Long before iTunes, Beatport, Grooveshark, Spotify, etc. created, and at the same time, fragmented the market for digitally-delivered music, long before paid music downloads and streams, and long before music videos on demand, major record companies like Sony, Universal, and Warner hugely controlled the creation and distribution of recorded music in the form of CDs, tapes and vinyl; thus, neatly they controlling the content.

The majors had the A & R people and the street teams and the big marketing departments and increasingly through the 1980s – 90s they were trying to outdo each other by breaking new artists they had “developed” in-house. At the same time they were trying to outsmart each other and the marketplace by signing new acts in various styles like a musical buffet: singer-songwriters, boy bands, rockers, and rappers, simply to have them ready for release, if deemed needed to establish chart position. More than a few artists got put on hold indefinitely with ridiculously expensive albums produced on fully-recoupable budgets that were never commercially released because the major labels were jostling for chart position with other priorities.

The results were mixed, and while the jury was still out on whether all of that was fair or necessary – the bottom fell out of the price for digital recording gear and then the Internet swept in. The ability to create an album or video inexpensively, and have wide distribution, was in the hands of everyone. There was no need to sign a restrictive record deal once the act had broken, the act could sign a license and keep all the rights for themselves.

You would think this would be liberating; but it is interesting how most often, the more things change the more they stay the same. In fifth-century B.C. the citizens of Athens were debating whether the idea was most important than the people who implemented it, and Socrates insisted there was never a single “right answer” to anything. That said, Socrates was put to death. Today we have fragmentation in the creation, distribution and consumption of music versus centralized hit-making. This has been impossibly stressful on the entertainment industry, where most diehards, up-and-comers, dreamers, thieves, and executives would insist that they most definitely have a line on the next best thing. The people who bring you the music, versus the ones who make it, have a need to stay on top.

Take record deals. Until the end of the 1990s, the standard deal was, the record company owned the recordings outright. Not negotiable. The artist got a royalty from the deal that was laughable. Maybe 16 – 18% of the published price to dealer, less a 25% packaging deduction, less maybe 4 points to a producer foisted onto the act by the label. This was all recoupable against recording costs that took several paragraphs to describe, and the cost of producing as many videos as it took to ensure that the act remained unrecouped.

Then almost overnight, outgunned by the Internet and by acts that were appearing out of nowhere, and with their old A&R departments being disbanded, the big record companies started to fail. Then increasingly, smaller labels came to the front, doing their own thing online and on the road without major label support. When the bigger labels wanted in, they licensed the tracks.

The concept of licensing, versus the record deal has been a phenomenon starting at the end of the 1990s, coinciding with the advent of digital distribution and MySpace. The licensor now retains copyright, and allows the licensee to use the copyright for a defined term either exclusively or non-exclusively for a defined territory, for defined uses, for a royalty, based on net receipts, with an audit clause. If the license is made exclusively, then the licensee gets to sublicense whatever rights were granted but nothing more.

This has re-told the story of record companies signing onerous deals where they controlled all the shots. The 360 deal is a side step-where the role of record companies, publishers, personal managers and booking agents have merged into the hands of one company or team. Pros and cons have been discussed elsewhere.

For exclusive licensing deals, however, there has been a tendency for the terms and conditions of the license to become suspiciously like a good-old-fashioned record deal. Examples in deals I have seen recently are as follows: purported ability by the licensee to grant a sub-license for a term of years to a third party that exceeds the term of years of the underlying head license; permanent split of revenue from the licensed music regardless of the end of the term; and purported ability to collect and keep a percentage of income that is not derived from the exploitation of the licensed works.

The rationale of the licensee has merit. Control is needed. Organization, knowledge, and resources all come into play. The licensee adds value. The lasting contribution of a record company to the value of the licensed tracks is real in the eyes of the record company. A tail-end royalty after the end of the license term often has been used to compensate for this contribution. However, it must be said, there is a difference between negotiating for what is fair, and grabbing what is not. Because an exclusive license may grant a bundle of rights for a certain term, does not automatically mean that the licensee owns those rights beyond the defined term of years or the scope of the grant; and does not automatically mean that unrelated rights should be included. Why, that would be downright grabby.

What are the ethical issues typically seen in an entertainment-related negotiation? How do you maintain professionalism and act as the voice of reason when your client is prepared to risk it all for a shot at fame and fortune? What is the best strategy for dealing with other counsel to get the best deal without stepping offside?
Who are your clients in the entertainment deal, and who are the phantom ones? How can you spot hidden agendas? Tips on dealing with parties and lawyers from outside the jurisdiction.
Join us as we share strategies on how to keep it clean and smooth in the big-bad world of entertainment-related negotiations.

Co-Presenters:
William Genereux, Genereux Law Professional Corporation, Toronto
Jason Meloche, Benson Percival Brown LLP, Toronto

This program has been accredited by the Law Society for 1 Professionalism Hour(s).
This program has been accredited by the Law Society for 1 New Member CPD Hour(s).

The music industry remains in denial, citing threats to its channels-of-distribution. Frances Moore, the chief executive of the International Federation of the Phonographic Industry states in its Digital Music Report 2011,

“As we enter 2011, digital piracy, the lack of adequate tools to fight it, remains the biggest threat to the future of creative industries.”

Really? How about lack of a good product? The industry has been experiencing a fundamental change over the last 10 years: the culture of “hit” music that the industry created has resulted in a lot of crap that people don’t want to buy. They want to listen to it, then delete it when the next hit comes along (there are lots of exceptions of course – we’re talking overall trends here).

And how about letting people subscribe to music on demand, rather than making them buy a copy of something that has a lock on it? How about massive, widespread licensing of music so that everyone can access everything, exploding the myth of ownership of music. By making all music available to everyone for a small amount of money each, collected at a choke point like a mobile phone company or an ISP, the revenue base can be huge.

This brings us to The Album.

Billboard reports this week that Cake scored the lowest-selling No. 1 album since SoundScan began tracking sales in 1991. Cake’s debut sold 44,000 albums. Cake? Albums? Cake was written off as a one-hit wonder back in the 1990′s when rock was still Modern. Maybe this is a great album from the Cake guys, but the problem is, it’s an album. We don’t buy albums any more, apparently. We buy singles.

People have been buying singles because they can. iTunes lets you select the hit song from an album for 99 cents. You don’t need to buy the whole album. This results in revenue decreases to the record companies and the music publishers. But wait! The music industry has adapted quickly! Artist releases tend to be pushed out as singles projects. They’re “hit” driven, but what is a hit? It’s a song that’s popular with a lot of people. Yes, as a strategy, to go out and create a song to be popular with a lot of people, requires a kind of deliberate dumbing-down of the content. Smoothing off the rough edges. Playing by the rules. This is what we have created. Industry and consumers are both to blame. People don’t even talk about selling-out anymore. It’s already happened, and it’s the elephant in the room.

Google candidly admits that it scans every email for relevant content words, as a method of delivering targeted ads when a person views their Gmail on Google’s web platform. As noted by computer expert Leo Notenboom, “the software that selects the ads reads the contents of the page looking for relevant keywords to get a sense of what the page is about, and then tries to display ads that are targeted at or near that same topic.” This is similar to a web browser (e.g. Safari, Internet Explorer) collaborating with Google in real time to deliver targeted ads while you are viewing a website. For example, as we’ve all experienced, if you are looking at an automobile site, the Google ads on it likely will magically show automobile tires for sale. If the Gmail is sent to you directly by POP then there is no automatic content scanning, because there is no open web browser to scan.

This type of scanning is used not only by Google and web browsers generally, but also by sites like Facebook where it will scan what you’re doing to see how it can better target you for ads. Thus the ads are more effective, meaning that advertisers will spend more money, which in turn generates more revenue, to better allow these free services to have more features. Email already is inspected by packet sniffers along the way to your ISP’s servers, and by spam filters too. If you don’t like the additional inspection by Google on its Gmail platform you can always not use it, or refrain from opening it in a web browser to be on the safe side. But, what to do about that pimply faced IT kid at the office over in cubicle 37 who has access to everyone’s email, included boss’s?

This is something beyond mere fame. A person in the news may be known to millions, but often, what do we really know about that person? Fame alone does not say much. A person with a million Facebook friends can still live behind a mask. Of course, it is the way that information is shared that is the key.  Social media enables a person’s every move, and thought, to come out into the public domain. As more and more details pour out, their personalities becomes outsized.

Through the ages there always have been well-known people. The pharaohs of Egypt, the kings and queens of England, and more recently movie stars and starlets, are all examples of mere fame. What we are seeing now is an unprecedented expansion of the publication of the daily details of other people’s lives. But wait, people are not getting more interesting. In fact the reverse is probably true where a lot of what we do is quite mundane, and imitation is so prevalent and made so easy by the global networks of information that we use that it is really hard to be unique. Putting aside those quality issues, the fact is, that people simply have a lot more public “stuff” wrapped around them. Some might call it baggage. I see it, for better or worse, as their public personality.

The mega personality is something to be cultivated and managed like a personal brand, but the sheer size and reach of that brand is worth considering. Though privacy issues, and tensions between free speech and defamation, we already can see that the ubiquitousness of the mega personality is causing unprecedented social head butting. Not everyone will be famous at the same time, too many egos in the room leads to headaches for everyone. Social media is said to be a conversation, but to keep it from becoming a shouting match or an argument, as a society we need to stay on top of adapting existing forms of etiquette and developing new ones. We owe it to ourselves to publish, teach, and govern ourselves by, civility in the social media sphere.

1. Movement, aka DEMF (Detroit, US) – Housed in Detroit’s dissonant downtown of decay and delight, one will encounter one of the largest congregations of techno lovers, old and new fashioning everything from proper three-piece suits appreciatively nodding alongside the dj booth, to candied-out fun fur legs and arms flailing in all colours of ringed bracelets. This festival is of many ages with a historic echo that reverberates through the derelict buildings and across the waters to the north. Not to mention the most interesting and ‘educational’ taxi rides you may ever experience.

2. Mutek (Montreal, Canada) – Eleven years running, Mutek is more a celebration of the art of electronic music than the typical dj-dancer feedback-loop one generally encounters at festivals. Patrons will surely find driving beats and relentless productions pulsating through the bodies of dancers at the club-held events, however they will also find a world of techno ‘heads’ attending day lectures and unique performances of visual and sonic sensory astonishment, all in a beautiful 117-year-old theatre (Monument National). Also, if the weather holds up, patrons can dance outdoors under a giant statuesque piece of contemporary art to the compelling beats of Picnik Electronik’s artists, overlooking the cityscape as night falls from the island.

3. Sonar (Barcelona, Spain) – Definitely one of the most highly attended festivals of the year for techno enthusiasts. Unlike other festivals that have a more organic, outdoor feel to them, Sonar is very much a ‘city’ event. Crowds of party people navigate the tiny, captivating streets of Barcelona for the week surrounding the event – making if feel like the whole city is there to unite in their affiliation to this electronic subculture. Residents routinely keep away from the main strip (Las Ramblas) even more so than during the regularly busy tourist season. This is Sonar Week and it’s all about networking, partying and after partying, and when there’s no more to be had… Chiringuito parties on the beach lure you in for days into nights into days.

4. I Love Techno (Ghent, Belgium) – One of the longer-running and more popular festivals in the world of techno tourism, I Love Techno, held at the Flanders Exposition grounds in Ghent, Belgium is on its 15th round this year. The festival maintains its grass-roots beginnings by bringing in hundreds of volunteers to do everything from promotion, organization and design to the creation of the ‘official track’ of this year’s event which will be featured on the ILT promo cd.

5. ADE – Amsterdam Dance Event (Amsterdam, Netherlands) – Also in its 15th year, ADE, with its corporate kick of serious sponsorship and support is expected to draw even more than the 90,000 party people it pulled in last year, with over 700 artists in 41+ venues this festival takes its small but decadent home town to a whole new level of dissipation and dance.

The Internet has given platforms to a lot of pundits, many of whom have small points of view but big voices, to howl about the theft of ideas. Especially in the area of advertising – which occupies public, accessible space – a lot of people get attracted to the noise, cheerleading the trend to “out” copycat styles, imagery, lighting, themes, techniques, etc. This may be short-term fun, but it’s narrow thinking for the longer term. It’s regressive. Sadly, the misanthropic view is that individuals and societies tend to make the same mistakes over and over. In this case, just as the Internet has given us give the tools to set ourselves free, we clamor to constrain ourselves. Sites like http://www.joelapompe.fr.st/ and blog posts like Ryan Healy’s “The Ethics of Idea Theft” are a grand meeting place for idea-cops worldwide. Get over it people. The point is that original ideas don’t hardly, ever-ever exist. Culture ought to be a dynamic accretion of ideas. There is no such thing as a completely new idea. Please, how naïve! There are only wonderful, endless manifestations of ideas built on each other, mirroring and referencing each other.

Imagine a big open public room. Nothing is confidential. Everyone can see what everyone else is doing. A hundred people come in, stand at easels, grip their pencils. They are asked by a woman at the front to sketch a picture of an apple on a table. They can clearly see each other’s work. When they’re done, each one owns the copyright to their sketch, but they don’t own the idea of an apple on a table. Copyright protects the maker of a work from having it reproduced by someone else. If the best, most beautiful sketch of the apple on the table was scanned by someone and then used without permission, that would an infringement – rightly so. But to protect the rights of the person who came up with the idea of the apple on the table? Of course not – that would be totalitarian. What about a person who suggested the apple should be green instead of red, or the person who thought the apple should have a happy looking worm in it? Should they get a credit on someone else’s sketch if the other person wants to draw a green apple with a worm? Where do you draw the line? Simple. Ideas want to be free. Why do we insist on giving them ownership?

Harrison casts light on the issues and implications of copyright in music (specifically, musical samples) through the history of the “Amen Break,” a six-second drum sample from the B-side of a chart-topping single from 1969. This sample was used extensively in early hip hop and sample-based music, and became the basis for drum n bass and jungle music… a six-second clip that “spawned several entire subcultures.”

The original creators of the Amen Break have never sought legal action to claim ownership of this notable six-seconds of sound. It seems that by the overall amount of its appropriation by producers and Dj’s after the advent of sampling technology in the early 1980s the break had entered into the public domain. Harrison notes, “to trace the history of the Amen Break is to trace the history of a brief period of time when it seemed digital tools offered a potentially unlimited amount of new forms of expression; where cultural production at least musically was full of possibility by virtue of being able to freely appropriate from the musical past, to make new combinations and thus new meanings.”

There are two copyrights involved in the Amen Break. The first is the copyright in the sound recording: if the owners of the masters could prove copying of their recording, then this could be the basis for an infringement claim. However, it appears most uses have been re-recorded (e.g. the drum tab on Wikipedia is readily available, and certainly electronic kits would involve a re-recording – not only to ‘clean up’ the sound quality, but also to chop it up, space out the individual beats and create a new sound conducive to drum n bass).

The second copyright is in the musical composition. This is the interesting part. When the original recording was first released, the break was not what would at the time have been classified as a hook. It was a break, which by the standards of the day, I would argue, was not unique enough to attract copyright protection. Since then the break has been sampled and used to the point where it has attracted an independent identity (with the help of advancements in sampling, recording, and production technology). The interesting part is, who owns the new identity? Does a new identity accrue back to the original copyright holder? Is it something that one of the early appropriators could claim copyright in? Is it a public domain identity? Seems it’s the latter, in that its use is ubiquitous and no one person can step forward as being the original user of the same four bar beat used in a manner that now by more contemporary standards is unique.