Monday, January 5, 2015

Music Copyright: What Does it mean for you?

Originally Published 1990, Revised 2009, 2015
by Bob Moffett

I originally wrote about this topic in response to the many regional disc jockeys using dubious duplication methods to supply their mobile outfits with multiple music libraries. The implication being that piracy might also imply a more systemic lack of vendor ethics and give consumers pause about my competitors.  Unauthorized recordings had quietly grown to an epidemic by the advent of the CD-R and the issue was heating up even before the internet and public menace of file sharing exploded. I am still receiving periodic inquiries and comments about the piece more than 20 years after the very first incarnation  appeared in a regional bridal magazine. Here I attempt a rewrite to more comfortably answer the kind of questions interested readers have most commonly posed.  I hope to offer something useful and informative whether you're a disc jockey yourself, a confused consumer, or a copyright anarchist.

I can't speak to all issues of intellectual property rather, I consider here only prerecorded musical works. These are the songs that fill your iPod or that DJs and bands might play at a wedding or other event. What can or can't you legally do with this material and who is responsible for what?   Consumers, businesses, and disc jockeys without any formal vocational copyright education are often left wondering what it all means in everyday practice. I'm going to address this from the perspective of the disc jockey because this is the person in the middle; between consumers and businesses who's applications often traverse and even straddle multiple licensing issues as well as the lines that define commercial or private use. 

Music licenses are permissions regarding how music is used or distributed. That permission may be a commercial license negotiated or purchased from a copyright holder, or a legal permission codified in the law, such as private or personal use or specific fair use. The two most common license issues for a DJ or consumer are performing rights and the mechanical or recording rights.  Businesses can often find themselves also in need of a synchronization right. This bundle of many various reserved permissions is what we refer to as Copyrights.

We also have to understand users and the use in question if we are to properly apply the licenses or permissions involved. It is important to know that in Copyright law the user is typically the beneficiary of what is being done and not necessarily the person we see owning, playing, or working with the particular content. For example, a DJ for hire is not for legal purposes the user in the majority of circumstances which you might find one. The fact that a DJ is being paid or employed does not make him the primary beneficiary of how the music is being used, and that payment does not itself constitute a commercial use. This is the concept most people get stuck on  - thinking that commercial use is defined simply by money changing hands.  Commercial use is defined by the broader concept of commercial benefit - not simply monetary payment or payroll.  Money may or may not be the thing of commercial value in a realized benefit.

To illustrate this, consider a pub with an employed DJ.  There is no direct correlation between playing music and the DJs paycheck. The DJ is compensated for his labor with no monetary variation with what emerges from the audio system. The bar however, benefits substantially in the form of increased patronage, higher food and beverage revenues, and greater profit anytime the attraction of a DJ or band is present. The commercial user is the Pub not the DJ. Consequently it is the Pub owner that is required to maintain an active performance license from a rights management agency such as ASACP or BMI.  

This is a tough concept even for DJs, many of whom think that because they get paid to work they must be a commercial user. It's simply not the case - the law looks to the employer and any benefit derived from the deployment of the copyrighted materials in that commercial enterprise or promotional event.

This now brings us to the private employers - weddings, bar mitzvahs, and all manner of family events for which one might want music.  The user in this instance is again not the DJ or band rather, the person or entity hosting the event.  If that event such as a wedding reception is comprised chiefly of one persons family, friends, associates, and circle of acquaintances, the event is deemed private and the Copyright Act expressly exempts the affairs of private citizens from claims by any Copyright holder regarding a performance royalty. There is no copyright permission or license needed by a private person or DJ for hire to perform in this manner.

Finally comes the business employer - that entity who decides to have a DJ play in the center of the shopping mall, at a fashion show, or during their grand opening. Again the user is the employer and just like the pub there is a commercial benefit in play. A one-time or recurring performance license is required for these kinds of retail events.

One thing we haven't discussed in each case is the ownership of the music being played. For the purpose of performance rights (royalties due) it doesn't matter. The DJ can use his own music, a collection owned by the pub, or selections loaned or provided by by others such as the bride or her guests.  We should also clarify what that label on a record or CD means when it reads: "For Private Use Only - Not Licensed for Any Commercial Use."  This does not bar anyone from using the record - it is simply a reminder that if you are a Pub owner and have not yet obtained a performance license then NOW is the time to get one. Performance licenses are usually (but not always) purchased separately from the CD or music file itself. If you are a DJ and do not belong to a music pool you'll be relieved to know that label appears on nearly everything produced including the promotional material given to us for free.

We have presumed thus far that all of those selections being played are original and legitimately obtained recordings owned and retained by somebody involvedThis is where we jump off to look at unauthorized duplicating, recording, and file sharing of music.

There is no unique blanket licensing arrangement available to a disc jockey, pub, bride, or entertainment company in the U.S. that would allow one to duplicate or make copies of copyrighted musical works.  Furthermore, the record labels generally do not grant permissions that compete with the wholesale and retail products already in licensed distribution. DJs are required just like everyone else to purchase their music through legitimate retail/wholesale channels or licensed subscription services. Duplication of these materials for the purpose of expanding operations requires mechanical licenses and is otherwise strictly prohibited. It matters not if the material was bought at a discount or given on a promotional basis. There is no implied license to duplicate it. The permission must be expressly obtained from any and all individual respective copyright holders with an enforceable interest.

The Audio Home Recording Act which allows consumers to record a copy of a favorite song for their personal use (AHRA Section 1008) does not apply where individuals are involved in the distribution of a product to multiple users within a trade or business. A DJ company in the U.S. that reproduces compilations of music to distribute among it's DJs is in fact, engaged in piracy. That may differ in other countries like Canada where the laws are different. Here in the U.S. it is actually Anti-Trust Law not Copyright Law that makes that kind of blanket licensing power unattainable by any one agency.

This means that asking a DJ to make CDs for you to use as wedding favors is not cool. Neither is it okay for the DJ to share duplicates of a hard drive with other DJs or Pubs. Businesses who want to add music to a promotional or training video, or wedding photographers and videographers making montages and family albums and other tangible recordings need to acquire synchronization rights for any copyrighted music included.

Commercial Rights
The purpose of the copyright law has never been to deny consumers the portability of their music, but rather to protect the commercial rights of the people involved in the production and distribution of creative works. That includes not only the performing artist, but the authors, composers, recording engineers, post production mixers, the record company that manufactures the product, and the wholesale/retailer who distributes it. Any number of persons may hold a specific interest in the right to record, manufacture, or distribute these works. 

The Harry Fox Agency in New York is one such clearing house which specializes in the process of securing many of these other unique license requirements.  To inquire about performance licensing in the U.S. for you commercial event or establishment contact ASACP (American Society of Authors, Composers, & Publishers,) BMI (Broadcast Music Incorporated,) or SESAC (Society of European Stage Actors & Composers) for more information.  Outside the U.S. seek out the appropriate Performing Rights Organization (PRO) for the country in question.  For information specific to piracy contact the RIAA anti-piracy unit. 

Law Enforcement
While the risk of being caught is remote, it is not without precedent. Disc Jockeys have been caught and successfully sued for copyright damages. The law (Title 17 U.S. Code) provides for fines, imprisonment, and seizure of any or all equipment used in the production of pirated recordings. Civil law allows the copyright holders to sue for damages. In recent years a civil complaint filed by the RIAA against a Pennsylvania DJ company resulted in a damage settlement for $250,000.00   A $10 million suit was also filed a against an Omaha DJ franchise which created distributed it's own unauthorized CD compilations to it's franchise member DJs. That case was also settled. The DJ company in turn sought relief from under it's insurer only to discover that damage for piracy which is an express illegal activity does not fall within the scope of generally liability or errors and omissions.
Greater Boston & New England