maurene charterer: Digital Music News - The Fashionista's Legal Guide to Licensing ...

Wednesday, February 15, 2012
by ?paul

Music is fashion, and sometimes it's hard to tell where the runway ends and the stage begins. But incomplete licensing will draw another type of fashion police, which is why attorney Steve Gordon penned this comprehensive legal guide to licensing music for fashion events. ? It's a legal roadmap for designers and producers of fashion shows who wish to use music for live shows, TV programs and the internet - including uploading footage to YouTube. ?

In order to understand music licensing for any project, it is necessary to know that every piece of recorded music contains two copyrights???one is the underlying musical composition or song, and the other is the recording itself. The copyright in the song is usually controlled by the songwriter or the writer's representative, a music publisher. ?The copyright in the recording is usually controlled by the artist if unsigned or by a record company if the artist is signed. ?

Songwriters and music publishers have an exclusive right to publicly perform their songs. ?If you sing a song in the shower, you don't need a license. That?s a private performance. ?But permission is required to publicly perform music on any radio or TV station, internet radio and streaming on demand, and in bars, nightclubs, restaurants, arenas, stadiums, bowling alleys, amusement parks, and any other place or venue where music is publicly performed. ?

However, if songwriters tried to license each venue and place that publicly performed their music they would never have time to write music. ?Even large music publishers do not have the resources to do this job. ?Instead songwriters and publishers use performing rights organizations or 'PROs' to license their music and collect the fees payable from the licensees on their behalf. ?

The vast majority of countries in the world each have one PRO. ?For instance, England has PRS, Japan has JASRAC, Germany has GEMA, Australia has APRA and France has SACEM. ?In the United States we have three: ASCAP, BMI and SESAC. ?They all have the same function: to license and collect monies on behalf of their members, the songwriters and music publishers, from anyone who publicly performs music. ?And each provides a 'blanket' license that allows the licensee to play any song in their repertoire. Together ASCAP, BMI and SESAC represent almost every commercially successful song in the US, and through their reciprocal relationships with foreign PROs, they represent almost all commercially successful songs in the world.?

Owners of 'sound recordings' are also protected by copyright law. Only the owner of the copyright in a recording of music has the right to make copies of that record and sell it because the exclusive right to make and distribute copies is one of the rights afforded by the copyright law to copyright owners. ?However, in the US, unlike owners of copyrights in songs, owners of copyrights in sound recordings do not have exclusive public performance rights. ?

Here's the history: when the Copyright Act was amended to protect sound recordings in the early 70s the broadcast community heavily lobbied Congress to carve out this right. They argued that broadcasters, especially radio, promoted record sales and they should not be forced to pay for a service that they were providing for the artists and the labels. They also pointed out that record companies not only encouraged them to play their records, they often paid DJs to play them, a practice known as 'payola.' Congress agreed with the broadcasters perhaps because the politicians needed radio's goodwill particularly during their campaigns for re-election. ?

In any event, because owners of copyrights in sound recordings have no exclusive right of public performance, anyone can publicly play a record without permission. There is one exception???the Copyright Act was amended in the 90s to provide an exclusive right to perform sound recording via digital transmission. ?I will describe the impact of this exception when we discuss transmitting fashion shows on the Web.?

Applying the above rules to fashion shows, the designer or producer of live shows can play CDs or hook up an iPod to speakers without having to worry about clearing the records. ?But it is necessary to clear the underlying songs. ?So, for instance, you can play Lady Gaga's recording of "Bad Romance" without permission, but you will need to clear the underlying song by Gaga and Nadir Khyat who are represented by Sony/ATV.?

Some venues where fashion shows take place, including most nightclubs, will already have ASCAP, BMI and SESAC licenses. So the producer of the show doesn?t have to worry about getting a license to play songs. ?However, some venues won't have a license. For instance, the temporary structures set up for Fashion Week in NYC at Lincoln Center. ?Also venues such as schools, museums or galleries will usually insist that the designer or producer secure a PRO license. ?Each PRO has different licenses that apply to the many different places that publicly perform music, and each has a license that would apply to fashion shows. Here are the rates that apply to fashion shows:?

SESAC: ?The rate is $74 per day for a show that runs 1-10 days, and $67 per day for shows that run from 11-30 days. ?The rate continues to decrease the more days the show runs. ?(Note that although SESAC is the smallest of the three U.S. PROs, its repertoire has grown a great deal in recent years in every genre of music. ?

BMI: ?The rate is based on seating capacity -- for shows that don?t charge admission the fees are $16 for venues with 250 seats or less, $19 for 251 to 750 seats, and the fees rise gradually as seating capacity rises. ?However, to use this license you have to pay a minimum of $222 which covers an entire year. ?For shows that charge admission, the fees are based on % of gross ticket sales starting with 8/10ths of 1% (.8%) for venues with 250 seats or less, and 6/10 (.6%) for venues with 2501-3500 seats. Thereafter, the fee decreases for larger venues.?

ASCAP: ?If the fashion show is designed to raise money for charity then, like BMI, the fee is aligned with seating capacity: ?$10 for venues with 5,500 seats or less; $48 for venues with 5,501 seats to 10,000 seats; $99 for venues with more than 10,000 up to 20,000 seats, and the rates continue to increase as the seating capacity increases. ?Similar to BMI, ASCAP charges a minimum fee ($126) which covers a full year. ?If the live fashion show is not designed for charity and pre-recorded music is used, then the fee is $97 per day. ?If a live band plays and there is no admission charge, then the fee is 1% of ?Live Entertainment Costs.? Such costs include paying the band, instrument rental and booking agent fees. ?If the show charges admission, the fee is 1.75% of Live Entertainment Costs.

ASCAP has a special license for IMG, the major talent/modeling ?agency which produces a lot of shows during Fashion Week in New York, but the rates are confidential.

If the venue is not licensed, and the designer or producer wants to play music at a live show, they can still avoid having to secure the PRO licenses and paying the accompanying fees by hiring a live band that writes its own music. ?Even if the members of the band who wrote the music are signed to one of the PROs, they retain the right to permit any third to publicly perform their music.?

Last fall the "Victoria's Secret Fashion Show" raked in record ratings at CBS. The 2011 broadcast of the annual underwear parade saw its highest ever showing in adults 18-49 and the largest audience since 2002. Aside from the models and sexy lingerie, the show featured an abundance of music including songs by Kanye West , Jay-Z, Rihanna, Maroon 5, Nicky Minaj, Lady Gaga and Beyonc?. ?

Victoria Secret's lawyer did not have to worry about PRO licenses for the public performance of the songs, however. ?CBS, like all other networks and indeed cable TV services, already have licenses from ASCAP, BMI and SESAC in place. ?Moreover, the lawyer didn't have to be concerned that pre-recorded music was performed on the show. As discussed, owners of sound recordings do not have the exclusive right to publicly perform their recordings at live shows or on standard radio and television broadcasts. ??

However, since the TV program was pre-recorded (as opposed to broadcast live), the music had to be "fixed in time relation" to the visual images contained in the program. In regard to songs, a synchronization or "synch" license for each musical composition was required. ?In ?addition, since some of the original master recordings were used in the show, a "master use" license was required from the record company which owned those sound recordings. ?

Unlike PRO licenses, there is no pre-set rate for synch licenses. ?Every synch license is subject to negotiation. The fees for synch licenses can vary wildly from very cheap for a music documentary to extremely expensive for national TV commercials. ?Synch licenses for network television fall somewhere in between. ?In order to secure a license, the producer must negotiate with the songwriters? representative, usually a music publisher such as Warner/Chappell, Sony ATV, or EMI music, although there are thousands of publishers and sometimes the songwriter is self-published. ?The fee for use of music in a TV program will vary depending on a number of factors including:

The identity of the broadcaster. For instance, network is more expensive than cable and the fee may be cheaper if the TV station has a limited audience such as a local station or one only available to an audience with special devices such as satellite TV. Note that a producer does not have to acquire a synch license if the show is performed on public broadcasting stations because PBS has a blanket license to use musical compositions in its programs.?

The nature of use. ?For instance, you may pay more to use a song over the credits as opposed in the body of the program. You also may have to pay more for a ?visual vocal? use, that is when a performer is depicted performing the song, rather than a background use.

Duration: ?You may be able to get a discount if you use only brief excerpts of a song.

Term: ?A producer may want a long term such as 3-5 years because the TV service may want to repeat the program. ?But a 5 year license will cost more than 1 year.

Another important factor is the song itself. ? A song written by Mick Jagger and Keith Richards, or Lennon and McCartney may be much more difficult to secure than a song written by an obscure songwriter or a new songwriter. ?Their representatives, the music publishers, may deny permission because they do not want the songs associated with a particular brand such as Victoria?s Secret. ?If the show has already been recorded, and the publishers refuse to license a song, the producer must ?bear the expense of replacing the song with other music or face the disaster of cutting the footage containing the song if an artist is depicted performing the song. The best way to avoid these problems is to try to clear the music BEFORE production. ?If there is denial, the producer can choose a different song without any economic loss. ?Generally the rates applying to network synch licenses can range from $1500 to $3000.?

If the producer used the original recordings of songs such as the Rihanna?s recording of "Umbrella" he has to go the record company to use the recording. ?In this case, Def Jam.?

All the same factors that we talked about for synch licensing apply to negotiating ?master use licenses. ?But generally a label will go along with the quote provided by the music publisher for the song. However, just like songs, the owner of the copyright in a master may just say "no" EVEN IF the copyright owner of the song gives permission. ?For instance Sony Music may not want a recording made by Tony Bennett to be included in a fashion show featuring lingerie even if the publisher had no problem with the use of the underlying song. Again, the best way to avoid this potential disaster is to clear the music before taping the show. ?

Public Performance?

If the producer uploads footage containing music on YouTube or Vevo there is no need to secure licenses from ASCAP, BMI or SESAC. ?These sites already have licenses from the PROs. ?But if the producer plays the footage on its own site, ? public performance licenses will be required. ?These are the current minimum fees: ??

SESAC: ?$225 (semi-annual)

BMI: ?$335 (annual)

ASCAP: ?$344

Also if the website has advertising, sponsorship, or subscription revenues, the PROs require a share of ? that money. ?SESAC?s Internet license agreement requires payment of .0057 (.57%) multiplied by revenues generated by the site. ? BMI requires payment of 1.75% of gross revenues. ?ASCAP?s rate card for interactive streaming is the greater of 3% of the site?s revenues or .0009 multiplied by the number of ?service sessions? defined as an individual visit to the website up to one hour. ?Any excess to an hour counts as an additional hour. Both BMI and ASCAP also offer alternative fee structures for websites in which music is contained on a limited number of pages. Details on all these licenses can be secured at the websites of each PRO. ?

As we reported above, owners of the copyright in sound recordings do not have public performance rights for live performances and normal broadcast, but they do for digital transmission. ?But if the producer uploads the show to their own website, and the show includes pre-recorded music, they will usually negotiate the public performance of the master as part of the master use license. ?

Since the songs will be synchronized to a visual image the producer must negotiate a synch license for each song ? just like a TV show. ?The prices will depend again on many of the same factors we discussed in connection with a TV show including how the song was used, the term of the license, etc. ?My recent experience is that one can expect a quote of approximately $1,000 for one year. Again most record companies will go along with the music publisher?s quote. ?However, the producer should pre-clear the songs and the masters because the publisher or label can refuse to license the music for any reason.?