Passman, D. All You Need to Know About the Music Business (8th Edition) (2006)

Chapter SEVEN – Broad-Strokes Overview of the Record Business
- Major record companies: Business / Legal Affairs – responsible for the company’s contracts, not only with artists, but with record clubs, foreign licenses, etc… 62
- A Record: “…in virtually every record agreement made since the 1960s, the contractual definition of a record says a record is both an audio-only and an audiovisual device (meaning one with sound and visual images), such as videocassettes and DVDs, which play video as well as audio material. (This is particularly interesting when you remember that audiovisual devices weren’t even invented in the 1960s! Companies anticipated their development, even though no one knew what form they would take.” 66
- “Even more important, the current deals define records to mean any kind of delivery of music for consumer use, whether sound alone or with visuals. This is designed to pick up the Internet and other electronic transmission.” 66
- Masters: two meanings.
o “The original recording made in the studio is called a master, because it is the master (meaning controlling entity) from which all copies are made…When the recording is finished, the master is then edited, mixed, and EQ’d (EQ’s: ‘equalizing’)…The mixed multitrack is then reduced down to a two-track stereophonic master, which is ready for the duplication process. So there are two masters – the original multitrack, and the finished two-track.” 66-7.
o “The word ‘master’ also means a recording of one particular song. Thus, you might say an album has ‘ten masters’ (meaning ten selections) on it.” 67 → Are these masters owned by the record company? Does that mean, then, that the Beatles’ label licensed the use of ‘Revolution’ in Nike’s 1987 advertisement? Or did Nike need both the master and publishing licenses?
- Royalties: Artists get a percentage of money from each record sold. 68
o “The artist royalty is a percentage of the wholesale price. The companies also call this price the published price to dealers (PPD to its friends), or sometimes base price to dealers (BPD).” 69

Chapter THIRTEEN – Advanced Royalty Computations
- “To record companies, everything that isn’t a CD is an electronic transmission, which is the industry term for digital delivery and much, much more…Notice, this also picks up radio, TV, and motion pictures.” 155
- Master licenses: “When masters are licensed out for motion pictures, television shows, and commercials, record companies have historically credited the artist’s account with 50% of the net receipts. Over recent years, a fee for handling master licenses has crept into record agreements. All of the majors have what’s called a special markets division, whose job it is to take existing recordings and figure out ways to squeeze money from them.” 160. → The person / people that own the rights to the master recording isn’t, of course, necessarily the artist. This is true in the case of the Beatles.

Chapter FIFTEEN – Copyright Basics
- Copyright: “The legal definition of a copyright is ‘a limited duration monopoly’. Its purpose (as stated in the U.S. Constitution, no less) is to promote the progress of science and useful arts by giving creators exclusive rights to their works for a while.” 197
- To be copyrightable, work has to be original and “…of sufficient materiality to constitute a work.” To get a copyright, must make a tangible copy of something. 198
- When you have a copyright, you have the exclusive rights to (198-9):
o Reproduce the work
o Distribute copies of the work
o Perform the work publicly
o Make a derivative work
o Display the work publicly
- Compulsory Licenses: You must issue a license to anybody that wants to use your work, for example, in ‘phonorecords of non-dramatic musical compositions.’ It’s called a compulsory mechanical license. once a work has been released to the public, the publisher of that work is required to license it to anybody else who wants to use it in a record. 201. → doesn’t apply to licensing of music in TV commercials, then. And, as Passman later writes (204), the compulsory license is almost never used.
o “Copyright owners (publishers) would rather give a direct license because they can keep track of it easier.” 204. → So, publishers (or artists, if wrote the song?) own the composition copyright and record labels own the master copyright?

Chapter SIXTEEN – Publishing Companies and Major Income Sources
- Standard story: Writers assign the copyright in their songs to publishers, and publishers take care of the business; they find people to use their songs (unless writer is also the artist?), give them licenses, and make sure writer gets paid. 206
o These rights are known as administration rights (finding users, issuing licenses, collecting money, and paying writer) 206.
- “…A lot of major songwriters keep their own publishing (i.e., they are their own publisher, retaining ownership of their copyrights and perhaps hiring somebody to do the clerical function of administration)…Also, more and more artists are writing their own songs, so there’s no need for a publisher to get songs to them.” 209 → like the Beatles?
- Controlled Composition: A song written, owned, or controlled by the artist (in whole or in part). It is usually defined as “Any song in which the artist has an income or other interest. This means that, even if the artist doesn’t own or control it, it’s a controlled composition if he or she wrote or otherwise gets a piece of its earnings. Sometimes the definition also includes (depending on the record company) compositions owned or controlled by the producer of the recordings.” 215. → Beatles as songwriters.
- Controlled Composition Clause: puts a limit on how much the company has to pay for each controlled composition. 215

Chapter SEVENTEEN – Secondary Publishing Income
- ***Synchronization and Transcription Licenses: A license to use music in ‘timed synchronization’ with visual images. (Includes TV commercials) 231. → Does the publisher always grant these rights? What if songwriter is publisher? Is the license for the master copyright, the composition copyright, both, or neither?
o Fees: all over the board, and vary with the usage and importance of the song….when we get into the realm of commercials, the fees go even higher. 231
o ***For commercials, a song can get anywhere from $75,000 to $500,000 for a one-year national usage in the United States, on television and radio. Really well-known songs in major campaigns can get into the millions, though the typical range for a well-known song is $150,000 to $350,000. These figures get scaled down for regional or local usages, and for periods of less than a year.” 234. → Find out more about synchronization licenses.

Chapter EIGHTEEN – Songwriter Deals
- Standard contracts: Some contracts say the songwriter gets 50% of the publisher’s receipts from ‘mechanical, synchronization, and transcription income,’…250
- “In addition to the writer’s portion, if you ask, most publishers will give you 5% of wholesale for use of your name and likeness in a personality folio…” 254.
- Term songwriter agreements: you agree to give publisher of the songs you write during the term. 256
- Creative control: “At best, you should have the right to approve any usage of your song in commercials and print ads (newspapers, magazines, etc.) (If you have approval of synch licenses, you automatically control TV commercials…) 270

Chapter TWENTY
- Copyright History (p. 290-292)
o Prior to 1978, the U.S. had this bizarre copyright concept, adopted in 1909 and not changed for almost 70 years.
o Copyrights used to last for a period of 28 ears from publication of the work. These copyrights where then renewable for an additional 28 years (total of 56 years).
o In 1992, Congress passed a law stating that the renewal is now automatic, so there’s no loss of copyright if you forget.
o If you wanted to sell the copyright, you could sell the full 56 years, but the number of buyers dropped dramatically.
o Even if you sold the whole 56, there was a way you could get back the second 28 years. If you died, you automatically got back the second 28 years. If the author of the work died before the second 28 years started, then the transfer was nullified and the heirs of the author got to renew the second 28 years for their own benefit. 290-1 → Was this the case when Lennon died?
o For works created after the effective date of the 1976 Copyright Law (January 1, 1978), the duration of any copyright was changed to the life of the author plus 50 years. It also extended the old 56-year terms (for works created before January 1, 1978) by 19 years, for a total of 78 years. → Beatles songs?
• The 1976 Act gave the authors the right to take back these 19 years. The recapture procedure is similar to that for termination rights of newer copyrights. It is done by giving a notice, no less more than 10 years and no more than 2 years, before the beginning of the 19 years. 304.
o In 1998, the congressional folk got together and, in memory of congressmen and croonster Sonny Bono, slapped on another 20 years. That extended the copyright term for pre-’78 songs (if they were still under copyright) to a total of 95 years, and for stuff created after January 1, 1978, to life of the author plus 70 years. 291 → Post-Beatles John Lennon stuff?
o Right of Termination: One of the best goodies that authors got in the 1976 Copyright Law is the right of termination. The termination provisions say that, even if you make a stupid deal, the copyright law will give you a second shot – 35 years later. In other words, 35 years after a transfer, you can get your copyright back. And under the new law, you don’t even have to die. 292