Ask Attorney Scott Hervey

In The Music Industry? Have Legal Questions?

Past Questions:

What is the law concerning using music that has a copyright on it?	~	My band was wondering what we would have to do to get copyright permission from the band X
a song I wrote is on a compilation without my permission... What can I do?	~	I am not making money yet on my music but was wondering if I need a business for tax reasons?
A publisher wants to publish one of my songs. How can I tell if it's a good deal or not? Any advice of where I can learn more?		As a musician and playing in a band. Is there such a license required for playing music and get pay (i.e., business license)?

Question...
This is a great resource for "DUMMIE Musicians". Please help clarify my
concerns. As a musician and playing in a band. Is there such a license
required for playing music and get pay (i.e., business license)? And how
many license do I/we need, if my band perform 3-5 cover songs at pubs?
Thank you so much.

Answer:

There are a few licenses you and/or your band may need. First, be sure the guy driving the van has a drivers license. All kidding aside, you may check in with your city to see if they require a business license. Since business licenses are a cash strapped local governments to raise money, although it may seem odd, local regulations may require a business license. You may also want to consider filing a fictious business statement under the name of your band. While not as good as a State or Federal trademark filing, a dba filing does provide you with limited protection of the band name in the county where the filing was made. It also allows your band to open up a bank account in the name of the band and deposit checks made payable to the band. I have a feeling your question regarding a license was particularly regarding a license that will allow you to play cover tunes. As you know from one of my earlier Ask The Lawyer segments, in order to play a cover of a song that is owned by someone else, you have to get a license from either ASCAP or BMI. Usually it is the responsibility of the tavern or club owner to get these licenses. As a responsible musician, you should check with the club owner or booker to see if they have the proper license. If they don't, you should seriously consider dropping the cover tunes.

Question...
A publisher wants to publish one of my songs. How can I tell if it's a good deal or not? Any advice of where I can learn more?

Answer:

It is hard for me to tell you whether or not the deal the publisher is offering you is good without more information. You can learn more about publishing by reviewing the ASCAP (American Society of Composers, Authors and Publishers) at www.ascap.org. You can also consult with an entertainment lawyer who has experience with publishing and get his input on whether the deal is one worth pursuing.

Good Luck!

Question...
I am a new artist, and I write and sing all my own creations. I am not into making any money as of yet, but was wondering, since I am spending money and not getting any back, should I start some sort of music business, officially for tax purposes and if so, since I am a music artist, what type of business , publishing or what type of company name? Thanks...

Answer:

Your question involves issues of tax law. In essence, you want to know whether the expenses you are incurring in connection with creating, recording and performing your music are deductible. The answer is, it depends. If you engage in your music activity with the intent to make a profit, then you can treat your music activities as a business and take as a deduction all of the deductible expenses incurred in connection with your business. Previously there had been a great deal of litigation regarding whether individuals could deduct the expenses incurred in connection with a part time business that bordered on being a hobby. In response to the litigation, Congress enacted Tax code section 183 which gave taxpayers a rule of thumb to follow in determining whether an activity is a business or a hobby. The rule basically says that if an activity makes a profit in three of any consecutive five year period, it will be presumed to be a business in the other two years. Assuming your primary intent behind your involvement in music is to make money, even if you don't make profit at any time, you still may be entitled to deduct expenses as business expenses. However, if audited, you will have to convince the IRS that your primary purpose for the activity is to make a profit. To show that your music activities are profit motivated, you need to demonstrate that you are treating it a business like manner. You should have a business name and file a fictious business name statement; you should have stationary, a separate address for your business (a PO Box will work), maybe a separate phone line and certainly a separate e-mail address. Because you are a song writer, you can also register your publishing company with BMI or ASCAP. One closing bit of advice...hire a CPA to help you with your taxes. CPAs are well versed in this area, and they can help you avoid an IRS audit.

Question...

In 1979 my band recorded a 45, the song on the "B" side was a song
that I had written, well it seems that that this song has made it to a
compilation without my permission....Do I have any recourse ?

Answer:

Depending on the circumstances, you may or may not have any recourse.
Assuming your band recorded the song under a standard recording
agreement, the label probably owns the copyright to the sound recording
and would have the right to license any of the tracks for inclusion in a
compilation without having to get your band's permission. However, the
band would have to be paid compensation from the sales of the
compilation. Also, as long as you did not assign your copyright in the
song (as opposed to the sound recording) you still own the publishing
rights and would have to be paid mechanical royalties.

Assuming that your band self recorded the song and it was just lifted
without permission by this pirate (this would not be the first time I
heard of this happening), this would constitute copyright infringement.
The recourse you have is to sue for copyright infringement. If this is
the case I recommend you contact a lawyer.

Question...

Me and some friend of mine are starting up a band, and we were wondering what we would have to do to get copyright permission from the Super Tones to play their music at concerts, gigs, and recording CD's. please take time and help us. we need to know what is legal and what isn't, as far as copyright is concerned. if it isn't too much trouble, could you also help us get permission from Five Iron Frenzy and the Skadoodles? Thank you for your time, and please respond soon. ---Neil---

Answer:

First, let me commend you for recognizing that you need permission to play songs that belong to other bands. As the recent Napster litigation should have taught everyone, music is not free. You can't steal another band's property (song) and use it for yourself to make money. You have to ask permission.

In the music industry, you ask permission to use other band's music by obtaining a license. The type of license you need to get depends on how you intend to use the music. If you plan to re-record another band's music then you must obtain what is called a mechanical license, but if you plan to perform the music at clubs, concerts, etc., then you need to obtain what I like to call a performance license (it is really just called a license, but I like to call it a performance license to stress the difference).

Obtaining a mechanical license is not a very daunting task. Because United State's Copyright laws required that once a copyright owner has recorded and distributed a work (i.e., a song) to the U.S. public or has permitted another to do so, the copyright owner is required to grant a license (called a compulsory license) to another else who wants to record and distribute the song. A compulsory license is not free. The U.S. Copyright act provides for the compulsory license only upon payment of a licenses fee (called the statutory compulsory rate). Currently the rate is 8 cents per song for songs five minutes or less, or 1.55 cents per minute for all songs over 5 minutes.

If you want to obtain a mechanical license, the first place to start is the Harry Fox Agency. ( www.harryfox.com ) The Harry Fox Agency represents publishers by licensing their work and collecting royalties on their behalf. The Harry Fox Agency web site can provide you with more information and can even process your application for a mechanical license if it represents the artist whose work you want to use.

If Harry Fox does not represent the artist who owns the work you want to use, you should contact the artist directly to arrange for a license. If Harry Fox does not represent the artist and you either can't get in touch with the artist or the artist refuses to grant you a compulsory license (which they really can't do - that's why it is called a "compulsory" license) you can still get the license you need. The process is somewhat complicated and involves filing a number of documents with the U.S. Copyright Office. I would suggest that if it comes down to this, you obtain the help of an attorney.

Obtaining a performance license can be just as simple as obtaining the mechanical license. There are a number of different agencies (called performing rights agencies) that license these performance licenses: BMI ( www.bmi.com ), ASCAP ( www.ascap.com ) and SESAC ( www.sesac.com ). Because the performance rights these organizations license vary (live performances, radio play, television, cable, Internet, bars, restaurants, hotels, shopping centers, etc) the rates charged will also vary. The license will have to be obtained from the agency that represents the artist whose work you want to perform. The website for all three agencies allow you to search the list of artist they represent.

Some people mistakenly assume that musicians and entertainers must obtain licenses to perform copyrighted music or that businesses where music is performed can shift their responsibility to musicians or entertainers. As the artist, the good news for you is that the law says all who participate in, or are responsible for, performances of music are legally responsible. Since it is the business owner who obtains the ultimate benefit from the performance, it is the business owner who obtains the license. Music license fees are just one of the many costs of doing business. However, as a practical matter, it is best to check with the venue before you perform any cover pieces; they may have strict policies in that regard.

Question...

What is the law concerning using music that has a copyright on it?

Scott: If there is music that has already been recorded, depending on how
you want to use it you may have to get a license. For example, if you
want to re-record a piece of music that has already been recorded, you may
have to contact The Harry Fox Agency (www.nmpa.org/hfa.html) and obtain
what is called a "mechanical license" If you don't want to record a piece
of music, but just want to perform it in your show, you need to obtain
what is called a performance license. You can obtain a performance
license through the performance rights society that represents the artist
(ASCAP(ascap.com), BMI (bmi.com) or SESAC(sesac.com)) You need to get a
license to either perform on record someone else's work because is because
music is a copyrightable work. The owner of the copyright enjoys exclusive
rights in a copyrightable work, including the right to reproduce the work
in copies or recordings, the right to distribute copies or recordings of
the work to the public by sale or other means of transfer, to perform the
work publicly (through various means of performance, including digital
audio transmission), and to create derivative works. There are a few more
rights, but those are the most important rights that relate to music.

Q: So if a local band is going to do a cover of a copyrighted song, what
do they need to be aware of?

Scott: Either the band or the Venue should get a license from either
(ASCAP(ascap.com), BMI (bmi.com) or SESAC(sesac.com))

Q: I know of a hundred bands in town that play covers all the time and I
doubt any of them get a license

Scott: There are tons of bands that do cover work, but don't get license's
and technically they can get in trouble. Don't kid yourself; what they are
doing is called copyright infringement. The various performing rights
societies have "detectives" who go around to bars, restaurants, and clubs
specifically for the purpose of identifying businesses that are publicly
performing (this includes a restaurant playing music over their sound
system) music without a license. Usually the performing rights society
will contact the business and give them the opportunity to license the
work before filing a lawsuit.