How To Stay In Tune With Music Copyrights

These days, most discussions concerning copyrighted music focus on the multiple regulatory measures being considered in order to crack down on copyright, trademark and patent infringement. In addition to proposed legislation, such as Senate Bill 978, numerous “intellectual property enforcement legislative recommendations” were laid out in a white paper issued by the president’s U.S. intellectual property enforcement coordinator.

In addition to monitoring the potential impact of new rules, it’s essential to remain vigilant in our compliance with current copyright regulations. Even the slightest unauthorized uses of copyrighted music in television programming, advertisements and content developed for online and other multiplatform content carry significant financial penalties.

With that in mind, MFM — the Media Financial Management Association — asked  two of the industry’s leading attorneys on copyright issues, Kevin Goldberg and David Oxenford, to identify the areas of greatest risk for violating copyright issues and how to ensure our compliance with this ever-changing landscape. So, in addition to providing a full article for each issue of our two-part series about music licensing, they collaborated on two sidebar pieces for the September/October issue of our The Financial Manager (TFM) magazine that contains the first articles in the series. Digital copies of the current issue are available at MFM’s website. Given the topic, I want to assure you that you have our permission to download the publication.

Goldberg, an attorney with the law firm Fletcher, Heald & Hildreth PLC, serves as both counselor to and advocate for several major press organizations including the American Society of News Editors and the Association of Capitol Reporters and Editors. He has presented on this topic at Media Finance Focus, the annual conference for members of MFM and its BCCA subsidiary. For the September/October issue of TFM he contributed an article entitled, “Packing a Bigger Performance-Rights Punch” which looks at the government’s increasingly stronger stance on copyright infringement. His contribution for our upcoming November/December issue entitled, “The Commercial Cash Register” and addresses what needs to be done to clear music for commercials.

Oxenford, an attorney with Davis Wright Tremaine LLP, has represented broadcasters before the FCC, the courts and other government agencies for almost 30 years and is a frequent presenter on copyright issues at industry forums, including Media Finance Focus. In the September/October issue of our magazine he wrote about “Dodging the Digital Blues,” the rules you need to know for using music in digital media. Coming in November/December is “Rules of the Royalty Road,” which discusses what you need to know before deciding to use a piece of music in a broadcast or cable channel programming.

Before you turn to the magazine, I’d like to give you a short summary of the areas Goldberg and Oxenford feel require our greatest diligence when it comes to copyright protection. As the producers of creative content, which we are increasingly licensing for use by others, compliance with these rules isn’t just a means for avoiding civil or criminal penalties. It’s also part of our responsibility to uphold the commercial value of television content.

According to Goldberg and Oxenford, one of the greatest copyright challenges stations face today comes with our understanding of the “fair use” of copyrighted music. They call this “one of the most misunderstood concepts in copyright law.” Instead of being a formula which, when applied correctly, will tell you whether you can use a piece of music without obtaining a license, our experts say the fair use rule is actually “applied on a case-by-case basis to cover uses such as teaching, research, criticism, news reporting or parody … the term is actually quite amorphous and, therefore, unpredictable.” They go on to note that a court will review four factors when determining whether a particular use is fair:

• What is the purpose and character of the copyrighted work? If the work is for commercial release (as is the case with most music), the experts believe its use is less likely to be deemed fair.

• What is the nature of the unlicensed use? “Again,” they warn “if commercial, it is less likely to be fair, whereas there is more leeway for use in news reporting or for educational purposes.”

• What is the amount and substantiality of the portion used? As Goldberg and Oxenford observe: “Note that this is amount and substantiality, hence, the ‘hook’ from a popular song may only be four or five notes, but may be considered substantial.”

• Most importantly, what effect will the unlicensed use have on the potential market for the copyrighted work? The authors say a good rule of thumb for answering this question is whether the use is more likely to leave a listener saying, “I don’t need to buy that” or “I gotta have that”? If it’s the latter response, the use is more likely to fall under fair use, in their experience.

Another consideration is whether or not we are using music in a manner where fees would typically be paid for that use. They note, “If money is typically paid for such a use, your use is less likely to be considered fair.”

“Because of the fact-specific nature of fair use analysis, most commercial users of music rely on the fair use doctrine only in limited situations — where only a portion of a composition or a recording is being used; where some type of commentary on the recording or recording artist is taking place, and where the use is not of a type for which licenses are generally obtained,” the attorneys say. “While using an excerpt of a song in a TV program that’s reviewing a new CD or recent concert would probably constitute a fair use, using that song in a commercial would probably not.”

In case you’re wondering just how high the stakes are if we fail to accurately apply the fair use rule, our music experts remind us that the Copyright Act allows damages of up to $150,000 per work, as well as possible felony penalties.

With the risk of penalties that onerous, and an appreciation for just how limited fair uses of copyrighted materials can be, stations and programmers have all the more reason to ensure that their employees understand and comply with all of the copyright rules. This is no easy task. As the experts remind us, music can require different rights from different licensors, depending on what we use and how we use it.

“Each song has a number of associated rights, including the right to reproduce the work; the right to distribute it; the right to prepare ‘derivative works’ and the right of public performance,” Oxenford and Goldberg note. This means it’s necessary to receive permission from the copyright owner anytime copyrighted music is used for any of these purposes, which generally comes in the form of a license agreement.

Complicating matters is the fact that each piece of recorded music has two separate copyrights which are often held by different parties. First, there is a copyright for the musical work, the lyrics and music, which is usually held by the songwriter or his or her publishing company. Sometimes, the experts warn, multiple publishing companies may be involved if the song has multiple writers.

There is also a copyright for the “sound recording” or “master recording” — the version of a work that is recorded by a singer, musical group or other artist. In the case of popular recordings, this copyright is held by the record company. In some circumstances, the experts say copyrights in musical compositions and sound recording may be controlled directly by the songwriter and/or recording artist; this is most often found in the case of recordings by independent artists of songs that they have written. There are also other instances, particularly with older classical or traditional music, where the underlying musical composition may have entered the public domain, but the more recently produced sound recording is still protected by copyright.

We must also be mindful of copyright rules concerning our use of music for online and mobile applications. Goldberg and Oxenford remind us that stations that digitally transmitted audio-visual programs containing music must obtain public-performance licenses for the musical compositions.

In his September/October article, Oxenford explains that another license is needed when a composition is recorded as part of a production with spoken words or video, such as music that’s used in the soundtrack of a TV program, promotion or commercial. This type of license is known in the music business as a “synch license.” It’s obtained from the music publisher or songwriter that controls the composition. The synch license relates only to the composition, and it does not include the right to use any recording of the song by a particular artist.

So if a programmer wants to synchronize a popular song with images in an audiovisual production, a license must be obtained for the use of the master as well. Oxenford goes on to explain that, “This is the case for TV programs, commercials and promotional announcements, even if that recording is audio-only.”

In the same way that the owner of a musical composition has the right to control its public performance as part of a television or radio program, streamed music on a website requires a public performance license for the musical composition. Oxenford explains that licensing for this application can be done through either a “blanket license” from the performing rights organization or, “in situations where only a few musical compositions are being performed on a website, the operator can license the compositions directly from the songwriter or publisher.”

This summary is a mere overview of the copyright rules and procedures that media businesses need to consider where musical compositions are involved. In addition to consulting with your legal counsel on copyright issues, I hope you will take advantage of the articles appearing in this two-part series in The Financial Manager. Compiled and edited by Janet Stilson, the magazine’s editor, and a journalist who follows the industry for TVNewsCheck, among others, they will help to ensure that we not only reinforce the importance of honoring creative content; but we also reflect that commitment through our own behavior.

I also want to encourage you to follow the example of the musicians without whom there would be no music; make time to keep improving what you do. Just as musicians must practice regularly, media professionals also need to focus on their craft. MFM’s many member benefits, including TFM magazine, along with our educational and networking opportunities help members hone their skills. If you are interested in learning more, please let me know.

Mary M. Collins is president & CEO of the Media Financial Management Association and its BCCA subsidiary. Her column appears in TVNewsCheck every other week. You can read her earlier columns here.