CMU Trends

Trends: The rights of artists and songwriters post-assignment – performer and moral rights

By | Published on Friday 18 August 2017

At its core, copyright is about providing those who create original creative works with control over what happens to that which they create. This control is granted either as a point of principle – “of course a creator should control their creations” – or as some kind of reward for creative endeavour – “well done for all your hard work, now you can exploit your controls to make a profit”.

But the individuals who actually create a piece of content aren’t necessarily the owner of the subsequent copyright. Depending on what kind of copyright results from the creative process, the resulting copyright may go to the principal funder of the work rather than the individuals who were hands-on creative. And even where the individual creator is the copyright owner by default, said creator may then transfer ownership to another party, in return for money or administrative support.

However, even where the individuals involved in the creation of a piece of content are not the owners of the resulting copyright, they may well still have some rights over said content, either through contract, or as a result of performer or moral rights.

With these kinds of rights back in the news this week, as a result of a disagreement between the songwriter community and the label community in the US, where moral rights are under review by the Copyright Office, CMU Trends considers what the law says about the rights of artists and songwriters who don’t own the copyright in their work.

COPYRIGHT BASICS
Let’s start with the basics from a music rights perspective. If you write a song, you create a copyright. If you record a track, you create a copyright. As far as copyright law is concerned these are separate. So if you have a recording of a song, there are two copyrights at play, one in the song and one in the recording.

Actually, technically, the song also consists of two copyrights if it has lyrics. Which is to say there is one copyright in the words (the literary work) and another in the melody (the musical work). But in the music industry that distinction isn’t generally made – we simply talk about the song copyright. However, the distinction is very much made between the song rights and the recording rights.

Copyright Ownership
In most countries copyright is automatic, there is no registration process, so that a song or a recording are protected by copyright as soon as they are created. To that end the law has to tell us who the default or presumed owner of the copyright is, because no one is formally claiming ownership.

Default ownership rules vary, both from country to country, and according to the kind of copyright. In the UK, the default owner of the song copyright is the songwriter (or songwriters – in which case the copyright is co-owned). But the default owner for the recording copyright is whoever organises and pays for the recording to take place, which for a signed artist would be the record company.

Copyright Controls
As stated above, copyright is all about control. As the copyright owner you have certain controls over what happens to your work. The precise list of controls again varies from country to country, though will commonly include…

• The exclusive right to make copies of your work (the true ‘copy’ right).
• The exclusive right to then distribute those copies.
• The exclusive right to rent out those copies.
• The exclusive right to adapt the work.
• The exclusive right to perform the work in public.
• The exclusive right to communicate or make available the work to the public.

This list could be abbreviated as follows…

• The reproduction control
• The distribution control
• The rental control
• The adaptation control
• The performance control
• The communication control

In the music industry it is common to group the reproduction and distribution controls together and call them the ‘reproduction rights’ or, in music publishing, the ‘mechanical rights’. It is also common to group the performance and communication controls together and call them the ‘performing rights’ or ‘neighbouring rights’.

Copyright makes money when a third party wishes to exploit one of the controls. So, someone wants to make and distribute a copy of your song or recording, or adapt it, or perform it in public, or communicate it. Copyright law says the third party must get the permission from the copyright owner. The copyright owner sells this permission, and thus makes money from their copyright.

Copyright Assignment
Although copyright law tells us who the default owners are, in most countries copyright ownership can also be transferred by contract. So the default owner can assign ownership of the copyright to another party, usually in return for money or access to other resources. Once assignment has occurred, the controls that come with the copyright belong to the new owner, not the default owner.

When someone assigns their copyright to another party, they can do so for a set period of time or for the entire ‘life of copyright’ (ie until the copyright expires – because copyrights don’t last forever). They could also assign just specific copyright controls to the third party. And the assignment could be limited to certain territories.

In the UK, for a signed artist, the label will usually be the default owner of the recording copyright anyway. Though, if a new artist arrived at the label with an album already recorded, as they increasingly do, under a classic record deal the label would want to artist to assign it the copyright in those recordings.

On the publishing side, the songwriter is the default copyright owner. However, British writers usually assign their performing rights to their collecting society – ie the Performing Right Society (PRS) – and then, if they do a classic publishing deal, they will assign the rest of their copyright controls to the music publisher.

Which means that it is common for artists to not own the copyright in their recordings and songwriters to not own the copyright in their songs. Control over the recordings will sit with the record label, while control over the songs will sit with the collecting society and the music publisher.

However, although, in this scenario, the artist and songwriter won’t enjoy the copyright controls over their work, they will likely still have some rights over their recordings and songs.

CONTRACTUAL RIGHTS
First things first, featured artists and songwriters will usually secure some rights over their assigned works via their record and publishing contracts.

Copyright law doesn’t really have any opinion on what these contracts say, and so it is for each artist and songwriter to negotiate the kind of contractual rights they require. Though there are, of course, industry conventions.

Royalties
The most obvious contractual right artists and songwriters enjoy is the right to share in any future income generated by their work. Because the new owner enjoys the controls that come with the copyright, it is they who can exploit those controls for profit. However, under contract they will likely be obliged to share that revenue with the artist or songwriter.

Quite how the money is shared is entirely for the contract to set out. The contract will usually state what percentage of the money will be paid to the artist or songwriter. Under a classic record deal, the artist will likely receive a minority share. Under a classic publishing deal, the songwriter will likely receive a majority share.

The splits may also vary according to how the revenue was generated – so that a record deal might provide different rates for CD, download, stream and sync.

The label and publisher may also be able to deduct certain costs from monies that come in before calculating the artist or songwriter’s share. And the label and publisher may be able to reclaim some of their upfront costs from the artists or songwriter’s share of income before actually paying over any royalties.

Vetoes
In addition to sharing the money, a record or publishing contract may also provide the artist or songwriter certain rights to consultation or veto rights over how a recording or song is monetised.

This means that there will be certain scenarios where the label or publisher – despite being the copyright owner – will have to consult or get approval from the artist or songwriter before exploiting their recording or song in a certain way.

Licensing deals that allow a brand to sync a recording or song into an advert may be covered by a contract term of this type – so that artist or songwriter has some control over which brands their music is associated with.

It is worth noting that, while featured artists and songwriters usually benefit from contractual rights of this kind, session musicians commonly do not. The session musician is more likely to be paid a one-off fee for their time, and not share in future income and/or have any control over the future use of their recordings.

PERFORMER RIGHTS
In addition to the contractual rights enjoyed by recording artists who do not own their copyrights, there are also performer rights. There are two main performer rights – performer approvals and performer equitable remuneration.

Performer Approvals
The performer approvals rule says that if you plan to record a musician’s performance, you must first get their approval to [a] make the recording in the first place and [b] to subsequently exploit each of the controls of the resulting recording copyright.

This principle means that someone can’t attend a gig, record the performance, and then exploit the recording for profit – even though, under default ownership rules, they would technically be the copyright owner in the master recording.

For a featured artist, their record contract with the label will usually grant blanket approval to record the artist’s performances and to exploit the resulting copyrights. Though with session musicians, these approvals need to be obtained each and every time the musician is hired for a session.

Performer Equitable Remuneration
Probably the more important performer right is Performer ER. This rule says that when the performing rights of the recording copyright are exploited (so the performance and communication controls), all the performers who appear on that recording have a statutory right to equitable remuneration.

The law is often a little vague on what this actually means, but it has generally be interpreted as saying that, whenever money is generated via the exploitation of the performing rights in recordings, any income is automatically split between the copyright owner (often a label) and the performers, often on a 50/50 basis.

So, in the UK, this means that with performing rights income, 50% is paid to the record label, while the other 50% is shared between any performers who appear on the recording, with about two thirds of that money being shared between the featured artists, and the other third between the session musicians.

The performer’s right to Performer ER exists beyond any contract with the copyright owner and, crucially, record contracts and session musician agreements are not allowed to waive the performer’s right to ER. Performers will always receive ER when the performing rights in their recordings are exploited at industry standard rates. And that money is paid directly via the performer’s collecting society, which is PPL in the UK.

For some artists, and especially session musicians, Performer ER is a very important revenue stream. Though it is worth noting that globally, the exploitation of performing rights accounts for about 14% of overall recorded music revenues.

The digital debate over Performer ER
There has been a big debate in the artist community in recent years over whether or not Performer ER should be paid on streaming income. Many artists argue it should, while most labels argue it should not.

Although copyright law doesn’t define a stream, it is generally agreed that the streaming process exploits both the reproduction and communication controls at the same time. Performer ER is traditionally due when the communication control is exploited, so why isn’t it currently paid on streaming income?

Well, the communication control can be split into two – the conventional communication control and the making available control – the latter of which was added to the list of controls in the 1990s. The labels argue that it is actually the making available control being exploited when music is streamed and that Performer ER doesn’t apply on making available.

That poses two questions. First, is a stream a communication or making available or both? Second, is Performer ER due on making available?

The answer to the latter question will depend on how making available was implemented into copyright law in the 1990s or early 2000s. UK law explicitly says there is no Performer ER due when the making available control is exploited. But in other countries the law is less specific.

The answer to the first question is very much up for debate, as copyright law doesn’t define what copyright controls are being exploited when music is streamed.

Many artist and musician groups are pushing for Performer ER to be paid on streaming, and would like European law amended to specifically state that this should happen. An in some countries, it has already been ruled that some ER should be paid on the streaming income stream.

Though that then creates a new debate around what that actually means – ie what percentage of streaming income should artists receive as ER, and does that automatically come out of the labels’ cut, or does it mean a rethink of the way streaming income is shared between all the different stakeholders?

MORAL RIGHTS
In addition to the contractual rights enjoyed by songwriters who do not own their copyrights, there are also moral rights.

The moral rights of creators vary greatly from country to country, with the concept originating in French copyright law. Though, two specific moral rights are included in the global copyright treaty the Berne Convention: the right to attribution and the right to stop derogatory treatment of your work.

Or, in the words of the Convention itself: “Independently of the author’s economic rights, and even after the transfer of the said rights, the author shall have the right to claim authorship of the work and to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, the said work, which would be prejudicial to his honour or reputation”.

Both of those moral rights exist in UK copyright law. That said, it could be argued that, because of the way these moral rights are described in the Copyright Act, they are not particularly strong. And music-based moral rights cases in the UK are pretty rare.

The two moral rights can also be waived by contract under UK law. Which means that, in a publishing contract, a songwriter can waive their moral rights. This fact is not without controversy, in that if these rights are a matter of morality, then people shouldn’t be allowed to opt out.

And, you could argue, it’s hard to see why anyone would want to voluntarily waive these moral rights, which suggests that where these rights have been waived under contract, the creator was pressured to do so by their business partner.

The digital debate over moral rights
An increasingly vocal debate of late in the songwriter community is the lack of songwriting credits on the streaming platforms. So that while a streaming service will tell you which featured artist recorded a track and which label released it, it often won’t tell you who wrote or published the song.

This fact is problematic for songwriters for various reasons. It means fans don’t know who wrote the songs they love, nor can they navigate a streaming service’s catalogue by songwriter. The lack of songwriter and publisher information in the streaming firm’s system also makes paying the songwriter and publisher a complex process. And, of course, it means that the writer’s moral right to attribution is being ignored.

It’s worth noting that this lack of songwriter attribution isn’t necessarily because the streaming firms don’t want to provide this information. The streaming platforms get their content from the record companies, which also provide some meta-data about the recordings provided. But that meta-data often lacks songwriter and publisher information. This has resulted in a debate over who, exactly, should be ensuring this data is in the system: the label, the publisher or the streaming service.

This has been in the news recently because of a review of moral rights by the US Copyright Office. Although the US signed the Berne Convention in 1988, moral rights have never been properly implemented into American copyright law. To that end, earlier this year the country’s Copyright Office announced that it would “review how existing US law protects the moral rights of attribution and integrity and whether any additional protection is advisable in this area”.

Songwriters argue that additional protection is very much advisable in this area, and that the two key moral rights set out in the Berne Convention should be properly enshrined into American law; and in particular the right to attribution.

However, the Recording Industry Association Of America – representing the majors – has expressed concern about moves in this direction, mainly because it worries it will put new obligations onto the labels to ensure songwriter attribution in the digital domain, with the risk of litigation if they fail to comply.

But the songwriters see the RIAA’s public opposition to moral right reform in the US as a betrayal, given that it is one part of the music community lobbying against another part of the music community. That, the songwriters argue, only strengthens the hands of big tech companies who are seeking to weaken copyright protection.

Songwriters and labels have both been involved in the other big copyright campaign of late – the one pushing for safe harbour reform – and the songwriters argue that getting the right to attribution added to US copyright law is part of the same agenda, ie getting tech companies to take more responsibility for policing the unlicensed distribution of copyright works on the internet.

But the major record companies, concerned about the extra work they may have to do in order to ensure songwriters are attributed, would prefer to see safe harbour and moral rights as two very different issues. Hence why an assortment of songwriter groups from around the world published a public letter this week calling on the RIAA to publicly change its position on moral rights.

It’s worth noting that, even in countries with pretty decent moral right regimes, the bad song data problem in the digital domain hasn’t been solved. So stronger moral rights Stateside won’t necessarily address this issue. Except, of course, America has a particularly litigious culture, which means that – if moral rights were enshrined in the law there – it would be the obvious forum for songwriters to go legal in as part of a bid to enforce their moral right to attribution across the streaming ecosystem.



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