What They′ll Never Tell You About the Music Busine ss, Third Edition

Contents

• Contents
• Preface x 
• Acknowledgments xiv
• 1 • Introduction 1
• Selecting the Right Attorney 2 
• Personal Representation 3 
• Deal Makers: Why You Need Them 4 
• Deal Blockers: How to Get Past Them 5  
• Staying the Course or Calling It Quits 6
• 2 • Investors  The High Costs of Low Finance  8
• The Costs of Being Heard 8 
• Of Investors and Investment Agreements 9 
• Finding the Money 9 
• Internet-Specific Offerings 12 
• The Safe Harbor Disclaimer 12
• Getting the Right Advice 13
• Paying It Back 13 
• Overcalls and Conversions 14 
• Commissions 15 
• Crowdfunding 15 
• Should He Who Pays the Piper Call the Tune? 16 
• A Backer Who Knows What He’s Doing 16
• 3 • Advances  Why They Seem a Lot Like Loans (and Vice Versa) 18
• A Sad Story and a Happy Story About Advances 19 
•  Is One Person’s Money Another Person’s Motivation? 21
• 4 • Royalties  Some Unvarnished Truths 22
• How the Royalty Pie Is Sliced and Who Gets the Pieces 23 
• Recording Costs 24  
• United States CD Album Royalty Calculation 25 
• Payment on Less than 100% of Records Sold 26 
• “New” Technology? 26 
• “Special” Categories 27
•  Two Diabolical Deduction Devices 30
• Reducing Mechanical Royalties 31 
•  Special Issues Regarding Controlled Compositions 32 
• The Beat Goes On: Other Important Deductions 33 
• Prepayment of Royalties 36 
• The Myth of Royalty Escalations 37 
• Free Goods 37 
• Lost or Misplaced Royalties 39 
• Chipping Away at Post-Term Royalties: Synchronization Licenses 39 
• Accountings, Audits, and the Statute of Limitations 40 
• How Responsible Should Record Companies Be? 42 
• The Effects of Digital Downloading on Pricing and Royalties 43  
• 360 “Deals” 50 
• The Digital Evolution 57
• 5 • Personal Management  The Whys, Wherefores, and Watch Outs 65
• What a Personal Manager Should (and Should Not) Be Expected to Do 66  
• Managing the Five Stages of an Artist’s Career 67  
• Remakes 70 
• KMMA: Keep My Music Available—At All Costs 71 
• Choosing Your Manager 74 
• The Question of Clout 75 
• Paying Your Manager 78 
• The Term of the Agreement 82 
• Extending or Terminating an Artist-Manager Relationship 83  
• Breach of Contract in Artist-Manager Agreements 87
• 6 • Managing Your Business and Your Financial Future 88
•  When “Show Me the Money” Isn’t Enough  89 What a Business Manager Does 90  
• Finding the Right Person 90 
• Certified Public Accountants 90  
• Auditing the Auditor 92 
• What Kind of Business Is Being Managed? 92  
• Should You “Do Business as” or Form a Partnership? 93 
• Money Means Options: Resisting the “Keep ’Em Poor” Philosophy 98 
• Managing Your Money 99 
• Investing: Is Anyone in Charge Here? 100 
• Making It and Saving It 103
• 7 • When Your Job Is More than a Gig Employment Agreements and Disagreements  108
• Term of Employment 108 
•  Duties 108 
•  Reporting Lines 109  
• Confidentiality and Competition 110  
• Stock Options 112  
• Perks 113 
• Termination 114 
• Working in a Foreign Land 117  
• Relocation and Re-Relocation 118 
• Visas 118 
• Disability and Death 118  
• Provisions That Survive Termination 119  
• Vacations 119  
• Release and Settlement 120 
• Employment Issues Specific to the Music Industry 120 
• Variations of Royalty Calculations 122 
• Employment Agreements with Celebrities and Others Otherwise Engaged 125  
• Mail 126 
• The Ownership of Ideas 127
• 8 • Record Producers  Are They as Sharp as Their Points?       128
• How 25% Can Equal 100% 128  
• Cross-Collateralization: It Does Not Apply to the Producer 130  
• Producers’ Royalty Provisions: The Basics 131 
• The Producer as Author of the Sound Recording 138 
• Producers and Neighboring Rights 138
• 9 • Getting Your Record Heard A Practical Guide to Marketing and Promotion  141
• Marketing Tools 141  
• The Goal-Oriented Campaign 143 
• The Record Contract 145 
• Do Record Companies Know What They Are Doing? 149
•  Victim or Victor? 149
• Television Campaigns 150
• Radio Promotion 151
• Airplay and Payola 152
• The Same Old Song (Only the Coda Is New) 156  
• The Beginning of the End? 157 
• A Brief Look at the Promotional Picture—from the Artist’s Point of View 159
• 10 • Touring Concerns  Trials and Tribulations    161
• The Club Tour 162 
• The Grand Tour 163 
• Sample Tour Budget 164 
• Private Charter 172 
• Elements of Touring Agreements: Commonalities and Idiosynchrasies 177
• 11 • Merchandising  Your Band, Your Brand 181
• Tour Merchandising 181 
• Retail Merchandising/Web Merchandising 189 
• Confidentiality 193 
• Compliance with Local Laws 194 
• End-of-Term Inventory and Sell-Off 194 
• Artwork and Photographs 195 
• Coupling 195 
• Life and Disability Insurance 196 
• Piracy 196 
• Audits 197
• 12 • Audits Truth or Consequences   198
• Examining the Audit 198 
• The Flow of Money 201 
• Access to Registration
• Information 202 
• The Black Box or “Something Is Abyss Here” 202 
• Television Campaigns 203 
• Interest Charges 203
•  Statutes of Limitations 204  
• Conducting Audits in Foreign Countries 205 
• A Few Practical Suggestions 206 
• The Right to Audit: A Contract Issue 208
• 13 • Music Publishing  The Odyssey of the Song   210
• What Is a Music Publisher—and What Does It Publish? 210  
• Copyright: A Bundle of Intangibles 212  
• Financial Secrets and Realities 215 
•  Mechanical Royalty Rates Outside of the United States 219 
• Top Gun—a Top Buyout for Paramount 219 
• The Administrating Function 221  
• Family Ties (Too Close to Sue) 222 
• When Your Publisher Forgets You 223 
• Foreign Taxes 224 
• At-Source Versus Receipts Deals 225 
• The Black Box Revisited 226 
• Copyright Reversions 227
• 14 • When Rodgers Meets Hammerstein Determining Songwriter Credits   229
• Cowriting Agreements 229 
• Cowriters Who Are Band Members 231
• 15 • Being Your Own Music Publishing Company  Pros and Cons  234
• Self-Publishing 234 
• Getting in Touch with the Copyright Office 235 
• Why Bother Doing It Yourself? 239 
• Acquiring Copyrights 239 
• Reversion of Copyrights 240
• The Value of the Copyright 241 
• The Impact of Administrating Costs on True
• Earnings 243 
• The Cost of Giving Away a “Piece” of the Publishing 243
• 16 • Internet Entrepreneurship  Doing It Yourself    245
• Competing with the Big Boys 245 
• Artist, Songwriter, Performer—and E-Commerce
• Expert? 246 
• Making a Living 247 
• Stealing and Protecting Against It 248 
• Dos and Don’ts of Internet Entrepreneurship 248 
• Manufacturing and Distribution 250
• Kickstarting Your Career 251 
• Podcasting 252 
• Instantaneous Dissemination of Live Performances 253 
• Creating a Website 253 
• Which People Should Do It Themselves? 254 
• A Word of Warning—and Encouragement 255
• 17 • Lost, Misplaced, Neglected, and Abandoned Royalty Opportunities You Were Never Told About  257 An Introduction to Neighboring Rights 257 
• Broadcast Mechanicals 259 
• Neighboring Rights in Our Own Backyard: Canada 259 
• Lost, Misplaced, Neglected, or Abandoned: Which Category Are Your Royalties In? 260 
• Show Me the Money 263
• Two Neighboring Rights–Friendly Countries: The UK and the Netherlands 263
• Neighboring Rights Collections Agencies 264 
• Performing and Other Obscure Rights in Sound Recordings 266
• 18 • Urban Music  The Beat Goes On    269
• Roots 269 
• The Milieu 270 
• Urban Music: The Producer’s Cosmos 271 
•  Different Strokes for Hip-Hop Folks 271 
• Rap as Protest 274 
• The Importance of the Mix: Mixtapes 274 
• Career Ceilings 275  
• Hip-Hop and Pop Culture 275  
• Business Management and the Management of Business 275 
• The Changing Image 276
• Contractual Issues 277 
• The Rap Coalition: Self-Help Exemplified 278 
• Hip-Hop Rules 279
• 19 • Classical Music  Dead or Alive?     281
• A Little History 281 
• Demise or Rejuvenation? 282 
• The Metropolitan Opera 286 
• An Essential for Success: Spirituality 287 
• New Life for an Old Genre 289 
• The CD Arrives: Both a Blessing and a Curse 289 
• The Internet: Is It the Answer? 290
• The Role of Record Companies 292 
• The Composer-Artist: Special Considerations 296 
• Classical Composers and their Publishers: Some Pitfalls and Some Options 297 
• Classical Management 301 
• Presenting the Singer 304 
• Music Education 305
• 20 • Termination of Grants of Copyrights For Every End, a Beginning       308
• Basic Term of Protection 308 
• “K-K-K-Katy” 309 
• Termination of Grants 309
• Duration of Copyright: Subsisting Copyrights 309 
• Who Can Terminate 310 
• The Control of Termination Decisions 310 
• The Rights Granted 310 
• The Windows for Termination 311 
• When Automatic Renewal Applies 312 
• The Sonny Bono Term Extension Act 312 
• Keeping Records 312 
• The Technical Requirements for Termination 313
• 21 • Compliance With Copyright Laws Hints for the Corporate Counsel   317 Intangible Rights and the Internet 317 
• Licensing From Music Publishers and Sound Recording Owners 318 
• Copyright Provisions Applicable to the Internet 320 
• Term of Copyright 322 
• Sampling, Borrowing, and Stealing 322 
• Rights Management 323
• Dangerous Language Alert 323 
• Music Clearance: The Music Industry’s Revenge 324 
• International Issues: One-Stop Shopping 325 
• So Your Corporation Has Also Decided to Become Adventurous? 326
• 22 • Catalogue Valuation  How to Improve Your Odds at Winning Big   327
• Factors in Valuing Catalogues: An Overview 328 
• Satellite Radio, Internet Radio, Mobile Phone Streaming, and HD Radio 329 
• Evaluating Data 331 
• Who Owns the Catalogue? 336 
• Termination Issues 337 
• The “Trunk” 337 
• Who’s Sorry Now? The Blackbird 338
• 23 • Copyright Issues  A Sampler    339
• Changing Copyright’s Image 339 
• Copyright Infringement 341 
• Sampling 346 
• The Impact of the Internet on Recording and Publishing Agreements 348 
• How the Internet Has Provided Context for Songwriters’ and Publishers’ Search for Equitable Treatment 350 
• The Internet Is Global: So What? I’ll Tell You What 352 
• What Is to Be Done? 354 
• The Fairness in Music Licensing Act 356 
• The Copyright Term Extension Act: A Lesson in Leverage 356
•  MP3: How Two Letters and a Numeral Terrorized an Entire Industry 357 
• Napster and Post–Napster 357 
• The More Things Change, the More They Remain the Same (or Do They?) 358
• 24 • Copyright  Can’t Live with It—Can’t Live Without It   360
• Battles or Battle-Axes 361 
• Copyleft (aka Copy Wrong), But Not Copyright 362 
• The Clearance Nightmare 366 
• Copyright and Personal Property 369 
• Misuse of Copyright 371 
• Some Suggested Solutions 371
• 25 • Solving Piracy in the 21st Century How to Avoid a Greek Tragedy     376
• Illegal Downloading 377 
• When an Apple Boomerangs 382 
• When Culture Trumps Commerce 383 
• Copyright Owners: Power (Not) to the People 384 
• What Would the Greeks Do? 388
•  
• Conclusion 389 
• Index 391