May 24th, 2007

I. The Problem

People today are much more reliant than ever before on technology and the many contributions it makes to all aspects of life. Technology has provided the Internet, which has given more options to people in the world of entertainment. The Internet has made many artistic projects and productions, from digital music albums to e-books to short and long films and television programs available to a larger audience of people. It calls into question the idea of the music license and what it means to license music and digital music and how it relates to alternatives such as royalty free music.

The music industry has been keeping track of how people get music recently as well as of the concept of the music license and what it means to license music in response to the increased availability of downloadable music and digital music along with even films, television programs and other digital media on the Internet. The music industry was largely unprepared for the sudden introduction of file sharing programs to music lovers and even professionals needing digital media to finish important projects. It has taken several years for the music and film industry to realize the impact of file sharing programs and downloadable media on musicians, songwriters, other music professionals and record companies. Before the Internet, most young people bought CD's or tapes and shared them by simply copying or burning a copy for friends. While this was certainly a violation of Copyright Law, it somehow did not pose as large of a problem in terms of the music license as when mp3 players became available and people downloaded free music off the Internet through high-speed connections. The music industry and other companies involved in creating and distributing music and other media have recently started filing lawsuit after lawsuit to stop this phenomenon and put systems in place to make music lovers pay for music and other downloadable media. As was evidenced in recent lawsuits that were filed against individuals in small towns across the United States, copyright infringers do not have to be high profile to suffer consequences for violating the law when it comes to digital media.

Using digital media and deciding how to license music is becoming more difficult as copyright law becomes more sophisticated and complex in response to burgeoning technology. More parties are associated with copyright protection now than ever were before, and those seeking copyright rights or a music license have a long and complicated process to face.

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1. Excerpts from CD duplication house EULAs that require written proof of music clearance.

CD duplication houses and other entities require written proof of music clearance to make sure copyright issues have been satisfied and that the process it takes to license music is followed. Any copyrighted content broadcast publicly on the Internet or anywhere else needs to be legal, and as major online companies, including YouTube, Google and others start to face lawsuits for questionable content, copyright infringement and its impact on digital media is becoming a high-profile affair.

The following piece represents language found in a typical music clearance item requested by CD duplication house EULA's: "By installing, copying, or otherwise using the Software, you agree to be bound by the terms of this Agreement."
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2. Excerpts from Meta Café EULA requiring written proof of music clearance.

Meta Café takes a creative yet strong stance on its written proof of music clearance:

"Our Lawyers Made Us Do This. We hate getting sued even more than we hate bad coffee. So don't include ANY copyrighted material in your video unless you own all the rights. That includes music, images, and video clips. If you own the rights to the music you're using, please e-mail us at producerrewards(at)metacafe(dot)com, and we'll make sure your video doesn't get the boot. (Sorry about that weird email address, but spambots are evil.)"

Still some other components of Meta Café's written proof of music clearance language are standard and clear about content policies and how the music license works:

"Copyright and Content Policy

Metacafe respects the intellectual property rights of others, and requests you to do the same. Metacafe does not permit copyright infringing activities and infringement of intellectual property rights on its Website, and Metacafe will remove all Content if properly notified that such Content infringes on another's intellectual property rights. Metacafe reserves the right to remove Content without prior notice. Metacafe will also terminate a User's access to the Website, if they are determined to be a repeat infringer. Metacafe may remove such Content and/or terminate a User's access for uploading such Content in violation of these Terms & Conditions at any time, without prior notice and at its sole discretion."

Meta Café requires six items from those that identify copyright infringement and violations of music license on its site:

1. an electronic or physical signature of the person that can legally act on behalf of the copyright owner;
2. a description of the copyrighted work that has been illegally represented, including the URL of the location of the original copyrighted work or a copy of the copyrighted work;
3. a description of where the material suspected of infringement is located on the Website, including the URL;
4. the address, telephone number, and email address of the reporting individual;
5. a statement by the reporting individual that he/she has a belief I good faith that the disputed use has not been authorized by any legal owner of the copyright or other individual authorized to distribute it;
6. A statement by the reporting individual, made under penalty of perjury that all the first five items provided are accurate and that the individual is authorized to act on behalf of the copyright owner.

http://www.metacafe.com/copyright/

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3. Historical causes (technology, abuse of copyright law)


Media copyrights protect the works of artists from copying by others and helps people trying to license music. The U.S. Constitution states that Congress passes laws to give artists exclusive rights to their own works for limited times.

Those enforcing copyright law in today's technological age strongly believe that technology is to be encouraged as long as it is not used to attempt to acquire someone else's property without their consent and without paying for it. The CD is part of that broad description of "intellectual property," but which is property nonetheless, and at least as valuable as any other property.

Burning a CD: The copyright owner of a CD is the only person able to make copies of the CD in any form. If a third party wants to make a copy of the CD, the third party must only do so with permission from the owner for an agreed upon fee or royalty. Anyone burning a CD is an infringer since that person never obtained a license to copy the CD; the copy of the CD represents a lost sale to the owner of the original copyright.

Downloading a CD: Anyone downloading a CD without permission of the copyright owner is committing copyright infringement. Thousands of individuals have fallen victim to lawsuits filed by the Record Industry Association of America for committing this type of act. There are ways to download a CD legally by paying through a subscription service or through a company licensed by the copyright owner. This company owns the music license for the CD.

Record companies are often accused of villainous practices because of their scrupulous protection of record sales as well as of hindering technological progress because of a perceived "unwillingness" to allow the Internet to change their products. However, digital media changes the sales process for music and film because it has made the process of controlling sales and distribution of products more difficult. The ability to quickly download and pass along digital media freely makes the process of appropriately getting paid and paying for it difficult.

File sharing: File sharing is a form of illegal downloading that allows one party to get someone else's property without paying for it and without the permission of the copyright owner. The argument often is that new artists that own their own albums, records and songs should be allowed to share them freely on the Internet. This type of file sharing is perfectly legal because the process is being determined by the copyright owners.

Giving Away CDs: Someone that bought and paid for a CD can give it away to another person. However, the person cannot make a copy of the CD and give it away to another person. Copyright Law gives permission to only the copyright owner to make and sell copies or sometimes give them away. The copying is the infringement.

Selling a CD: The owner of a physical CD can sell this CD to another person. Copies cannot be made specifically for that purpose, but the physical CD purchased can be sold.

However, with the explosion of the Internet, enforcing copyright law and what it means to license music in general has become about far more than CD distribution, sharing and copying. Proving copyright infringement amidst those using technology to distribute, share or create music has become equally complicated. The following description of the process of enforcing copyright law in regards to digital media in particular is an illustration of just how complex the situation has become.

When a copyrighted piece of music or a film is copied by another person without permission, the copyright owner can sue the person for copyright infringement and bar future copying as well as collect monetary damages to punish the defendant and also compensate.

U.S. Copyright Law is a federal law, and thus copyright infringement cases (cases that involve the process required to license music) are taken to a U.S. district court. Once the right district court is chosen (which is determined by specificities of the individual case), the filer must determine that the work was federally registered with the U.S. Copyright Office. This is a simple procedure, and typically costs $20. If the work is filed, all that needs to be proven is that the defendant copied the work and thus violated the music license. Simple cases involve admission by the defendant of copying the work. However, technology has made this process of proving the stealing of digital media difficult because courts have more difficulty proving that the defendant copied the work. Because millions may have had access to the same piece of digital media and may have known about the music license, but only this particular defendant was brought to court, there is often difficulty of proof. Similarly, the digital media may not be technically a direct copy or an exact copy because of the nature of files found on the Internet, so the law becomes less straightforward. The nature of digital media files is not always completely objective and can make the process of objective proof of copyright infringement incredibly difficult.

Many cases of copyright infringement involving digital media files get lost during the initial process of proof because of the complexities and also because Copyright Law and the music license process have not necessarily fully caught up to sophistication technology has brought to music and motion pictures. However, once copyright infringement and violation of a music license has been established, the plaintiff in the case has several options: relief that prevents the defendant from copying the work further; relief that involves payment of damages by the defendant to the plaintiff. Once again, proof of real damages can be difficult when digital media is involved. The courts have established set amounts in response to these difficulties which range from $500 to $20,000 per infringement act.

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4. Recent examples of copyright lawsuits filed by media giants (Universal Music vs. Google)

There have been quite a few lawsuits filed against media giants recently in regards to copyright infringement. Universal Music Group has filed several suits against companies including Google, MySpace and YouTube. Universal alleges that www.myspace.com has allowed site users to post millions of songs and videos owned by Universal on the Internet and is in direct violation of copyright law. The lawsuit also suggests that MySpace encourages copyright infringement among users by creating measures that will allow digital media protected by a music license to be better suited for web browsers and offer easier ways of sharing material with others. As part of the lawsuit, Universal is seeking damages of $150,000 per song or video posted to the collection of website and so far has identified 60 direct copyright violations. Universal Music Group has estimated that there are tens of millions of songs and videos on MySpace currently that may be in violation of copyright. The goal of the lawsuit is also to prevent MySpace from distributing any more copyrighted material. Universal has filed similar suits with YouTube and Google.

Cases against Napster and Grokster recently became landmark cases and were won by the plaintiffs. Napster made it possible for its users to share files through its own technology without addressing the real way to license music through a valid music license. Grokster didn't provide the technology required to license music, but instructed its users how to share files and encouraged them to do so. Grokster lost its case because the U.S. Supreme Court said that although the company did not provide the technology through its site, it encouraged and "induced" people to share files. Curiously enough, the Court looked at the name "Grokster" and determined it came as close to "Napster" as it could to let people know what they were doing.

Recently passed acts such as the Digital Millennium Copyright Act (DMCA) were created to keep Internet service providers from the responsibility of copyrighted material posted and distributed by subscribers and to make sure the rules of a music license was appropriately followed at the same time.

Satellite Radio has also taken a hit recently in regards to the process required to license music and has been sued by major music companies such as EMI Music Publishing, Warner/Chappell Music, Sony/ATV Music and Viacom. The lawsuit's intent is to put a stop to copyright infringement claimed due to the ability to put Satellite radio broadcasts o iPods controlled by XM Satellite Radio. Once again, the amount being demanded per alleged infringement is $150,000. The lawsuit names 200 songs, but states that this collection is merely a representation and not the full number. In January, 2007 XM Satellite Radio, sued by major record labels Atlantic, BMG and Capitol had the case dismissed because of the company's assertion that music is only being broadcast and not sold. XM also claimed it had licensed all songs broadcast with major music providers such as ASCAP, BMI and SESAC.

Though many lawsuits have been dismissed, the fact that so many are cropping up serves to illustrate the complexity digital media has brought to copyright law and the music license concept. The distinction between broadcasting, selling, sharing and replaying digital media is becoming blurrier and blurrier as technology becomes more sophisticated and widely available.

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II. The Hard Way Out (licensing a hit song legally)

There are several types of licenses needed to use a copyrighted hit song in a media project. The synchronization license is a music license issued from the music publisher and gives the person including it the right to "synchronize" the music with images and dialogue. However, just the sync license does not allow the person using it in a multi-media presentation to use the specific recording of the music.

Also necessary is the master use license, which is a music license directly from the record company that allows the music user to use the piece of music. The cost to license music through a master license can range from thousands of dollars to millions of dollars for more popular songs. For a piece of already recorded music, obtaining these two licenses, which can obviously cost a lot of money is all a person needs to include it in a multi-media project. If the person using the music decides he/she wants to re-record the song for use in his project, he/she also needs a mechanical license, which allows the user the right to record and distribute the song as part of soundtracks or any other projects. Again, the fees for this can range in amounts from thousands to millions, depending upon how in demand the song is.
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-Sync licenses and how to get them

All songs in motion pictures, TV shows and commercials are synchronized with the soundtrack of the project. This means the pieces of music have been placed on the soundtrack to accompany the action in order to help create a mood or establish the setting. A producer or director has to obtain the permission to use this music as part of a soundtrack, which is a type of music license obtained through a synchronization license.

The cost to include a song in a motion picture, television show or commercial, as mentioned previously can cost anywhere from thousands to millions of dollars; there is no set amount that applies across the board and obtaining the synch license for each piece of music is a negotiation process. The amount of money also depends upon how much of a song is included. For example, in a small motion picture with a budget that falls below a million dollars, where only a few seconds of a song is heard, the license may only cost several hundred dollars. A large budget film with an entire song included over credits or main titles or multiple times throughout the film may pay for a synchronization license for that song that costs a couple of hundred thousand dollars to over a million.

Obtaining a synchronization license for a song used in a television show is less than obtaining this type of music license for a motion picture because the publisher and writers of the song may get performance revenues from the show's telecast. However, if the song is used for a show's theme song, the cost of the synch license can be a great deal more. The license may cost anywhere from a few hundred dollars to millions of dollars.

Factors for determining the cost of a synch license for a particular song include the popularity of the song and whether the copyright owner is willing to let the producer or director alter the lyrics to better fit the project. Still another factor in determining the cost of a synch license for a particular song includes the length of time a commercial, television show or film will be shown or aired and the scope of the release of the project, whether locally or worldwide.

In almost all cases, the music publisher is the one responsible for granting a synchronization license and has to license music for a particular song because the publisher owns the copyrights. Most songs are owned by Warner/Chappell Music, EMI Music and Universal Music.
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-Mechanical rights and how to get them

A mechanical license is an agreement in which a music publisher allows a person to reproduce and dispense copyrighted musical compositions in the form of CDs, records, tapes and some types of digital configurations, including subscription-based Internet music and media services like iTunes. It becomes incredibly important as digital media fills the Internet.

Previously and still usually the main distributor involved in this type of music license agreement is a record label. Most record labels make sure to have a mechanical license in place with each music publisher before releasing an album. The mechanical license is needed by anyone that wishes to record a song. There are two types of mechanical licenses: compulsory mechanical licenses obtained in order to re-record a pre-recorded and released song; regular mechanical licenses obtained to record a previously unrecorded song. A songwriter cannot stop someone from re-recording an already recorded and released song, but the person re-recording it has to license music through a compulsory mechanical license from the Copyright Office directly or else from the Harry Fox Agency.
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-Definition of statutory rates and how to find them

Copyright law determines the statutory rate for mechanical licenses, which is then used as the standard rate for all mechanical licenses for that song. The current method to license music and determine the basic mechanical royalty rate is 8.5 cents per song up to five minutes in length and $1.55 for songs over five minutes long. This rate goes up every two years. The license fee is paid by the recorder per copy manufactured.

A regular mechanical license is used when someone wants to record a song not yet recorded or released and requires permission from the songwriter or publisher. This license includes the record label for a particular artist, which is typically why recording contracts have clauses that give the label the license to record the songs at a specific mechanical license rate, usually lower than the regular rate.


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-Public Performances and how to file cue sheets

Public performance is defined as the performance of musical material reaching a wide audience by way of live or broadcast music. It is distinguished from music performed in the home among family and friends. The person performing the music at the venue or on the radio or television station broadcasting the music has to have permission from the copyright owner of the music and pay a performance fee to perform the music publicly.

Because there are probably tens of thousands of public performances of a specific piece of copyrighted music, the individual copyright owner cannot track all performances and grant permission through a music license, so copyright owners assign performance rights to over-arching performing rights organizations such as ASCAP and BMI to license music users and collect fees.

Previous copyright law established in 1909 contained wording that limited requirement of music users to copyrighted music performed for "public performance for profit." Copyright law was amended in 1976 to eliminate the "for profit" part of that statement. Music performed in churches as part of religious services and at school social events along with that performed at school sporting events and in classrooms is exempt from this law.

Public performance licenses give venues, restaurants, clubs, radio stations, television stations, cable, website, airlines, shopping malls and other public places the rights to play certain songs. Typically each licensee has a "blanket license" that covers any performance of a particular song. Each performing rights organizations divides income from licenses in different ways.

Cue sheets become important parts of public performances for those offering and paying for public performance licenses. A cue sheet involves a list of all the pieces of music involved in a particular production, the name of the composer, lyricist and music publisher for each musical piece and some other details. Each separate production has a different cue sheet. There is no fee for a cue sheet. A cue sheet is needed if a production has music and is for broadcast or public performance.

A cue sheet must be filed with the performing rights organization whenever a piece of music is performed in public so appropriate royalties can be assigned.
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III. The Easy Way Out (RF music)

As an alternative to digital music provided by major music providers, reputable royalty free music companies offer original tracks of music plus high quality royalty free music versions of some favorite classical pieces and other popular songs to listeners at affordable prices and sometimes even free of charge. Many royalty free music companies offer large downloadable music libraries online featuring music tracks in every genre. With royalty free music, copyright laws are satisfied upfront with a comparably low fee that allows for use of music indefinitely with no additional fees in the future. Royalty free music is far less complex than popular music, and many professionals choose it over hit songs because of the simple licensing process.

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-Definition of Buyout/RF music.

Royalty free music and buyout music are terms used to describe background music used for media projects such as television programs, radio shows and films that does not carry any further copyright obligations beyond an initial fee. Typically the rights to use royalty free music and other royalty free products ad services can be purchased for a low, one-time fee and them used in many different projects, which makes royalty free music and royalty free images popular commodities among professionals throughout the film and television industry and other industries that rely on the production of high quality multi-media projects. Buyout music and royalty free music selections are typically presented as less expensive alternatives to background music custom-made by a composer. Buyout music and royalty free music can come in many forms and is offered by a variety of organizations.


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-Comparison against "The Hard Way Out" and "Easy Way" regarding sync license, mechanical license and public performance.

Royalty free music or buyout music provides an affordable option for professionals because it presents the opportunity for individuals to pay a one-time low fee for unlimited use of tracks purchased with no further royalty payments, rather than many other types of stock music that require ongoing, often monthly fees to satisfy legal terms of use. The term "buyout" refers to the concept of buying out the royalty fees up-front rather than paying for them over time. While using hit songs has its advantages in terms of recognition by the public and easy association with products or projects, the process of obtaining synchronization licenses, mechanical licenses and any other type of music license or necessary legal documents is incredibly complex and costly. Many choose royalty free music because of the simple process of paying once for the clarity of being able to use many tracks of music indefinitely. Many royalty free music versions of particularly classical music pieces are indistinguishable from those that are not royalty free music tracks offered by major music providers, and much of the original royalty free music available is distinctive, innovative and just as desirable as hit songs.
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-Positives about how RF companies produce their music.

Though royalty free music in previous years received a bad reputation for having sub-par production quality, including canned instruments such as low-grade synthesizers and less than great musicians and artists, today's royalty free music offers high quality instrumentation and is composed by top talent. As producers and directors of high budget and low budget films alike have sought out inexpensive alternatives to hiring composers and buying expensive rights to use popular recordings of music, the demand for royalty free music has skyrocketed. Royalty free music companies have responded to a critical need by offering greater variety and better-produced and composed music. Pieces of royalty free music created by real musicians, artists and producers with vast experience creating innovative music for film and television feature real instruments such as strings, woodwinds, brass, piano, guitar, percussion instruments and musical effects that make every piece of music unique and exciting. Extensive music libraries are possible for even those with limited project budgets, with royalty free music presented in every style from classical and jazz to rock, techno and Hip Hop.
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IV. Conclusion

Digital music and downloadable music is presenting problems for the music industry and the concept of the music license and what it means to license music because of the ease of access to illegal free music to the public through the Internet. Many companies are starting to put anti-piracy plans into effect in reaction to violations of Copyright Law, or recommend alternatives such as music subscription services and royalty free music to listeners.

Digital music and downloadable music certainly makes the creation and sharing of digital media complex for everyone involved in this technological age. Listeners will continue to try to find ways to get cheap and free music, and copyright law will never fully prevent it. However, those that include music as part of projects regularly can stay legal by establishing relationships with major music providers and royalty free musiccompanies to keep all licenses up-to-date and to stay abreast of ever-changing Copyright Law.

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