwriters revenue streams are being spread ever thinner [Orlowski, A. 2012]

Another sizeable problem about a lack of financial levy would be apparent when looking at cloud locker services. These services allow consumers to have access to their own music collection in a private locker stored on the internet, as well as being able to stream thousands of other recordings from that same location [Macmanus, R. 2011]. The changes to the act allow only individuals to make private and/or temporary copies, and says nothing about service providers or institutions. Therefore, an unlicensed service provider creating copies of music files on their servers would be an infringement of the act, even though the change in law is meant to aid the use and development of these services [Ballard, T. 2011]. This is problematic due to rights holders already having licensing deals in place to provide cloud locker services. If it is deemed that service providers are also exempt because of the fair use policy, it would not only jeopardise already existing deals, but could potentially negate the need for any future licensing to take place, thus resulting in a loss in revenue for the rights holders [Ingham, T. 2012]. 

The Ian Hargreaves Report

The report that signalled the first signs of these amendments being made was produced by Ian Hargreaves in May 2011 and recommended that an allowance for private copying be implemented to bring UK law into line with EU law. It stated that most EU member states had a levy scheme in place to compensate for this free use but also went on to say that due to the lack of consistency throughout the countries enforcing a levy payment, there was no economic argument for a similar system. The report enforced this stance by quoting the lack of evidence of harm done to rights holders through private copying as this was the normal use of most personal media devices [Hargreaves. I 2011].

Further on in the report, a point is made about a CD player with a built in storage device that enabled people to carry their entire collection with them. Because of UK law at the time, the advertisement had to carry the notice that by using the product, that user would be infringing copyright. This could be seen as a needless barrier to technological progress, and so the review proposed law that would reflect what consumers were already doing in this respect. However, it could be argued that the same principles could be applied to ‘Peer to Peer’ (P2P) file sharing websites, such as the recently taken down ‘Pirate Bay’ [Gibbs, S.(2014]. By using the aforementioned CD player as the example, P2P websites are only providing a consumer with a service or product, and it is up to the consumer to use that service or product within the confines of the law [Hargreaves. I 2011].

The report went on to further highlight that because the music industry was aware of ‘Format Shifting’, it would have already anticipated it. Therefore, it would be expected that the resulting revenue alteration would be factored into its pricing strategies already, negating the need for a levy system [Hargreaves. I 2011] On the other hand, Ann Harrison argues that technological advancements have forced the music industry into accepting price points dictated to them by large technological companies. This means that artists and labels are being backed into a corner, both by tech companies pricing strategies and government legislation providing no support from a levy legislation [Harrison. A 2014]

The Padawan v SGAE & Copydan Båndkopi (C-463/12) cases and what their outcomes could mean for UK law

One relevant case that dealt with the levy system was between a Spanish distributor of copying devices ‘Padawan’ and the Spanish levy collection society SGAE. Padawan refused to pay the levy charge on what they felt was a discriminatory system because the levy did not differentiate between private and company purchases [Guibault, L. 2013] It was therefore decided that when the charge is applied to anything capable of digital reproduction, even in cases where it is clear the equipment is being used to perform tasks completely unrelated to private copying, the law is unenforceable and payment should not be made. This decision lead to distinctions having to be made between devices sold to individuals and those sold to organisations and that a levy should not be placed upon devices purchased by companies. More importantly, it was also decided that it could be assumed that through an individual purchasing a device, they were going to use that device in order to make personal copies of files, hence the need for a levy at individual consumer level [Bonadio, E. 2010].

This outcome is particularly interesting when looking at the decisions Danish courts made in the Copydan Båndkopi (C-463/12) case that considered the use of the ‘de minimis harm’ (minimal importance) principle [Wolfe, L. 2015]. This case focused on mobile phones and memory cards as storage devices, and whether or not it could be assumed (like in the Padawan ruling) that private copying was taking place on the devices. The court decided that the compensation paid to rights holders must reflect the harm done to them, and that a legally obtained work being privately copied does not necessarily require fair compensation due to the small amount of harm done. This is because EU member states have significant power to apply or exclude compensation in situations of minimal harm to rights holders [Edwards, S. and Swimmer, N. 2014].

This shows that the amendments made to the act are within the confines of European law and so it is highly unlikely that a levy scheme will be put in place in order to compensate rights holders [Kostovo. N 2014]. The UK’s further reasoning for this decision is “on the basis that it is likely to have adverse impacts on growth and inconsistent with its wider policy on tax” [IP Federation 2012].

Conclusion, should fair compensation be given to rights holders?

Due to 22 out of 27 EU member states offering a levy system (albeit arguably flawed) it could be argued that not offering a similar compensation scheme is against the norm. Although due to the findings in both the Padawn and Copydan Båndkopi cases, perhaps it’s only a matter of time until EU countries withdraw the levy system in their territories. However, is there really only minimal harm done to rights holders in ‘Format Shifting’? Research has shown that the ability to copy a CD to a portable music device is worth 44% of the value of a basic MP3 player, that’s almost half the reason they are purchased [Oliver & Ohlbaum Associates, 2012]. If the general public value this process so highly and it is a societal norm, it is hard to see how it is not harming rights holders and that relative compensation should be paid. In a time where sales figures of recorded music are falling, the industry as a whole needs to adapt to the shift in revenue streams. Without the private copying revenue stream that is clearly valued so highly by consumers, creators stand to lose out on funds that could be integral to their continued creative expression. This could potentially be very harmful to the whole UK music industry, and the acts it prides itself in producing [Musicians Union, 2014].

Reference List

Ballard, T. (2011) Cloud Services and the private copying exception Available at:http://www.harbottle.com/cloud-services-private-copying-exception (Accessed: 06/01/15).

Bonadio, E. (2010) Fair Compensation and Private Copying Levy: ECJ stance in Padawan VS SGAE Available at: http://www.medialaws.eu/fair-compensation-and-private-copying-levy-the-ecj-takes-its-stance-in-padawan-v-sgae/ (Accessed: 06/01/15).

Edwards, S. and Swimmer, N. (2014) The New Private Copying Exception: The UK Music Industry Wants to Be Paid for It Available at: http://www.reedsmith.com/The-New-Private-Copying-Exception-The-UK-Music-Industry-Wants-to-be-Paid-for-It-12-15-2014/(Accessed: 06/01/15).

Gibbs, S. (2014) Swedish Police Raid Sinks the Pirate Bay Available at:http://www.theguardian.com/technology/2014/dec/10/swedish-police-raid-pirate-bay (Accessed: 06/01/15).

Guibault, L. (2013) Private Copying Levy: The Aftershocks of Padawan Available at:http://kluwercopyrightblog.com/2013/09/17/private-copying-levy-the-aftershocks-of-padawan/ (Accessed: 06/01/15)

Hargreaves. I (2011) Digital Opportunity A Review of Intellectual Property and Growth. Place of publication: Available at:http://webarchive.nationalarchives.gov.uk/20140603093549/http://www.ipo.gov.uk/ipreview-finalreport.pdf (Accessed: 06/01/15).

Harrison, A., 2014. Music – the business: the essential guide to the law and the deals 6thedition London: Ebury Publishing

Ingham, T. (2012) PRS Licenses Google Play In Europe Available at:http://www.musicweek.com/news/read/prs-licences-google-play-in-europe/052535 (Accessed: 06/01/15).

IP Federation (2012) Court Of Justice Case C-463/12 (Copydan Bandkopi) Available at:www.ipfederation.com/document_download.php?id=1364 (Accessed: 06/01/15)

Kostovo. N (2014) The Private Copying Exemption is here… To Stay? Available at:http://blogs.sps.ed.ac.uk/copyrightandcreators/2014/11/27/the-private-copying-exception-fit-for-purpose/ (Accessed: 06/01/15).

Kretschmer, M. (2011) Private Copying and Fair Compensation: A Comparative Study of Copyright Levys in Europe Available at:http://www.epip.eu/conferences/epip06/papers/Parallel%20Session%20Papers/KRETSCHMER%20Martin.pdf(Accessed: 06/01/15).

Macmanus, R. (2011) Heavenly Music in the Clouds: iTunes Match, Amazon Cloud Drive & Google Music Available at:http://readwrite.com/2011/11/14/heavenly_music_in_the_clouds(Accessed: 06/01/15).

Musicians Union (2014) MU, BASCA and UK Music Launch Judicial Review. Available at:http://www.musiciansunion.org.uk/news/2014/11/26/mu-basca-and-uk-music-launch-judicial-review/ (Accessed: 06/01/2015).

Newton, J. and Smith, H (2014) new and amended exceptions to copyright infringement. Available at: http://www.lexology.com/library/detail.aspx?g=560df4da-86c2-4a16-894f-ff44c89914c1 (Accessed: 06/01/15).

Oliver & Ohlbaum Associates (2012) the UK Music Consumer A Presentation for UK Music. OR Available at:http://www.impalamusic.org/grup/sites/default/files/pictures/attachedfiles/UK%20Music%20-%20OO%20Copyright%20Research%20Presentation%20Copy.pdf (Accessed: 13/01/15).

Orlowski, A. (2012) What’s Copying Your Music Really Worth to You? Available at:http://www.theregister.co.uk/2012/05/21/format_shifting_conjoint_research/ (Accessed: 06/01/15).

PRS for Music (2015) Retail Audio Products: AP1 and AP2 Licenses. Available at:http://www.prsformusic.com/users/recordedmedia/cdsandvinyl/Pages/AP1AP2.aspx(Accessed: 06/01/2015).

Rogers, J. (2013) Total Rewind: 10 Key Moments in the life of the cassette. Available at:http://www.theguardian.com/music/2013/aug/30/cassette-store-day-music-tapes (Accessed: 06/01/15).

UK Music (2015) Government Facing Judicial Review Challenge over Failure to Compensate in Private Copying Exemption. Available at:http://www.ukmusic.org/news/privatecopyingexception(Accessed: 06/01/2015).

Wolfe, L. (2015) Copyright Laws – What Is The Diminis Principle and Copyrights? Available at:http://womeninbusiness.about.com/od/copyrightlaws/f/FAQlaw-deminims.htm (Accessed: 06/01/15).

Is the 1988 Copyright Designs and Patents act relevant to the recognised music industry publishing norms?

Introduction

Over the past 20 years, there have been a number of high profile court cases concerning the ownership of copyright contained within recorded music. The outcomes of these cases have challenged the established music industry norms of copyright ownership, where the songwriter is deemed to be who first created the lyrics and melody of a piece [Free, D. 2002]. This ideology ignores the potential significance of other musicians involved in creating a recording that would be heard by the general public. The Copyright, Designs and Patents Act 1988 stipulates that copyright does not exist in a musical work until it is recorded in writing or in any other way [Copyright Designs and Patents act, 2013]. When interpreting this statement in it’s most literal sense, it can be seen that every time a musical work is recorded, a new copyright will be generated associated with that particular recording. This report will focus on the importance of reading the copyright law in this way, in an attempt to answer whether or not “All musicians featured on a popular music recording are entitled to an appropriate share and interest in the music publishing copyright of the work performed on that recording”.

Godfrey VS Lees, 1995

Robert Godfrey was involved with the group Barcley James Harvest in the 1970’s. As the bands “Resident Musical Director” he claimed to have joint authorship of six musical works featured on 2 of the groups albums, claiming to have made orchestral arrangements in 4 cases, and piano/organ accompaniments in 2 others [Domone, K. & Domone M, 2010].

Blackburn J. ruled that Robert Godfrey did indeed have a claim to the copyright on the 6 musical works but was stopped from revoking this license because of waiting for 14-years to claim [Arnold, J. 2009]. This is referred to as estoppel, which is a legal principle that stops claims from being granted if a claimant’s previous actions suggest he/she has accepted the position they were in previous to the claim.

Blackburne J. puts forward the following in his ruling:

“It well illustrates how little originality is required of a person’s contribution to a piece of music in order to attract copyright in the altered work”

[Arnold, J. 2009]

This is the correct reading of the 1988 copyright act as it focuses on how the contribution made to a recording can be very small yet still attract an interest in the recordings copyright to the performer in question. However, this completely disregards how the music industry works and if this interpretation were applied to every existing musical work, would this be fair to the songwriter who had the original idea for the work? For example, a bass player may play a performance of significant quality as an accompaniment to already existing lyrics and melody. Would the idea for that bass line exist without the melody and lyrics used as the inspiration for his part?

Hadley VS Kemp, 1998

A disagreement in publishing income sparked this legal case between Gary Kemp and Spandau Ballet, but perhaps the most interesting section deals with the saxophone solo in the song “True”. An expert musicologist described the solo as “particularly attractive” and “particularly felicitous” yet it only takes up 35 seconds (9%) of the finished recording.  Park J. found that Steve Norman (saxophonist) and not Gary Kemp arranged the notes in the solo played by Norman, yet still credited the sole authorship of the song to Kemp.

This decision, although conforming to music industry norms, contradicts the Godfrey VS Lees case. The saxophone solo contribution was clearly of high originality as it could not have been written by Kemp and should therefore, when strictly abiding to the 1988 copyright act, attract an interest in the copyright of the work. Instead, it was ruled that a pre-existing space was included for a saxophone solo and so; its inclusion was not a significant part of the work because it was not in itself, an element in the work [Arnold, J. 2009].

The member’s claims to a share in the copyright in the songs were also rejected with the exception of one song where the percussion parts were of “substantial and prolonged prominence” [Free, D. 2002]. This follows the ruling in the Godfrey VS Lees but the reasoning behind it contradicts Blackburn J.’s  “little originality” statement. 

To compound all of this, the claimants were further denied from revoking any licenses as they were estopped from doing so.

Beckingham VS Hodges 2002

This case focuses on a session musician known as Bobby Valentino, contracted to perform a violin part on The Blue Bells recording of a song called “Young At Heart”. Previously recorded by Bananarama, the song achieved a medium amount of success. Written by Robert Hodges and his girlfriend (Siobhan Fahey) for Bananarama, it was decided the song would be re-recorded in a different style, for which Bobby Valentino’s violin playing was required. The version by The Blues Bells was a hit in 1984 and an even bigger hit in 1993 when it was used on a commercial for Volkswagen. The violin part was a crucial part of the work’s success and Hodges and Valentino both insisted that they were the parts composer [Free, D. 2002].

Although Hodges gave Valentino the initial idea for the part, it was ruled that Valentino created the part by reversing a country riff played somewhere else in the song and by drawing on inspiration from a song Valentino had composed himself previously.

It was judged that there was collaboration in the creation of the work, there was a contribution from each joint author and the contributions were not separate. Therefore, all requirements of the 1988 copyright act were fulfilled for Bobby Valentino to qualify as a joint author to the work and he was also not estopped from revoking the gratuitous license granted to him, unlike both Godfree VS Lees and Hadley VS Kemp cases [Free, D. 2009].

This is completely against music industry practices but given the apparent significance of the re-recording and inclusion of the violin part, it could be seen as the “fair” conclusion to this case. The work recorded by Bananarama was not as successful as the Blue Bells version and that lack of success can be associated with the differences between the two sound recordings. However, when using the Hadley VS Kemp case as the precedent, did Bobby Valentino not just fulfill his contractual obligation by providing a violin part of high quality, just as Steve Norman was, as part of Spandau Ballet, on “True”?

Brooker VS Fisher 2009

The final and most recent case concerns Procul Harum and the 1967 song “A Whiter Shade Of Pale”, written by Gary Brooker and recorded as a demo tape to his own accompaniment. The song was then re-recorded after taking on Matthew Fisher as an organist who performed the now famous introduction on the recorded work. Fisher and Brooker both agreed that Fisher had created the organ solo for the recording in question but disagreed on sharing the ownership of the copyright to the song itself [Arnold, J. 2009].

Blackburne J. ruled that Fisher should indeed have a share in the copyright of the work, because the organ solo was sufficiently different to what was composed by Brooker and that the existence of a demo recorded previously does not change the organ part from being a product of individual skill and labor by Fisher [POP].

Fisher was not estopped from revoking his gratuitous license until the case went to the court of appeal that upheld the decision that Fisher was entitled to a share in the copyright, but should not be able to benefit from the copyright because of the 38-year gap in putting forward his claim. This was then overturned by the high court that saw it as unfair that Fisher be granted a share in the copyright but be then unable to claim the benefits of that share [Arnold, J. 2009].

This, and the Beckingham VS Hodges cases have set a dangerous precedent for the music industry as they have shown musicians who had no input on the lyrics and melody of the original song being granted a share in the songs copyright if their instrumental performance is deemed significant enough. This is shown particularly when looking at Blackburne J.’s comments on the Brooker VS Fisher case:

“If Mr. Fisher’s only contribution to the work had been the organ accompaniment to the sung parts, it would be a nice question, whether that contribution would qualify him… as a joint author of the work”

[Arnold, J. 2009]

This is incredibly contradictory, as by copyright law and Blackburne J.’s own words, it should. He stated in the Godfrey VS Lees 14 years previous that little originality is required… to a piece of music in order to attract copyright in the altered work” [REF]. It is highly confusing and difficult to come to a clear conclusion how decisions on copyright can be made when both of these statements came from the same Judge interpreting the same laws differently.

Reflection on the cases

It could be seen that the main hurdle facing the ownership of copyright in musical works is the lack of actual music industry law. This lack of law leads to Judges making decisions on creative and individual works using the Copyright Act of 1988 that does not make a definitive statement on what music is. This needs to be rectified, but then it is very difficult to define what may become memorable or significant in a musical work. If it is not the lyrics or melody created by the songwriter, then the instrumentalist in question would be justified in his claim to seek a share in the works copyright, as he is partly responsible for that works success (particularly seen in The Blue Bells case). It is almost like trying to predict what will be the most quotable line in a film script, as it is impossible to look into the future [Arnold, J. 2009].

A possible solution to these copyright claims could be found when looking at the Spandau Ballet publishing agreement that sparked their copyright feud. The vocal agreement between Gary Kemp and Spandau Ballet was that 100% of all royalties generated from the songs went straight to Kemp. Kemp then paid the other members 50% that was shared equally between them. After the split of the band, the 50% ceased to be paid to the other members by Kemp, and a legal case ensued [Southall, B. 2009].

Park J. dismissed the publishing claim as it was found the band had entered into agreements stipulating that publishing income went solely to Kemp, which effectively stated that the band accepted that 100% of the money was his and it was Kemps choice for it be split whilst the band were together [Southall, B. 2009].   

Considering that it was only when Kemp ceased to pay 50% of the publishing income to his band members that the agreement turned sour, it would appear this would be a fair way of dealing with money generated. Spandau Ballet recognized Kemp as the primary songwriter and understood that he was entitled to a greater share, but still received compensation for their performances on the recorded works. This relies on good inter-band relationships however, as not all songwriters will necessary be willing to give away pieces of publishing income earned by what they consider to be their ideas. Therefore, it would be difficult to write into a law and be enforced. Also, this relies on all musicians on the recording having a pre-existing relationship and would be difficult to apply to session musicians.

Conclusion

The copyright act of 1988 completely disregards the standard music industry norms by stating that new copyright is generated every time a new musical work is fixed [Arnold, J. 2009]. This effectively means that whether musicians want it or not, they have an interest in the copyright of every recording they perform on. The industry has tightened this area, with session musicians being asked to sign contracts before performing on any recordings, stipulating that they understand they will not go on to make a claim to any copyright [Arnold, J. 2009].

Without assessing each individual work created on an individual basis and looking at how important the piano playing or the guitar riff etc. is to the quality of the final musical work, it is hard to attribute the song writing credit when using copyright law. Because of how circumstantial every single band, solo artist; writer, song and recording session is, it is very hard to put forward a solution to the problem. Following Copyright law word for word would mean that the answer to the proposed question would be yes, all musicians featured on a popular music recording should be entitled to an appropriate share and interest in the music publishing copyright of the work performed on that recording. On the other hand, should the person playing the triangle have the same share in the copyright, as the guitarist who wrote the riff that the public whistles on their way to work? In the words of Blackburn J. “it would be a nice question” [Arnold, J. 2009].

Reference List:

Arnold, J. (2009) Reflections on the triumph of music: copyrights and performers rights in music [Invited Speaker Seminar], Oxford Intellectual Property. 20th October.

Copyright, Designs and Patents act (Year that the site was published 1995 /last published 2013, May 19th) Available at: http://www.legislation.gov.uk/ukpga/1988/48/section/3 (Accessed: 10/12/13).

Domone, K. & Domone M. Barclay James Harvest Biography. Available at:http://www.bjharvest.co.uk/bjh-biog.htm (2010) (Accessed: 10/12/13).

Free, D. (2002) Beckingham v. Hodgens: The Session
Musician’s Claim to Music Copyright 
Vol.1, No.3, Autumn 2002, pp.93–97 Available at:http://www2.warwick.ac.uk/fac/soc/law/elj/eslj/issues/volume1/number3/interventions.pdf(Accessed: 10/12/13).

Southall, B. (2009) Pop Goes To Court. Second Edition. London: Omnibuss Press.

How the developments of new technology have changed the way Music Publishers generate income over the past 50 years

Introduction

Music Publishing is the area of the music world that controls the copyright contained within musical works. Publishing companies exist to collect the royalties generated by the use of the copyright contained within songs and act on behalf of songwriters to exploit these copyrights in order to generate revenue. [Avalon, 2009, pg 41]. For this to take place a deal is signed between the songwriter and the publisher to give control of the copyright contained in the works to the publisher and gives them permission to administer them. The income from the exploitation is then split in accordance to the deal (e.g. 60%/40% or 70%/30%) and depending on the deal, an advance may be paid to the songwriter that is then recouped by their future earnings [Passman, 2011, pg 230].

The three main areas of publishing income are split into royalty brackets; performance (live performance and broadcast) and mechanical income (reproduction of recordings and works) being primary sources and synchronization (sound recording placed with moving image) being a secondary source [Wikström, 2009, pg 57]. The way each of these revenue streams has earned money for publishers has changed over time thanks to developments in technology. The relationship between these technological advancements and how they have affected the income generated will be the main subject of this piece. 

History of Music Publishing

The music publishing industry as we know it today started with the production and sale of sheet music on Tin Pan Alley, which is where the term “Publishing” was, coined [Harrison 2011, pg 110]. The publishing offices on Tin Pan Alley (Denmark Street in the UK, West 28th Street, NY in USA) employed songwriters to write songs that were pitched to the popular singers of the time to be performed. This was the only way for the works to be heard, as there were few national radio platforms in the early 20th century and those that existed, did not cater for popular music. It was also regular practice for performers to not write their own songs and therefore relied on published songwriters to give them material. Unfortunately, this resulted in unpublished songwriters finding it very hard to exploit their music without the backing of a publisher [Passman, 2011, pg 232].

Because of the lack of recorded music at that time, people had to buy and perform sheet music in order to enjoy music in the home. This is the first time the commoditization of music yielded significant profit, with “School Days” performed by Gus Edwards selling over 3 million copies of sheet music in 1907 [Wikström 2009, pg 62] showing just how vast the secondary income market could be.                                                                                                                                                                        Performance Royalties

In terms of publishing, performance royalties are a primary source of income and not only limited to when a composition is performed live in by an artist, it is whenever that particular work is broadcast publicly, whether that be on the radio, in a place of work, the internet, a shop or on television [Wikström, 2009, pg 57]. The money generated by broadcast/performance is then collected by collection societies, the main UK collection society being the Performing Rights Society (PRS), and then distributed back to its members. In short, each publisher assigns the performing right contained within all of the songs in their catalogue over to the PRS to be licensed on their behalf [Nichols, 2013]. Once this deal is completed, the PRS then go to every user and ensure that they have the correct license in order to broadcast the music publicly. The users pay a license fee to the PRS that covers their particular song usage and the funds generated (minus the PRS’s operating costs) are paid to the publisher and then, in turn, the songwriter [Passman 2011, pg 251]. It is also possible (and encouraged) for unpublished songwriters to join the PRS so that their royalties are collected and distributed to them, as some songwriters choose to publisher their own work and get paid directly, or have not yet signed with a publisher [PRS, 2013].  

Technological innovation has played a huge role in the way that performance royalties have been generated over time. Tin Pan Alley had songwriters creating works for singers to perform live in public, but this evolved with the invention of recording technology and development of radio equipment. These advances meant the songs could be broadcast as recordings and earn significant royalties without the need of a performer [Wibberly 2013]

The earning potential of recorded songs being broadcast developed further as technology opened up further avenues of secondary income. Songs started to become used in motion pictures and broadcast to cinema audiences where performance royalties are earned, although US cinemas are exempt from this. Works also started to be used in television advertising campaigns where broadcast royalties are due after every airing. As the number of television channels has increased, so has the possibility of earning public performance royalties [Passman, 2011, pg 253]

However, the largest shift in performance royalties has come in the digital age with income being generated through plays on YouTube, digital download services such as iTunes and streaming services such as Spotify. As of 2012, the royalties generated through online usage have eclipsed radio broadcast and live performance. This is an indication of the radical change the music industry has been through over time [PRS, 2013]. 

 Mechanical Royalites

Another form of copyright exploitation in the music industry is the reproduction and manufacturing of songs contained within sound recordings. Whether these are vinyl records, cassettes, CDs or even digital download files, a license needs to be applied for in order to reproduce the works in this way [Krasilovsky, Shemel, 2007 pg 161]. This license is called a mechanical license and in the UK is obtained through the Mechanical Copyright Protection Society (MCPS), which is paid on every physical release manufactured. The license fee on every physical copy produced is 8.5% of the published dealer price (PPD) but is a slightly different amount for online reproduction. These are the primary sources of mechanical publishing income. Mechanical license fees are also payable when copyrighted music features on computer games and DVDs that are being mass-produced and sold [Harrison, 2011 pg 121].

Initially, it was only vinyl records being sold that generated mechanical royalties and over time this has developed into many other forms of media using music also having to pay for it usage. Given the wealth of different formats carrying licensed songs in today’s market, it would be assumed that mechanical royalties would generate a significant portion of the music industries revenue. Unfortunately, because of the digital revolution, the amount of money generated through the mechanical reproduction of music has been in decline due to an overall decrease in the amount of physical releases sold [Rogers, 2013, pg 32].

This has not always been the case though, before the digital age, one of the music industry’s primary royalty generators was mechanical revenue. This is highlighted with the invention of the CD, as record companies were able to reissue their artists back catalogues. Avid fans would purchase their favourite acts recordings, repackaged on the new medium, which resulted in mechanical royalties coming in from records that were not only popular at the time, but also from those who had long since disappeared from the public eye [Wibberly, 2013].     

This could be seen as one of the music industry’s greatest ever marketing achievements, maximizing mechanical income. The public were promised that CDs had a cleaner sound of much higher quality, as well as being more portable and more hard wearing, enticing music enthusiasts to take up the new format [Harrison, 2011, pg 183]. However, the digital age has actually seen some music buyers revert back to purchasing vinyl; the format the industry proposed was out of date. Although still small in number, the resurgence of the vinyl format could indicate the extent of the music industry’s cunning, seeking to squeeze maximum amount of profit from the consumer [Dredge, 2013].

Synchronisation Royalties

Synchronisation in a publishing sense is the act of placing a recorded musical work to moving image and in order to do this, a synchronization license must be obtained. From films and TV programs to advertisements and computer games, wherever a musical work is used, it would have been paid for. These deals are often very lucrative for the songwriter with fees of £100,000 being relatively commonplace [Harrison, 2011, pg 123]. If a song is to be used in any film or motion picture then the producer of the film must go directly to the publisher to use the song in question, then to the record label to use the sound recording in question. This process also applies to get permission to use a work in a television advertisement or video game. The same also applies if a song is to be used on a television program in the USA. However, in the UK, the process is slightly different for television programs. The main channels such as SKY, BBC and ITV pay a “blanket license” to the PRS, which is a negotiated set fee, enabling them to use any song controlled by the PRS and any sound recording registered with the Phonographic Performance Limited (PPL) in their show [Passman, 2011, pg 261].  

The potential for royalties from secondary revenue sources can be explained when looking the soundtrack of the 1973 motion picture, American Graffiti. Music from the 1950’s and 1960’s was synced to the moving images in the film to recreate the feel of early 1960s America [Guardian, 2013]. Music from Buddy holly, Johnny Burnette and Bill Hailey [Amazon, 2013] among others, was included, which saw interest in those acts rekindled long after their recording careers had diminished or completely ceased. This meant that inclusion on the films official soundtrack provided mechanical income from the copies of the album manufactured, performance royalties were generated from the films cinema showings and synchronisation royalties were also paid for the songs inclusion in the film itself. Record labels also had the idea to stimulate primary income by re-releasing material from the featured artists back catalogue and so benefited from the profit of those sales, which in turn lead to the songwriters (or their estates) benefiting from mechanical copyright attached to production of the re-released work.

Publishing companies still didn’t realize just how productive the area of secondary income could be until Levi Jeans re-launched their brand with an innovative television advert featuring Marvin Gaye’s, “Heard it Through the Grapevine” which together married moving image and music to create a cool, authentic and original feel for their brand. Advertising agencies realized that music could be a way to help branding and sell products. This was an opportunity that could yield large amounts of money for publishers with both synchronization and performance royalties generated. Not to mention the mechanical royalties generated by the rejuvenated sales of a long since forgotten record. Virgin Publishing were the first act on this and set up a dedicated synchronization department to fully exploit this revenue stream which is now a cornerstone of every publishing company today [Marcel Visser, 2013]. 

Today, the synchronisation departments of publishing companies also have to change the way they generate revenue in the digital age. For example the act of synchronisation in a computer game should generate both synch and mechanical royalties. This is not the case and instead, a flat fee is paid to the publisher of the work in question in return for the songs use. [Passman, 2011, pg 262]. 

Another interesting sync case to look at in the digital age is Bjork’s release of a digital and interactive “App” in conjunction with an album. This is an innovative idea as music is synced to moving image in an interactive way, in a product will be copied every time the app is downloaded and therefore, generate both synchronization and mechanical royalites for publishers [Kiss, Needham 2013].  

Unfortunately for publishers, it seems that the increase in technology available could lead to difficulties when completing synchronisation deals in the future. Leading music supervisor PJ Bloom suggested that the potential exposure and revenue sales generated through a synchronisation deal are so important, that rights owners should be willing to pay for the right sync deal [Musicweek2013].

Conclusion

Labels and publishers paying for advertising space would indicate a complete shift from the current synchronisation paradigm, as advertisers would no longer be paying for the use of songs. Music Publishers would instead, pay for a works inclusion on an advert, in order to benefit from the exposure that would generate income through other revenue streams. Coupling this with how the digital age has seen mechanical royalties continue to decline, the publishing market looks to become even more challenging [Rogers, 2013, pg 32].

However, the copyright in a song will always be exploited, which means royalties will be generated, even if the money generated becomes spread thin over a number of different revenue streams. If the days of big mechanical royalties are over and synchronisation fees continue to decline, the future could be in song placement. Higher quantities of music in more places all together generating sufficient income could be the future of the publishing world in the 21st century [Musicweek, 2013].

Reference List:

Amazon. (2013) American Graffiti Soundtrack. Available at: http://www.amazon.co.uk/American-Graffiti-Soundtrack/dp/B000026E2D/ref=sr_1_1/278-6006356-5504442?ie=UTF8&qid=1382642843&sr=8-1&keywords=american+graffiti+sound+track (Accessed: 24th October 2013).

The Guardian. (2013) American Graffiti. Available at: http://www.theguardian.com/film/movie/36298/american-graffiti

(Accessed: 24th October 2013).

The Guardian. (2013) Daft Punk and David Bowie Have Helped UK Vinyl Sales Double in 2013. Available at: http://www.theguardian.com/music/2013/oct/17/uk-vinyl-sales-daft-punk-david-bowie

(Accessed: 24th October 2013).

Harrison, A. (2011) Music the Business. 5th Edition. London: Ebury Publishing.

Krasilovsky, M. W and Shemel, S (2007) This Business Of Music. New York: Watson-Guptill Puplications

Moses, A. (2009) Confessions of a record producer. 4th Edition. Milwaukee: Backbeat Books.

Nichols, S. PEDL Key Account Manager, PRS for Music (2013) Conversation with Danny Dawkins, 27th October.

Passman, D. (2011) All You Need To Know About The Music Business. 7th Edition. London: Penguin Group.

PRS. (2013) YouTube Deal – Help Centre. Available at: http://www.prsformusic.com/creators/helpcentre/Pages/YouTubeDealHelp.aspx#5

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