Music is a multi-billion dollar industry in the United States. The engine behind this monstrous financial machine is not, principally, the sale of goods or services as would be the case in a typical industry. A musician’s “stock in trade” is a copyright, and licensing these copyrights is the legal mechanism responsible for generation of that revenue.
A copyright is a kind of intellectual property that arises when a sufficiently creative idea is reduced into or onto a tangible medium. Thus, when you take a picture with your phone, a copyright is created because you took an idea out of your head (the creative composition of an image) and captured it in a tangible medium. In general, you own that copyright because you are the “author”—you took the picture. A musician creates a copyright when she writes notes on manuscript paper creating sheet music. She creates a copyright when she writes lyrics on her computer or tablet. She creates a copyright when she sings that composition into a microphone and the sound recording is captured by software on a hard drive.
Her goal now, however, is to monetize that intellectual property (copyright) she has created. The model is easy if we are talking about software—another kind of copyrightable subject matter. The owner of the copyright allows third parties to download the code onto a client device by clicking on an “I Agree” button by which the person agrees contractually to the terms of a software license. By that license, the copyright owner allows the third person to use the software per the terms of the contract. Without a license, the third person would be committing copyright infringement of the software.
But music licensing is often more abstract. iTunes and other online music downloading sites have created more formal mechanisms to allow a musician to place her creative works on the internet and cause them to be downloaded in exchange for a “clicked” online copyright license and the payment of money (royalties) in exchange for the downloader’s use of the music. But outside of those constructs, a musician’s ability to monetize her copyrights is often hampered by the realties of how the vast majorities of musicians perform and try to get paid. Most are not signed with labels, and many do not have formal distribution and royalty-collection and payment processes in place.
Moreover, the music copyright landscape is fraught with peril for most artists. At a national level, there is almost one new lawsuit filed per day alleging that a musician has infringed on someone else’s copyright. Recent examples include the “Blurred Lines” lawsuit brought against Robin Thicke by Marvin Gaye’s estate, and a brand new $300 million dollar lawsuit against Miley Cyrus over the song “We Can’t Stop.” There are also organizations like ASCAP and BMI, which are called “performing rights societies,” that enforce a particular kind of copyright called the “performance right.” If a musician appears in a bar and plays cover versions of songs, ASCAP’s job is to ensure that the musicians whose song was performed by the cover band gets paid for the public performance of the copyrighted musical composition.
The internet has changed many of the music licensing paradigms as well, given that both the opportunities for infringement and the opportunities to lawfully monetize music have expanded exponentially. Many of the laws which address online copyright infringement are more than 30 years old and do not well contemplate the realties of online music distribution, like streaming. Recent efforts to enact new legislation such as the Music Modernization Act and the CLASSICS Act are steps in the right direction, but for most musicians, protecting and monetizing their creative works requires diligence and hard work to make sure they get a fair payday.
Brad Frazer is a partner at Hawley Troxell where he practices Internet and intellectual property law. He is a published novelist (search for “Bradlee Frazer” at www.diversionbooks.com), frequent speaker and regular author of Internet content. He may be reached at firstname.lastname@example.org.