Copyrights in music differ from copyrights
in literary and dramatic works in several ways.
Perhaps the most important is that there are
two different kinds of copyrights that involve music.
The more traditional of the two are copyrights in musical compositions.
As you can see, section 102 (a), refers to these
as copyrights in musical works, including any accompanying words.
These have been around for a very long time.
The second type, which was added to the federal copyright statute only in 1972,
consists of copyrights in sound recordings.
As I mentioned earlier, in most countries
legal rights to sound recordings are known as neighboring rights.
In the United States, however, they are referred to as copyrights.
The legal rights associated with these two types of copyrights
and the complex business models that capitalize on those rights
are perhaps best seen by tracing the life
history of a typical piece of popular music.
I'm going to tell this hypothetical story using a slide.
As you'll soon see, the narrative is complicated.
Don't be discouraged if not all features of the story are clear right now.
We'll return to it several times during this lecture series.
Imagine that I'm a pretty good composer, but not much of a musician.
I compose a song.
It has a memorable melody and some conventional sentimental lyrics.
I wrote it down on some sheet music, so I satisfy the fixation requirement.
I thereby, as you know, acquire a copyright in my composition.
I could if I wanted retain ownership of my copyright, but as a typical composer
I lack the business skills or time necessary to exploit it effectively.
So instead, as is now customary in the United States, I sign all of my rights
to a music publisher.
There are tens of thousands of these in this country.
From this point forward in the story, the publisher
will retain the copyright and the composition.
In other words, the publisher will not assign it further.
Rather, the publisher will make money for itself and for me
by issuing licenses to a variety of other organizations--
in other words, permissions to engage in activities
that otherwise would violate copyright.
The most important of these licenses consist
of the right to make so-called mechanical copies of the composition.
Typically such a mechanical license will be
issued to a record company, which is interested in making and selling
sound recordings of my composition.
The independent rights of the musician who actually makes that recording we'll
discuss in a minute.
Back to the narrative, the publisher could in principle
enter into such a license with the record company on its own,
but it's customary in the United States to use
the services of an intermediary, namely the Harry Fox Agency.
If the CD and other products embodying the recording of my song
is commercially successful, the music publisher, who as we saw now
holds the copyright in it, will begin to exploit other licensing opportunities.
For example, the publisher will likely issue a reproduction license
to one of the four major sheet music printers
in the United States, which will then print and sell
sheet music, which in turn will be purchased by amateur guitarists who
want to learn how to play my song.
If the song is sufficiently popular and evocative that a movie studio wants
to include in the soundtrack of a movie, then the music publisher and the studio
will negotiate a so-called synchronization, or sync, license.
If there's demand for my music in other countries,
the publisher will likely issue a so-called sub-publishing license
to a similar publisher in one or more other countries.
The terms of these several contracts will vary,
but it's typical for the music publisher to turn over to me half of the license
revenues it earns from these various sources,
keeping the remainder, of course, for itself.
So now let's return to the musician, the performer,
whose recorded rendition of my song is crucial to the success
of my composition.
As I mentioned earlier, the creative contributions of the performer
will generate a second independent copyright in the sound recording.
It's possible that the performer will have
to share that copyright with a sound engineer,
but we'll put that nuance to one side.
As was true of the composer, it would be possible for the performer
to retain that copyright, but at least until quite recently,
it was customary for performers to enter into so-called recording
contracts with record companies.
Such recording contracts also have many complex terms, some of which
are likely to be onerous which we'll discuss in a few weeks.
The central term, however, is straightforward.
The performer assigns his copyright in the sound recording
to the record company.
By now I hope the color scheme of this chart is apparent.
The blue figures represent artists, the people
who make creative contributions to the finished product.
These are the folks who, in the rhetoric of copyright law,
are commonly referred to as creators.
Red designates an assignee of a copyright.
Purple designates a licensee, and yellow designates an intermediary.
Arrows signify transfers of legal rights.
As you can see, the legal position of the record company is the most complex.
For the reasons I've sketched, the record companies
occupy two legal positions-- it's the assignee of the sound recording
copyright and one of the licensees of the musical composition copyright.
That's why it's shown in the chart as half red and half purple.
We're not done yet, however.
The music publisher, which to repeat holds the copyright
in the original composition, enjoys one additional valuable entitlement, namely
the exclusive right to authorize so-called quote,
public performances, end quote of the composition.
Such performances include playing the song at a park or a theater
and more importantly, broadcasts of recordings of the composition.
If the recording distributed by the record company is popular,
several companies are likely interested in making such public performances.
They include radio stations, perhaps television stations, restaurants
that play music in the background, and nowadays webcasters.
The publisher could in principle negotiate individual licenses
with these companies, but that would be time consuming and inefficient.
So instead, the publisher will almost certainly
use an intermediary to manage its public performance rights.
In most countries there's only one such intermediary, but in the United States
there happen to be three.
They are known as BMI, ASCAP, and SESAC.
They're called Performing Rights Organizations, or PROs.
Whichever PRO the publisher selects will issue so-called blanket licenses
to all of the companies that I mentioned earlier.
The reason these are called blanket licenses
is that instead of paying a small fee for each song it plays,
the licensee pays a flat fee-- typically a small percentage
of its gross revenues-- to perform any of the compositions in the PRO's
repertoire.
The PRO then pays to the music publisher a slice
of the total amount of the license fees it
collects, a slice roughly proportional to the relative frequency
with which my song is played.
And the publisher in turn gives half of that slice to me.
The net result-- the more popular a song,
the more money flows to the publisher and to the composer.
Notice again the color scheme.
Yellow indicates an intermediary.
Purple indicates a licensee.
Do the radio and television stations, restaurants, and webcasters
shown in the lower left of this chart have
to pay license fees not just to the music publisher at the top
but also to the record company in the bottom right?
In most countries, the answer would be yes.
After all a radio station when it plays a song
is performing not just the composition whose copyright
is held by the publisher, but also the recording of a particular rendition
of the song whose copyright, otherwise known as a neighboring right,
is owned by the record company.
It would seem to make sense for the radio station
to pay both copyright owners, and in most countries it must.
Nevertheless, in the United States radio stations
engaged in traditional analog broadcasting do not make such payments.
The reason is that in the United States, the owner
of a copyright in the sound recording, unlike the owners of copyrights
in other sorts of works, does not enjoy an exclusive right
of public performance.
You'll recall, I hope, that I discussed this unusual feature of US law
briefly in lecture number one and the tensions
it creates between the United States and the member countries of the Rome
Convention.
The principal reason for the anomalous position
of the United States on this issue is that in 1972, when
sound recordings were first given federal copyright protection,
broadcasters in the United States had considerable lobbying power,
and they successfully blocked adoption of a public performance right
for sound recordings.
That political explanation is buttressed by a plausible policy argument.
The broadcasters argue that they shouldn't
have to pay license fees to the record companies
because they argue broadcast of songs help the record companies by bringing
those songs to the attention of potential purchasers of records, CDs,
and so forth.
In other words, the promotional benefit of broadcast
substitutes for a license fee.
Record companies not surprisingly disagree.
In 1996 and 1998, the record companies succeeded
in obtaining from Congress a partial modification of this longstanding rule,
specifically by securing an amendment to the copyright statute that gave them
public performance rights for their sound recordings.
However, that amendment was limited to performances
that occurred in the form of a digital audio transmission.
The upshot is that today, when webcasters perform recorded music
digitally over the internet they must pay license fees to the record
companies.
How those license fees are calculated we'll discuss in lecture number eight.
For the time being, you need to know only that this legal relationship is
managed by yet another intermediary, the organization SoundExchange.
Record companies have not been satisfied by this adjustment to the statute.
They want full-blown public performance rights,
which would enable them to charge traditional radio
stations, large restaurants, and so forth who make use of their recordings.
Congressmen sympathetic to their position
periodically introduce bills that if adopted would have that effect.
The name of the most recent version of this proposed legislation
is the Performance Rights Act.
Shown on your screen is the press release
by the trade association of the recording companies welcoming
the introduction of this legislation.
Notice the reference to the difference between the situation in the United
States and the situation in most countries.
The broadcasters, for their part, continue to push back.
Set forth on screen is their own summary of their stance.
Notice that they continue to emphasize the quote, free promotion, that they're
providing record companies.
And notice also their strategic characterization
of the proposed legislation as a tax.
Finally, you'll see that they too have a group of sympathetic congressmen.
For better or worse, this is a reasonably good illustration
of the way in which lobbying over copyright typically works.
For more details concerning the still ongoing negotiation
over this particular issue, follow the link
shown on the left-hand side of these two slides.
So that in brief is the pattern of legal rights in the US recorded music
industry.
The arrows, as I've indicated, show transfers of legal entitlements.
For the most part, money flows between organizations through the channels
cut by the legal rights, with one exception.
For a long time, record companies have paid radio stations
significant amounts of money, known informally
as paola, to induce them to play the record company's
recordings over the airwaves, lending credence to the broadcasters'
contention that radio play serves as an effective form of advertising.
At its peak, roughly $100 million a year flow through this channel.
Legal impediments to such payments have been slowly increasing for decades,
and enforcement of those legal impediments has also been increasing.
For a while, record companies evaded these tightening rules
by using third-party intermediaries, known confusingly as indies,
to make their payments, but this loophole is also shrinking.
Today much
less money is flowing through this channel
than was true 40 or even 10 years ago, but the river
has not dried up completely.
One final dimension that this legal and financial system merits emphasis.
I mentioned earlier that the most important
of the licenses issued by the music publisher
is the so-called mechanical license that it grants to the record company.
Suppose, to return to our story, that the first commercial recording
of my song proved so popular that a second musician affiliated
with a different record company wants to do a cover of the song,
meaning a new rendition of it.
Does the second record company have to obtain a separate mechanical license
from the publisher?
The answer is, you might suppose, yes.
However, the second record company is not
obliged to negotiate a voluntary license with a music publisher.
Rather, so long as the second record company pays a modest fee just set
by the government, it's free to make and distribute a new recording,
and neither I nor the music publisher can object.
Currently that fee is about $0.09 per copy sold of the new recording, more
it's a long song.
Separate fees apply to ringtones and recordings delivered to customers
through interactive streaming.
This is the first example we've seen in this series of lectures
of a so-called quote, compulsory license.
We'll see several more in future lectures.
Not surprisingly, the central feature of a compulsory license
is that the copyright owner is compelled to issue it.
It has no choice but to accept the governmentally set fee.
Typically that fee is lower than the amount
the owner would demand if the license were voluntary.
Equally important, a compulsory license deprives the copyright owner
of creative control.
Suppose, for example, that I or the music publisher acting on my behalf
don't like the second sound recording artist
and think he will butcher my song.
As a result, I'd prefer not to grant him a license of any sort.
Nevertheless, neither I nor the publisher can refuse.
To be sure, the statutory provision that creates
this rule contains a few limitations, one of which
is that the second recording artist may not quote,
change the basic melody or fundamental character of the work, close quote.
But that restriction is construed very leniently.
Here's an example that illustrates the application
of this rule and its cultural impact.
In 1967, Jimi Hendrix composed the song "Little Wing."
He and his group, The Jimi Hendrix Experience,
recorded the song on their 1967 album, Axis: Bold as Love.
In terms of our diagram, Hendrix occupied both of the blue zones
because he was both the composer and the performer of the song.
This is reasonably common in rock music.
Compositions that fit this pattern are known as controlled compositions.
The contracts typically used to handle them differ modestly
from the contracts we've discussed thus far,
but not in ways that merit our attention right now.
I'm going to play the famous opening segment of Hendrix's composition,
so listen carefully.
[AUDIO PLAYBACK]
(SINGING) Well she's walking through the clouds
with a circus mind that's running wild.
[END PLAYBACK]
This song has inspired generations of musicians.
A few of the many commercially distributed
covers are shown on the slide on your screen.
Some of these covers could fairly be described as faithful adaptations that
preserved the essential character of Hendrix's original.
An example might be the version by Santana and Joe Cocker.
Here it is.
[AUDIO PLAYBACK]
(SINGING) Well she's walking through the clouds
with a circus mind that's running wild.
[END PLAYBACK]
Hendrix himself might also have been pleased
by the extraordinary instrumental recording of the song
by Stevie Ray Vaughan, one of the few guitarists better than Hendrix himself.
So if you don't know the recording, pay close attention
because this is one of the best guitar solos of all time.
[AUDIO PLAYBACK]
[END PLAYBACK]
Not all covers come as close to Hendrix's original vision.
Some would likely have set his teeth on edge.
Examples include Laurence Juber's acoustic rendition,
which is technically very impressive but suburban or new age in mood,
or The Corrs' pop rendition.
Here's a slice of the latter.
[AUDIO PLAYBACK]
(SINGING) Now she's walking through the clouds with a circus mind
that's running wild.
Butterflies and zebras, moonbeams and fairy tales.
All she ever thinks about is riding with the wind.
[END PLAYBACK]
I hope you'll recall from the last lecture
our discussion of the powerful bond that many artists feel with their creations.
That bond, you'll remember, prompted the sculptor Michael Snow
to object when ribbons were hung on the necks of his geese
and underlay Gary Larson's plea to his fans
not to use his cartoons in their websites.
The law, as we saw, often comes to the aid of such artists,
particularly in countries that recognize strong versions of moral rights.
By contrast, the law, and consequently the culture, of the music industry
is radically different.
Composers know that once they have authorized the commercial distribution
of one recording of their composition they
could no longer enjoy what in moral-rights terms
is referred to as a right of integrity.
In other words, they can't prevent other musicians
from altering their creations by making and distributing covers, some of which
will be very different from the versions the composers had in mind.
Nor may the first recording artist object
when a second recording artist makes a cover.
Interestingly neither composers nor performers
seem especially troubled by this prospect.
And the legal privilege of making covers has an important cultural benefit.
Each generation of musicians can test their skills, can show their chops,
by attempting their own recorded renditions
of the classic works of their predecessors.
Now to be sure, they have to pay a modest fee when they sell recordings
of their adaptations, but they don't have to ask permission.
Does this seemingly fundamental difference
between music on the one hand and other fields of art
reflect differences in the nature of the cultural products in question?
For example, the fact that most sculptures
are unique, whereas sound recordings can be replicated indefinitely.
Alternatively, have the feelings and expectations
of composers and musicians evolved in response
to the relatively unprotective rules that govern-- at least in the US music
industry.
These are hard questions, and I don't know the answers.
The answers matter.
For example, if the first explanation is right,
we should probably reexamine the contention
of the directors of black-and-white classic movies
that they should be able to block colorization
of their masterpieces, a contention that some countries, not including
the United States, currently respect.
By contrast, if the second explanation is right,
we may need to reconsider just how deep are the psychic bonds celebrated
by the personality theory of copyright.