Author Archive for Alan KhalfinPage 16 of 16

A Music History Primer

The music “industry” has always been an extremely dynamic field that has paralleled the steady evolution of technology, business and society. The industry as we know it is more appropriately referred to as the record industry that began in the early 20th Century with the invention of the gramophone. But, the emergence of modern music is a relatively new development, as for the majority of its history, music was neither considered a form of entertainment nor a secular art.

Music (in some form or another) was an aspect of every ancient civilization, but was used in connection with religious rites/ceremonies. Similarly in medieval times, music was almost exclusively affiliated with social and religious rites and ceremonies. The secularization of music did not commence until the Renaissance, which began in the 14th Century and lasted until the middle of the 17th Century. Yet, until the 18th Century, the process of composing and printing music was mostly commissioned by the royalty and the church. In the mid to late 18th Century, performers and composers began to be commissioned by members of the aristocracy, thereby giving them commercial opportunities to market their music and performances to a more secular part of society. As such, music came to be viewed as a secular source of entertainment, evolving with the tastes of the public. As society grew to become more and more secular, so did music.

The industrial revolution of the 19th Century also greatly affected the music industry, shifting its focus from live performances to the exploitation of sheet music. While the printing press was invented in the 16th Century, the technological improvements of the steam powered press and the rotary printing press made it much faster and cheaper to print. Moreover, the industrial revolution created a middle class of society, which provided a wider consumer base for the exploitation of music. The industrial revolution also made it much cheaper to manufacture pianos, which lowered the price so that more people could purchase pianos. Because of this musicians could truly take advantage of the benefits of the printing press because not only did more people have the means to buy sheet music, but they have the ability to play the notes written on the sheet music at their homes. This lead to the proliferation of parlor music in 19th Century society.

Towards the end of this period of industrial growth, the Pianola was invented. The Pianola is a player piano that mechanically plays songs, thereby eliminating the need for any person to actually render the service of playing the music (this is where mechanical royalties entered the mix). Composers were thus given a much larger consumer base because people no longer needed to know how to play the notes on the sheet music. Rather, the notes would be played for them mechanically through the pianola. This caused for the sweeping rise of the sheet music industry, culminating in its dominance of the 19th Century music industry. This is the point where music fully became a product and no longer a service; the majority of money to be made was now in the sale sheet music, and not in the employment of the artist’s services. However, this was only the beginning of the productization that would dominate the business models of the music industry for the next 150 years.

In the late 19th Century, the advent of the phonogram launched the “record” industry and concluded the dominance of the sheet music industry. The gramophone was invented in 1887 and enabled people to listen to a sound recording of a performance without having to be at the performance. This was far superior to the player piano because it embodied a musician’s actual performance, instead of mechanically reproducing the notes written on sheet music through one single piano. An audience could hear an entire orchestra play a composition in exactly the way it was intended to be heard. The fact that the gramophone was cheaper to purchase than a player piano (and took up much less space) also contributed to its popularity.

The popularity of the gramophone became fully realized with the boom of radio in the 1920s. Radio became the primary source of entertainment in society, and as such, it became the primary marketing tool for the selling of records. Via the radio, a listener could constantly be exposed to new music that could be purchased for the gramophone. Musicians could now, for the first time, market to the general public, as since most Americans listened to the same radio stations. Phonograph recordings completely replaced sheet music as the primary source of revenue for musicians and forever changed the concept of music from a dynamic and interactive entertainment experience to a fixed product.

The original phonographic cylinder was soon replaced by a succession of new mediums, namely vinyl records, beta tapes, cassette tapes, and finally compact discs. In the 20th Century, music has become synonymous with the medium in which it is delivered. As technology improved, the recordings grew in quality and the devices needed to play these recordings lowered in price. As such, the notion of music as a product was easily spread throughout the world, and large profits were earned by the greedy labels.

In the 1980s the industry began making a transition from analog technology to digital, beginning with compact discs and culminating with digital formats distributed online. Digital technology has now been perfected and much like the gramophone did, it has completely revolutionized music creation and distribution. Although the digitalization of the industry has caused ramped piracy and copyright infringement, the Internet and the digital form is an enormous source of revenue and an extremely powerful marketing and distribution tool. In the last few years, digital sales have continued to rise, while CD sales have continued to plummet.

Many argue that the digitalization of the music industry, the latest trend in a long history of industry changes, has caused the retransformation of music from a product back into music as an entertainment service, much like it was before sheet music. The digital form has enabled music not to be tied to the media it is played on, and by separating the music from the product, it can be argued that music now exists as content, or rather a service.

So what do you think? What will the music industry look like in the next 10 years? How about in the next 50?

WTF is Music Publishing?

As a law student who geeked out on Copyright law, the single most frequent question I’m asked is: “Dude, what the hell is music publishing?” This is a very loaded question that triggers a discussion about music Copyright law and the various royalties that stem from each music Copyright.

Copyright law divides the musical process into two parts: (1) the writing of the song and (2) the recording the song. This is a distinction most DIY cats don’t make because they’re doing both! But, in the “traditional” (and rapidly fading) music industry, the songwriters wrote the songs and the recording artists recorded and performed the songs (except for the singer/songwriters who did both). Most likely, you’ve never heard of the songwriters, but are overly familiar with the recording artists.

There are thus two copyrights that apply to music (both of which come with “exclusive rights“):

1. Copyright for the Song (form PA): This covers the underlying musical composition of the song (music and lyrics) and belongs to the songwriters/music publishers. It covers the writing of the song itself, as opposed to a recording of the song.

2. Copyright for the Recording of the Song (form SR). This covers the audio recording that is made of a song. It covers the actual recording of a particular composition, and belongs to recording artists/record labels.

So, music publishing is the business of creating/administering/monetizing the copyrights for the song. Record labels, on the other hand, do the same for the sound recordings (the “Masters”). While a song is only “written” once (and can only be copyrighted once), many different sound recordings can be made of the same song (and each recording would have its own sound recording copyright). Once a first recording (“first use”) is made of the song, anybody else can then “cover” the song based on the statutory royalty.

Note, I said “cover” and not “sample”. When you’re covering something you need permission from the songwriter, and not from the recording artist who recorded the famous version of the song. In the interest of creative growth, copyright law requires that the songwriters grant you permission , via a compulsory statutory royalty. If you’re covering something, you might be able to get the license here.

So, why should musicians care about this? For a moment, lets put aside the ongoing debate of where musicians earn most of their money. At least some of the money earned actually comes from the purchase or use (licensing) of the music. In an age where a successful musician must aggregate as many sources of revenue as possible (the long tail of music revenue, anyone?), musicians should be aware of the specific royalty chains that attach to each copyright.

From each of the two copyrights, a specific royalty chain ensues. Thus, there are royalties owed to the writers (the publishing side) and separate royalties owed to the recording artists (the Master side).

On the publishing/writer’s side:

1. Mechanical Royalties: Due from sale of recordings of the song through MP3s, CDs, LPs, etc. The current statutory rate is 9.1 cents or 1.75 cents per minute of playing time (whichever is greater).

2. Synchronization Licensing Fees: Due when a piece of music is “synced” or matched with a movie, tv show, commercial, video game, etc. These fees also apply to online audio-visual production.

3. Public Performance Royalties (via ASCAP, BMI, and SESAC): When a song is played/performed/streamed/broadcast publicly (on the radio, internet, on TV, etc), royalties are owed for this use. Performances are generally broken down into feature performances and background music. If there is a sync license deal, additional royalties are owed for the broadcast of the works the music is used in.

On the label/recording artist’s side (excluding tours/merchandise):

1. Money from the “exploitation” (sale) of the Masters in various formats (MP3, CD, LP, etc). For this, mechanical royalties are due on the publishing side.

2. Master Use Licensing: A sync license only covers the license for the composition of the song, and a separate license needs to be obtained for the use of the masters.

3. Digital Performance (via Sound Exchange): There is a limited public performance right in sound recordings when performed by digital transmission (generally, there is are no public performance rights in sound recordings). For most digital performances, there is a compulsory statutory license, but for some a case-by-case license fee is negotiated.

So, if you want to make as much money as you can off your music, you gotta mix and match your revenue streams. A general understanding of both publishing and sound recording law is thus pretty darn helpful!

A good reference for the issues covered in this post is, Music, Money, and Success by Jeffrey and Todd Brabec. Please note that this post attempts to provide an overview of music law, but by no means covers all the issues that arise. Please don’t take this as legal advice!