Report: This Business of Music

Krasilovsky, M. William and Sydney Shemel with contributions by John M. Gross & Jonathan Feinstein, This Business of Music: The Definitive Guide to the Business and Legal Issues of the Music Industry, 10th edition. New York: Crown Publishing Group, 2007.

This Business of Music is a comprehensive, legal resource for anything related to the field of music business including but not limited to technology, recording, copyright, trade regulations, videos, taxation, management, publishing, loans, public domain, composers, performers, performing, labor, contracts, and foreign distribution. Divided into four large parts with multiple chapters in each part, the book works to examine music business in its entirety and all the legal considerations. Part One is titled Music Business Trends and Transformations. Part Two: Record Industry Agreements and Practices, Part Three: Music Publisher and Writer Agreements and Practices, and Part Four: Other Aspects of the Music Business. There are a total of 42 chapters in the book with numerous subheadings within each chapter, ensuring the topic is completely covered.

As in most legal books, This Business of Music does not expend any energy in creative interpretations nor rhetorical, colorful language. The sentences spin out with conciseness and clarity, leaving no doubt as to the intention or goals. Well-indexed and organized, this volume provides an ideal resource for music managers whether in educational circles or professional. All areas related to music business are dealt with and discussed in legal terms, providing a complete handbook beneficial to all people involved in music.

The book begins with a short chapter on trends and transformations in the music industry. Labor for performing musicians remains flat and salaries are reported to be low with some exceptions in certain negotiated professional salaries. Most performing musicians supplement their earnings with additional employment and a significant number of performing musicians are "between engagements." In most ways, these statistics are disturbing for performing musicians until we examine the growth of "listening" to music.

As the book states on page 4, "Music is big business in the United States." Listeners encompass the entire population and listening to music in some form or another involves more than 20 hours per week for most people. The technological age of digital downloading and listening directly through a computer makes tracking listening patterns difficult but it has been projected at over 40 billion dollars per year spent on music audio and or video sales. The book suggests we may be at an all time high in dollars spent for music listening. This large of an industry requires a high degree of regulation and requirements to protect both individuals and businesses involved in the creation, distribution, and handling of music.

There are three major performing rights organizations that serve to protect performers and writers. The American Society of Composers, Authors, and Publishers (ASCAP) collected $698 million on behalf of its 200,000 members in 2004. Broadcast Music, Inc. (BMI) collected $779 million in 2005-2006, and SESAC, originally titled Society of European Stage Authors & Composers but referred to as SESAC, collects between $5 and $7 million each year. The chart on page 9 demonstrates the large amount of retail music as compared with digital and device driven music. Licensing agencies are working through the court system to develop a license for digital downloading which could include a comprehensive statutory blanket license for legitimate digital service (p. 10). The proliferation of digital technology is driving forward the need for legislation and ultimately industry equilibrium.

Within Part Two there are several chapters of significant value to managers with Chapter 7 being the most relevant in higher education. Chapter 7 called Sound Recordings: Rights, Restrictions, and Royalties and discuss the law as it relates to sound recordings and the U.S. Copyright Act of 1976. The Act "states that copyright of a sound recording rests initially with the 'author' or 'authors' of that recording" (p. 64). It is often difficult to determine the authors of sound recordings and determination is a process of bargaining with the parties involved, further complicated by the role of the employee in producing the recording. Most of these situations are determined on a case-by-case basis.

"The copyright gives the owner of a sound recording the exclusive rights to reproduce it, to distribute the records to the public, and to make derivative works based thereon" (p. 64). But it does not protect the owner from a soundalike recording to be made nor does it give royalties to the owners for broadcasts of recordings. It does prevent the renting of recordings that were lawfully purchased or duplication of recordings for profit. This, however, does not extend to libraries or nonprofit institutions lending recordings. In the case of databases of recordings, the purchaser has the right to hear the recording but not to duplicate it for personal gain.

Using a sound recording post-February 15, 1972 requires permission from the copyright owner. Because this practice has become common, licensing agencies are serving in the role as agents of owners, including ASCAP, BMI, RIAA (Recording Industry Association of America), and SESAC. In addition a not-for-profit group called the Alliance of Artists and Recording Companies (AARC) has taken on the responsibility for collections and is operating on a global scale by collecting fees for home taping in foreign countries. This is an effort to collect taxes for home duplication of purchased recordings.

Institutions are required to have licenses for using sound recordings and to make annual reports of usage to licensing agencies representing copyright owners. Recent actions by the Copyright Royalty Board suggest that sophistication in technology should allow for automatic reporting of sound recordings, but broadcasters continue to resist this action. A table on page 496 describes the process for licensing, reporting, and collecting royalties.

Despite the best efforts of the Copyright Act and ongoing litigation against piracy, technology continues to press forward and seems to encourage the action around the world. New legislation by the United States Congress including the Intellectual Property and Courts Amendments Act of 2004 prevents fraudulent labeling on sound recordings and imposes stiffer penalties on counterfeit goods including sound recordings and other digital reproductions. Further technological mechanisms are being developed to protect copyright infringement on digital recordings. It is expected, however, that broadcasters will continue to battle the restrictions and find ways to get around the piracy preventions.

Part Three is called: Music Publisher and Writer Agreements and Practices. Of the twenty chapters in this section, the most applicable in higher education and general music management are the chapters on copyright, music for the theatre, and printed music. Copyright is addressed in chapters 10, 11, 12, 13, 15, 18, 19, and 20. Knowing the law and staying current with changes and trends in copyright litigation is an essential part of a managers responsibility in music business.

Difficult to express concisely, copyright law has undergone significant changes in its history going back to the U.S. Constitution which states that "the purpose of copyright is 'To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors, the exclusive Right to their respective Writings and Discoveries.' The most recent major overhaul of copyright law occurred in 1976 with the Copyright Act of 1976. When discussing copyright, works that are not recorded or not written down do not qualify for statutory copyright but may qualify for common law copyright for a limited time under the Copyright Act of 1976. Copyright protection is extended for both published and unpublished works, including any recording distributed for public performance. In a sense, although a bit ambiguous, personal recordings placed on youtube are considered owned by the performer and therefore subject to protection under the copyright laws.

Further protection of ownership can be gained through registration of published or unpublished works through the U.S. Copyright Office. Litigation against copyright infringement cannot be enacted without evidence of registration with the U.S. Copyright Office, but registration can also occur after the actual infringement has occurred. Another advantage to registration is to replace lost items due to the Library of Congress keeping and storing all registered items. The idea that an owner can send themselves a manuscript through registered mail and secure registration and copyright protection may have little legal merit. Information on how to register a work is found on pages 95-98 and includes how to fill out forms and select the type of registration preferred.

The Copyright Notice is no longer required to be displayed publicly on a work due to the Berne Convention Implementation Act of 1988, but is highly recommended and should included the symbol,  the year, and the owners name somewhere on the document. All published materials, including sound recordings, sheet music, and other materials, are required to be registered within 3 months of publication and should be with the two "Best Editions" available. Transfers of ownership are to be in writing and signed by original owner or authorized agent. The transfer should then be recorded in the Copyright Office. This then allows the copyright notice to bear the new owners name.

Fair Use is a frequently used term but needs to be understood by managers since it is often invoked in educational settings. "Fair Use is the right of the public to make a reasonable use of copyrighted material in special instances without the copyright owner's consent" (p. 102). This allows for book reviewers to quote lines from a book or researchers to use extracts for text to scholarly commentary. If the purpose is primarily educational and is for non-profit usage, then Fair Use can be applied for copyrighted material provided there is not a direct effect upon the potential market or value of the copyrighted work. There are guidelines prepared to address "Fair Use" and these should by duly studied by managers to prevent misunderstanding and abuse of the application. In general, making multiple copies of a copyright work to substitute purchase of the work is a violation of the law. Copying more than 10% of a work and making multiple copies is also a violation of the law.

Case law has further determined that Fair Use is not allowed if it hurts the owner financially, is in competition with the owner, or does not serve the public interest in development of news, art, science or industry (p. 104). While Fair Use does give allowances to educational institutions, it is once again wise to obtain a license from agencies or from a copyright proprietor. It is also prudent to give consideration to copyright ownership and avoid any kind of abuse of the Fair Use allowance in educational settings.

The length of copyright varies but 95 years is a general timetable to consider for copyrighted material. As of this writing, anything written prior to 1918 is now in public domain. Copyright  for joint works created after 1978 are for 70 years after the death of the last surviving author. Copyright renewal is only allowable prior to 2005 and only applies to next of kin or original executors of the estate in question. Termination of transfer of copyright requires written notice and has a window of 5 years prior to 1978 after death of ownership. There is a chart on page 119 outlining the options in termination of copyrights and transfers.

Public Domain is a term that is understood by many to be as "free as air." As musicians and educational institutions become more aware of the usage of public domain, it is decidedly ethical to give attributes to original ownership. This issue is particularly problematic with the availability of free music in public domain on various websites. There are many lists and references of music available in public domain but it is incumbent on a manager to know when a work is public domain or still under copyright. Managers should also keep in mind that an arrangement of a work in public domain means the original is free and available but not the arrangement of the work. A unusual development in Public Domain is the licensing under Creative Commons which allows for any usage of works as long as appropriate attribution is given (p. 130).

Chapter 19 is called Copyright Infringement. The chapter reminds readers of the cost of litigation and the responsible parties in a copyright infringement lawsuit, which could include licensees, producers, performers, and writers. Whether intentional or not, copyright infringement can still be applied in a lawsuit provided the plaintiff can prove access to the work. Incidental copying of a work without having had any kind of access to the work is not a violation of Copyright laws; however, subconscious copying of a work to which an author had access is considered an infringement (p. 197).

Every chapter in this book is clear and uses legal, concise language to describe the situation or possible violation, making this book an invaluable resource for music managers. The exception to the writing style happens in Chapter 42 called Technology Is a Challenge, Not a Choice. This is one of most entertaining and creative chapters in the book and essential reading for anyone in the music business. Technology is a major game changer for music with greater access for everyone and instant sharing of music files across oceans, resulting in portability and consumer-oriented music production. Technology has blurred the boundaries of copyright, music quality, ownership, licensing, marketing, and purchasing. The result of the ease of technology is also the ease of illegal activity through file sharing and digital downloads.

As in all problems created by humans, there are also solutions to the problems that will likely develop over time. Although every solution has concerns, it is to be expected that for the music business to be profitable, it must alter much of the way it conducts business. As the music business examines these issues, part of the solution will be to provide protection for owners by adding more security devices and examining the digital footprint of the trail of the sharing. This is one suggestion but it is accompanied with other issues such as violations of privacy and the possibilities for entrepreneurship in digital downloads. As the book says on page 460, "Exactly how the industry will look in a decade is not knowable, but only by meeting the challenges of that future today can we ensure a result we can comfortably embrace."

This Business of Music is a must for all music managers to have in their library to be used as a resource for acting responsibly and legally in all situations. The comprehensive approach to the music business makes this book an essential handbook for anyone seeking precise information on the business of music. The thorough index at the end of the book supplements the several pages of resources, charts, and addresses of agencies involved in the music business.