Licensing, Beastie Boys, and Monster Energy

Earlier this month, it was reported that the Beastie Boys are suing Monster Energy Co. (makers of the popular energy drink) for almost $2.4 million for copyright infringement and legal fees. The incident came about when Monster released a web video featuring a remix of several Beastie Boys songs to promote an upcoming event. While Monster received permission from the D.J. who mixed the track, the company stopped short of clearing the use with all parties, including the Beastie Boys.

In an article on lrrmvp.com, an Intellectual Property Blog, Lewis Roca Rothgerber identifies three takeaways to avoid such situations when using music in videos.  “Make sure all third party rights are cleared before pushing content out on social media… Make sure a licensing expert is on your marketing team; if not, get legal involved before new marketing content is posted online… [and] Don’t assume anything; independently verify that all third part rights are clear”

Read the entire article at lrrmvp.com

Pandora Pays Songwriters Just 4% of Revenues

In a New Year’s message, Pandora’s CEO called 2014 the “year of the working artist on Pandora. ” However, the validity of this statement has recently been called into question by David Israelite, head of the National Music Publishers’ Association. Israelite points out that, while recording artists receive 50% of Pandora’s revenue, songwriters only receive about 4%. Why are songwriters paid so much less than recording artists from streaming? By law, non-interactive streaming services (such as Pandora) are granted a compulsory license, meaning that songwriter consent is not required and Pandora unilaterally sets its fees. In short, songwriters have no bargaining power regarding their royalty rates.

Pandora justifies its position, claiming that the publicity its platform provides is well worth the low songwriter payments. However, this statement is highly disputed. Critics of Pandora argue that publicity needs to translate into record sales to be worthwhile. On this point, Israelite notes that “Ironically, Pandora is competing with and overtaking the actual purchasing of music, while claiming it spurs sales.” Furthermore, a recent study conducted by Pandora on the supposed “Pandora Effect” revealed both artists and songwriters featured on their platform typically see little to no increase in sales.

Israelite states that while Pandora may claim to support artists and songwriters, they’re actually fighting to keep “archaic government regulations in place in order to pay them less and less.” He concludes with the hope that Pandora will “actually do something good by starting to pay them fairly.”

See the full Digital Music News article here.

Music Licensing Changes via U.S. Copyright Office

The U.S. Copyright Office is supporting a change in the way that music licensing is conducted, as stated in a 245 page report on Thursday. If successful, this will mark most radical reform to music licensing in the last 50 years.

Many of today’s music copyright laws were drafted almost 100 years ago, and have seen little revision or update. Consequently, these laws are seen as antiquated and out of date by many. Maria Pallante, the director of the Copyright Office, seems to share this view, commenting that “from a copyright perspective, we are trying to deliver bits and bytes through a Victrola.”

Unsurprisingly, the proposed overhaul of music licensing has not been unanimously accepted, and is anticipated to ignite controversy among some. If implemented, these proposed revisions will have a huge impact on the world of music licensing.

Highlights of the proposed licensing revisions include:

  • Payment of artist royalties for public performances on terrestrial radio.
  • Federalization of pre-1972 sound recordings. Reconsideration of the 75 year old antitrust decrees for ASCAP and BMI.
  • Allowing publishers and other music rights owners the ability withhold their content from streaming services.
  • Changes in what types of uses are subject to blanket licensing, and what are subject to free market negotiation. More transparency for artists with regard to deals between record labels and publishers with services like Spotify

 

See the full article from The Hollywood Reporter here.