M.E.L.O.N.

Agreeing to License Part One: Free to Roll With The Changes

by Mark A. Pearson, Esq.

The following is the first in a series of articles that will try and explain some of the pros and cons of entering into a licensing agreement in today’s entertainment industry.

As the various business models of the entertainment industry continue to reinvent themselves almost on a daily basis, one prevailing trend is the growing use of licensing.  More entertainment product is now self-produced by artists than ever before.  The “Studio System” and “Major Label” business models are quickly becoming obsolete.  It’s beyond the scope of this article to make any grand sweeping speculation as to why the industry models are changing.  Are these changes the result of the economy, backlash against the ‘old systems’, or technology changes?  The answer probably lies somewhere in the murky gray area known as “a combination of all of the above”.  The point is that change is here, and change means an influx in the use of licensing throughout the entrainment industry as the shift continues toward independent production.

Take the music industry, for example.  Under the old model, record labels hired talent evaluators to find artists, signed those artists to a recording contract, paid for the artist to record an album, created and distributed the album, and then profited off the sale of the album.  The label owned the copyright to master recordings that made up the album, and shared in the copyright of the song publishing with the songwriter.  The artist made money off of royalties paid by the label (including their advance) based on sales of the album, and on royalties paid to the songwriter by a performing rights organization (ASCAP/BMI) for use of the song.

Tech News: The More Things Change, Royalties Still Remain the Same

by Shana Dines

The debate over royalty rates for online music continues, but digital music is safe … for now.

Last week, the Copyright Royalty Board (CRB) established, for the first time, an industry-wide royalty rate for digital downloads of songs. 

They made the decision by not doing anything. 

The rate Apple had established, 9.1 cents per song, which is typically sold for 99 cents, is now frozen for the next 5 years. 

This royalty decision is considered to be a victory for Apple, who threatened the CRB to shut down iTunes Music Store if the rate increased, according to Fortune Magazine.  This was not meant as a negotiating ploy, but a fact of the matter that Apple, already operating on a minimal profit margin, simply could not afford a steep hike in royalty rates.

Tech News: Veoh Sails into "Safe Harbor"

by Shana Dines

In a previous article, we explained the Digital Millennium Copyright Act's "notice and takedown" and "safe harbor" provisions that were meant to insulate certain internet services from copyright infringement committed by their users. 

Viacom sued YouTube in early 2007, alleging that at least 150,000 clips on YouTube included content owned by Viacom that had been viewed at least 1.5 billion times, in total.  Viacom further condemned YouTube for profiting from a "massive copyright infringement."

Veoh, another online video site that offers a combination of licensed studio content and user-generated content, has also come under fire for hosting user-generated videos containing copyright infringements.  While Universal Music Group (UMG) has a case against Veoh still pending, Veoh recently won another case against them based on the safe harbor provision.

iTunes is getting iTaxed in Many States

by Shana Dines

The economy is in a recession.  Gas prices are up.  Mortgages are foreclosing.  But digital music sales are on the rise, with iTunes reportedly selling over 5 billion songs, to date. 

Not surprisingly, politicians have begun viewing the billion-dollar industry as a potential revenue generator for the government through taxation. 

Many states, including California, have tax laws that unintentionally protect digital downloads from taxing because of language written well before the internet was even envisioned.  However, a growing number of states have started (or will soon start) taxing digital music downloads, either through reinterpretation of existing tax laws or by passing new laws.

Tech News: New TLDs Will Stir Up .change

by Shana Dines

The Internet Corporation for Assigned Names and Numbers (ICANN) announced their unanimous decision to allow new generic top-level domains (gTLDs) last month. 

Generic top-level domains are the series of letters at the right end of a website address.  The most commonly used gTLDs are .com, and .org, while some restricted TLDs include .gov and .edu.  There are also country code TLDs, like .il for Israel and .au for Australia. 

This program, set to take effect in early 2009, could potentially add limitless new gTLDs to the realm of IP addresses.

The news comes to a mixture of reactions, ranging from fear to excitement to apathy.

(C): Notice & Take Down Pt. 3

by Howie Cockrill

In Part 1 and Part 2 of this article, I outlined the 4 types of Service Providers qualifying for protection under the DMCA and explained the 3 types of copyright infringement - strict, contributory and vicarious liability.

In Part 3, I provide an explanation of the DMCA's Section 512 - more commonly referred to as the "notice and take down" or "safe harbor" provisions.

(C): Notice & Take Down Pt. 2

by Howie Cockrill

In Part 1 of this article, I outlined the 4 types of Online Service Providers (OSPs) that qualify for protection under the DMCA and the 3 types of infringement liability.

I also explained the concept of "strict liability."

In Part 2, I discuss the "contributory" and "vicarious" infringement liability and explore the notion of no liability for copyright infringement. 

(C): Notice & Take Down Pt. 1

by Howie Cockrill

If you are an individual or company offering a service on the internet, you may already be aware of “notice and takedown” or “safe harbor” rules for copyrighted content online.

If not – now is the time to learn. 

These rules, enacted in the 1998 Digital Millennium Copyright Act (DMCA), may just protect you and your website from landing in hot water for copyright infringement.

In this series, I will discuss the safe harbor provisions of the DMCA, who they apply to and the varying types of liability associated with online copyright infringement.

Keep in mind throughout this article that I have oversimplified many of the legal concepts and issues in order to provide a layman's overview of the subject. 

As always on MELON, the specifics of any particular situation will probably require a more in depth understanding and analysis.

Events: SanFran MusicTech Summit

The SanFran Music Tech Summit is just around the bend - Thursday, May 8th @ the Hotel Kabuki in Japantown. 

BEAT-Law's Howie Cockrill will be on the "Legal Issues in Searching, Linking and Blogging" panel @ 9:20 am, moderated by Joe Gratz of Keker and Van Nest LLP. 

The other panelists are Andrew Bridges (Winston & Strawn LLP), Mark Palermo (ASCAP, Dir. of Special Projects), and John Potter (DiMA, Exec. Dir.).

From the SFMT website:

"The SanFran MusicTech Summit will bring together digital thought leaders from the San Francisco Bay Area, as well as from all around the country, to the region which currently leads the way in innovating (both socially, and technologically) new ways of interacting with both music, and musicians.

We will be working long term to help enable a sustainable, ongoing, Northern California based music and related technology market."

Hope to see you there!

Events: REMIXER AUSTIN @ SXSW

If you're heading to Austin's SXSW music festival, by now you are probably sifting through reams of info about parties, panels, bands and barbecue. 

You may even be trying to concoct something vaguely resembling a schedule. 

Isn’t it all just ex-austin?!

BEAT-Law's "REMIXER" is here to save the day (or at least the early afternoon).

REMIXER AUSTIN is BEAT-Law's relaxing gathering in Austin for industry folks to hang out, have a drink (or two) and swap stories from the worlds of entertainment, technology, business and law.  

REMIXER AUSTIN details:

• Date:   Saturday, Mar. 15th
• Time:  12:00 noon - ???
• Place:  Bourbon Rocks - 508 E. 6th St.
• Note:   For best socializing - arrive by noon
• RSVP:  Click here.  Type "REMIXER" in the same box as your name.