Foreword to the Fourth Edition……………………………………………………………………………….xvii
Preface…………………………………………………………………………………………………………..xxi
DVD and Free CLE Credits for Attorneys……………………………………………………………………xxiii
Updates…………………………………………………………………………………………………………xxiii
Disclaimer………………………………………………………………………………………………………xxiii

Introduction: The Current State of the Music Business……………………………………………………xxv

I. Current State of the Recording Industry: Cataclysmic Decline from Approximately 14.5 Billion in 1999
to Less than 7 Billion Although Revenues Have Not Decreased as Much in the Last Several Years
Reasons for Decline…………………………………………………………………………………………….xxix
The Majors: Further Consolidation but Continuing Relevance
The Emergence of Streaming as the Revenue Model of the Future
Paid Subscription vs. Ad-Supported, On-Demand Streaming
Lack of Success in Converting Listeners to Customers
Will Streaming Turn Around the Record Business’s Cataclysmic Decline?
Apple’s Purchase of Beats Music
Licensing Recordings for Movies, TV, Games, and Ad Campaigns

II. Music Publishing Business: Performance Income Up, Mechanical Income Down, Total Income Stagnant
What Are Publishing Revenues?…………………………………………………………………………….xxxvii
Global Publishing Revenues
US Publishing Revenues

III. Current State of the Touring and Live Performance Business: The Only Sector of the Music Business
That Is Making More Money than before 1999
Gross Income vs. Guarantees and Net Profits……………………………………………………………. xxxix
Anecdote from My Own Practice
Top DJs Also Get PAID
Stars vs. Indie Artists and Baby Bands: A True Case of “Income Inequality”

IV. Branding

V. Current Conditions for Most Full-Time Musicians: Overall the Same as in Prior Years;
Digital Has Not Lived Up to the Promise of Leveling the Playing Field

Part I: Music Law and Business Practices
This section offers overview of the laws, business practices, and contracts that apply to
the music business and the new rules and business practices that apply to downloading,
streaming, webcasting, and other forms of digital distribution.

Chapter 1. Music Law and Business Primer
Copyright Law: The Foundation of the Music Publishing and Recording Businesses
What Is Copyright?………………………………………………………………………………………………….. 1
The “Works” That Copyright Protects
The Exclusive Rights That Copyright Affords
Copyright Registration: Why Do It, and How
Why Register?
How to Register
Duration of Copyright
Works Originally Created on or after January 1, 1978
Pre-’78 Works
Special Rules for Sound Recordings
Termination Rights (How to Get Your Copyrights Back): Sections 203 and 304(c)
Special Issues Regarding Termination of Post-’78 Sound Recordings
The Work-for-Hire Issue
The Artist May Not Be the Only Author
What Happens Now?
The Steps Artists Need to Take to Terminate Grants
Who Can Terminate
When Must Notice Be Served?
Content of Notice
To Whom Should Notice Be Sent?
How the Fair-Use Doctrine Applies to the Music Business
Performing a 30-Second Excerpt to Sell Ringtones Is Not Fair Use
Using 15-Second Excerpts in a Documentary Is Fair Use Since the Use Was “Transformative”
Minimum Use and Sampling
Creative Commons: An Alternative to Copyright
Attribution Noncommercial No Derivatives (BY-NC-ND)
Attribution Noncommercial Share Alike (BY-NC-SA)
Attribution Noncommercial (BY-NC)
Attribution No Derivatives (BY-ND)
Attribution Share Alike (BY-SA)
Music Publishing Business
Principal Sources of Income
The PROs: ASCAP, BMI, and SESAC
Origins and the Direct-Payment-to-Writers Business Model
Who They Represent and the Purpose They Serve
How They Operate and the Direct-Licensing Controversy
Important and Growing Source of Income
How Much Various Users Pay the Pros
How They Pay Their Members
How You Can Get Paid
Dramatic Works
Mechanical Rights and Royalties
Section 115 Compulsory License
The Harry Fox Agency
Sync Rights and Licenses
Sheet Music and Other Sources of Income
Sheet Music
Other Income
Role of the Music Publishers
Who They Are
What They Do
Music Publishing Contracts: Single-Song, Traditional-Term, Co-Pub, and Admin Deals
Other Players: Sync Reps and Music Libraries
Interview with Jake Wisely, Cofounder of Bicycle Music
Interview with Adam Taylor, President of Leading Music Library APM Music
The Record Business
Why Radio Does Not Pay for Broadcasting Sound Recording
Record Companies vs. DIY
The DIY Model
Recording Agreements
Exclusivity
Transfers of Copyright
Duration and Options
Advances and Recording Royalties
Standard Deductions to the Artist’s Royalty
Recoupment at Artist’s Royalty Rate
Controlled-Composition Clauses
The 360 Deal and How to Avoid Getting Completely Screwed
Master-Use Licenses
Role of an Indie Music Label: An Interview with Jay Frank, President of DigSin Music
(How to Run a Successful Record Label by Giving Away the Music for Free)
Managers and Artists
The Manager’s Role
Management Contracts
Definition of the Commission
Duration of the Agreement (The Term)
How Long the Manager Is Entitled to a Commission
Who Collects the Money
Other Important Terms and Issues
Interview with Emily White, Cofounder of Whitesmith Entertainment
Additional Resources
Chapter 2. Practical Advice in Response to Clients’ Most-Asked Questions
Somebody Stole My Song! What Can I Do? How Much Can I Get? ………………………………………….69
How Can I Protect My Name or My Band’s Name? How Much Will It Cost?
How Can a Music Lawyer Help Me? Will My Lawyer Shop My Music,
and How Much Will It Cost?
Chapter 3. Overview of Digital Music Law
Statutes Applicable to Distribution of Digital Music: AHRA, DPRA, and DMCA…………………………….91
Audio Home Recording Act of 1992
Private Copying
The Digital Performance Right in Sound Recordings Act of 1995
The Digital Millennium Copyright Act of 1998
Distributing Digital Music: Downloading, Interactive Streaming, and Noninteractive Streaming
Downloading
Interactive Streaming
Noninteractive Streaming, Including Webcasting and Satellite Radio
Application of the Copyright Law and the Statutes to Downloading, Interactive Streaming,
and Noninteractive Streaming
Musical Compositions
Sound Recordings
Chapter 4. Downloading
Overview…………………………………………………………………………………………………………………………..96
How Much the Services Pay for Copyrighted Music
How the Money Flows from the Services to the Labels, Artists, Publishers, and Songwriters
How Much the Labels Receive
Major Record Companies and Their Wholly Owned Affiliates
Indie Labels
How Much the Artists Receive
Artists Signed to Labels
Eminem’s Lawsuit against Universal
Unsigned Artists
How Much the Music Publishers Receive
Mechanicals: DPDs Are Subject to the Statutory Rate
Downloads Are Not Subject to Public-Performance Royalties
Previews of Songs Are Subject to Public-Performance Royalties
How Much the Songwriters Receive
Chapter 5. Interactive Streaming
Overview………………………………………………………………………………………………………………….103
How Much the Services Pay for Copyrighted Music
How the Money Flows from the Services to the Labels, Artists, Publishers, and Songwriters
How Much the Labels Receive
Major Labels and Their Wholly Owned Affiliates
Indie Labels
How Much the Artists Receive
Artists Signed to Labels
“Breakage”—Are the Majors Paying Artists Properly?
Unsigned Artists
Is Spotify Underpaying Unsigned Artists?
Another Controversy: The Majors’ Equity Interests in Interactive Digital Services
How Much the Music Publishers Receive
Statutory Rate Applicable to Audio Interactive and Limited Download Services
How Much the Songwriters Receive
Public Performance
Mechanical
Chapter 6. Noninteractive Digital Streaming, Including Webcasting and Satellite Radio
Overview………………………………………………………………………………………………………………….113
How Much the Services Pay for Copyrighted Music
How the Money Flows from the Services to the Labels, Artists, Publishers, and Songwriters
How Much the Labels and the Artists Receive
The Services Pay SoundExchange and It Pays 50 Percent to Artists and 50 Percent to
Sound Recording Copyright Owners
How SoundExchange Calculates the Value of Each Performance
The Rates Payable by Various Noninteractive Streaming Services
Stand-Alone Digital Services, Including Pandora
Sirius XM Rate
Broadcast Radio Services That Simulcast Their Signal
Other Rates
How Much the Publishers and Songwriters Receive
Performance Rights in Pre-’72 Recordings: Lawsuits against Sirius XM and Pandora;
and the RESPECT Act
Chapter 7. The Direct-Licensing Controversy: Will Publishers Be Able to License
Public-Performance Rights to Digital Music Services Directly (Instead of through the PROs),
and What Are the Consequences for Songwriters?
Collection Societies……………………………………………………………………………………………………..123
The PROs
Consent Decrees and the “Rate Court”
Major Publishers Make a Move but the Rate Court Rebuffs Them
The ASCAP-Pandora Rate Proceeding and Judge Cote’s Summary Judgment Decision
(September 2013)
The BMI-Pandora Rate Proceedings and Judge Stanton’s Summary Judgment Decision
(December 2013)
The Publishers’ New Strategy: Amend the Consent Decrees
Why Direct Deals May Be Horrible for Songwriters
Many Writers Are “Unrecouped”
Publishers Generally Do Not Have to Share Advance Monies with Their Songwriters
Direct Deals Could Hurt Independent Publishers and Songwriters
Proper Solution to Avoid Screwing the Writers
Final Note: Even if the Consent Decrees Are Amended and Major Publishers Withdraw
Digital Rights from ASCAP and BMI, Certain Songs in their Catalogues, I
ncluding Huge Hits, May Be Excluded
Chapter 8
Overview of the Global Digital Music Business…………………………………………………………………..131
Introduction to Global Digital Music Licensing
Interview with International Copyright and Music Attorney Amanda Harcourt
Distributing Digital Music
Impact of Foreign Publishing Business Practices on Direct-Licensing Controversy in the US
Terrestrial Radio
Digital Music Streaming
Downloading
Part II: Music Clearances
“Music clearances” means licensing songs that were previously written and musical recordings
that were previously produced and commercially released. It does not pertain to original music written
for a particular project. Part II provides the basic legal principles and business practices pertaining to
clearing music for a wide variety of both traditional media projects and stand-alone digital ventures.
Chapter 9. Introduction to Music Clearances
Songs vs. Masters………………………………………………………………………………………………………….147
Copyright Owners: Music Publishers and Record Labels
Sync License vs. Master-Use License
When You Don’t Need to Clear the Master
Footage Licenses
Labels’ “Blocking Rights”
Lip Syncs
Public Domain
Special Rules for Public Broadcast Stations Are Favorable to Producers
Charitable Projects
Most-Favored-Nation Clause
Approvals
Credits
Public-Performance Licenses and Cue Sheets
Research Techniques
What if You Can’t Find the Copyright Owner?
Chapter 10. Audiovisual Projects
Movies …………………………………………………………………………………………………………………….155
Standard Terms and Practices
Price
Step Deals
MFN’s Application to Features
Trailers: In-Context, Out-of-Context, and Other Promotions
Relationships and Music Clearances
Television
Standard Terms and Practices
Prices
Documentaries
Standard Terms and Practices
Strategies for Saving Money
Home Video
Other Windows
Discounts for Very Obscure Music
Concert Programs
Standard Terms
Discounts for Benefit Concerts
Advertising
A Brief History of Music in Advertising
Standard Terms and Practices
Rights and Fees
Other Factors in Determining Price
MFN, Exclusivity, and PRO Licenses
Sound-Alikes
Practical Tips for Clearing Music in Ads
Instructional Videos
Special Event Videos
Exhibits and Installations
Chapter 11: Audio-Only Clearances, Parody, and Fair Use
Audio Compilations……………………………………………………………………………………………………..171
Songs
Masters
Covers and Parodies
Covers
Compulsory License
Harry Fox Agency
Audiovisual Covers
Parodies
Are Parodies Protected by Fair Use?
Sample Clearances
Sampling Defined
Brief Legal History
Sample Clearance Process
When Is Sampling “De Minimis?”
The Bridgeport Case
The Beastie Boys Case
The Madonna Case: Conflict between Jurisdictions
Caution Advised
Chapter 12. Special Cases
Musical Theatre …………………………………………………………………………………………………………181
Grand Rights
Standard Terms and Practices
Licensing Music for Fashion Shows
PRO Licenses
How to Avoid the PROs
Licensing Music for Fashion Shows for Television
Licensing Music for Fashion Shows for the Web
Public Performance
Sync and Master-Use Licenses for the Web
Chapter 13. How to Clear Music for Various Stand-Alone Digital Projects
Artist Websites…………………………………………………………………………………………………………..187
Audio Covers
Video Covers
Music Websites and Blogs
How to Avoid Clearance Issues Altogether
Music Websites
Music Blogs: A “Gray” Area of Law
Simulcasting
Public-Performance Licenses
Live Streaming Services
Webisodes and Web Series
Indie vs. Well-Funded
Clearing Music for Indie Webisodes and Web Series
Crowdfunding Video Promos
Rates and Terms
Internet PSAs
Rates and Terms
Music-Based Mobile Apps
Introduction
Major-Label Blanket Licenses Are Expensive
Online Lyrics Sites
Why Permission Is Required
Rap Genius and the Fair-Use Argument
How to Acquire a License
Digital Sheet Music
Rates and Terms
Ringtones and Ringbacks (Ain’t What They Used to Be)
Licensing the Masters
Compulsory Licensing for Songs
Ringtones Are Not a Public Performance
Video Games
Licensing Parameters
Chapter 14. Tips and Commentary
Practical Tips for Clearing Music for Any Project………………………………………………………………..201
Music Documentary Filmmakers Deserve a Break on Licensing Fees
Part III: The Recording Industry in Transition: A Brief History of
Digital Music; Current Status of the Battle against Unauthorized
“Free” Music; and Current Controversies and Trends
Income from sales and licensing of recorded music has dwindled to less than 35 percent of what it was
in 1999, accounting for inflation. Part III focuses on the recording industry’s struggle to come to grips
with the digital era and recover from its precipitous decline.
Chapter 15. A Brief History of the Recording Industry’s Struggle with Digital Music
Introduction: A Business Affairs Conference at Sony Music in 1999 ………………………………………209
Labels vs. P2P File Trading: Why the Record Industry Supreme Court Victory against
Grokster Actually Hurt Its War on Piracy
The Legal Battle with Napster
Labels vs. the Consumer Electronics Industry and the Failure of the Secure Digital
Music Initiative (SDMI)
Labels vs. Technology: The Rootkit Disaster
Labels vs. Fans: RIAA’s Lawsuits
Labels Enter the Digital Music Business: MusicNet and Pressplay
Labels Give Away the Store: The Birth of iTunes
Recording Industry Pushes Antipiracy Legislation but Tech Industry Pushes Back:
The Failure of SOPA
Chapter 16. Update on Piracy: The Recording Industry’s Battle with “Free Music”
Pirate Sites; P2P and BitTorrent; and Cyberlockers……………………………………………………………..219
Pirate Sites
P2P and BitTorrent
Cyberlockers
Private Sharing: Ripping, Burning, Instant Messaging, E-mailing Music Files, USB, and
Hard Drive Sharing: A Bigger Source of Unauthorized Free Music than P2P and Cyberlockers
Put Together, but One Which the Industry Can Hardly Do Anything to Stop
Stream-Ripping Programs
Piracy Goes Mobile
The Forces Amassed against the Recording Industry: Google, Apple, and Other “Partners”
Chapter 17. Network Neutrality: What Is It? Will It Survive? And the Consequences
of Its Demise for the Music Business
A Brief Overview………………………………………………………………………………………………………..229
Dangers of Eliminating Network Neutrality
FCC’s Classification of ISPs
The Right but Not the Will to Reclassify
Current Controversy: The New Proposed Rules and President Obama’s Call for the FCC
to Reclassify Internet Service under Title II
Impact on the Music Business
Net Neutrality and Mobile Broadband Services
Expert Opinions
Chapter 18. Current Controversies, Trends and Developments: Discussion with
Glenn Peoples, Senior Editorial Analyst at Billboard Magazine
Vinyl Makes a Comeback………………………………………………………………………………………………235
Will Streaming Kill Downloading?
Will Streaming Save the Record Business?
The Significance of Beat Music’s Partnership with AT&T
Who Does BitTorrent Piracy Hurt Most: Music, Movies, TV, Games, or Porn?
Chapter 19. Current State of the Music Business in the Largest Potential Market on Earth
The People’s Republic of China ……………………………………………………………………………………243
Q&A with Eric de Fontenay, Founder and President of China.Musicdish.com
Music and Traditional Media in China
Music and New Media in China
State of Live Music in China and the US
Part IV: Winning Strategies and Compelling Ideas
This section is designed to serve as a road map for success
in the digital era for both artists and entrepreneurs.
Chapter 20. How to Write Hit Songs in the Digital Age
An Interview with Jay Frank, Author of FutureHit.DNA……………………………………………………..251
Chapter 21. How to Market a Record in the Digital Age
Twenty by Boyz II Men …………………………………………………………………………………………………263
Chapter 22. How to Use Spotify to Expand Your Fan Base and Make Money
Chapter 23. How to Use YouTube to Get Discovered and How to Use MCNs
to Expand Your YouTube Audience and Make Money
Using YouTube to Get Discovered……………………………………………………………………………………265
How to Use MCNs to Expand Your YouTube Audience and Make Money: Interview with Fiona Bloom,
Promoter, PR and Social Media Expert, and Founder of the “Efficacy Channel”
Chapter 24. How to Use Other Digital Tools to Succeed
(And Why There Is No Guarantee That They Will Work)
Music Blogs—How to Use Them to Get a Deal………………………………………………………………….272
Who Are Bloggers?
Which Blogs Should I Approach?
How to Attract Bloggers to Your Music
Aggregators
Your Website—How to Make It Great and Why It Is Still Important
Why Your Own Website Is Essential in Crafting an Online Presence
Methods to Easily Create Your Own Website
What to Include on Your Website and Why
Twitter vs. Facebook: How They Compare in Popularity
Twitter: How to Market Your Music and Make Some Money
Facebook—Still a Major Force in the Social Media World
Facebook for Artists: Do’s and Don’ts
The Fan Page
How to Set Up Fan Your Page and How to Use It
The Benefits of Having a Facebook Fan Page
How to Use the Facebook Fan Page
Criticism of Facebook
Why Musicians Don’t “Like” Facebook Changes
Chapter 25. How to Use Crowdfunding
Create a Successful Crowdfunding Campaign: Interview with Brian Meece, Cofounder
of RocketHub……………………………………………………………………………………………………………….283
How to Maximize Your Crowdfunding Campaign and How One Indie Rock Club
Used Crowdfunding to Survive: Interview with Nick Bodor, Cofounder of Cake Shop
Chapter 26. How to Develop a Successful Internet Radio Station
Interview with Elias Roman, CEO of Songza………………………………………………………………………295
Chapter 27. How a Jazz Club Is Using the Internet to Reach a Worldwide Audience and Create
New Revenue Streams for the Artists Who Play There
Interview with Spike Wilner, Jazz Pianist and Co-Owner of Smalls Jazz Club in NYC…………..300
Chapter 28. How to Use a Music College Education
Is It Worth the Time and Money?………………………………………………………………………………………307
Interview with Jonathon Batiste
Interview with Linda Lorence Critelli