Best of Last Week

@jimmybuffett does ask terrestrial stations to pay royalties; he is part if the @musicFIRST coalition.

9 Spotify tools for hardcore music fans

Why Apple has a good shot at killing the freemium streaming music model @jillkrasny via @Inc

Need MCLE credit? Check my panel: "Royalty Income Meets Marital Dissolution Dividing, Managing and Accounting"

Molly Neuman: From Riot Grrrl Founder to Indie Label Advocate - Digital Music News

Lady Gaga's Parsippany #producer loses $7.3M suit to #songwriter

Taylor Swift's Extreme Measures to Keep "1989" From Leaking via @YouTube

Study from Pandora Touts the 'Pandora Effect' on Music Sales | Billboard #promotionaleffect

Don Henley: Record Companies 'Not Going to Roll Over' on Copyright Issue | Rolling Stone

RT @musicregistry: The Million Dollar Record Label Theft, & How It Came Crashing Down

Fortune: Pandora's plans for growth

An #iTunes #contract

SiriusXM Slammed Yet Again As New York Judge Rules in Turtles Lawsuit - Hollywood Reporter

# # #

For more music news, follow me @Auditrix.  For interactive games and other IP royalty, business and litigation news, you should follow me @RoyaltyExpert.

Last Week's Top Links

Several popular items I posted last week on Linkedin and Twitter shared a theme named Irving Azoff:

• "If you're looking for money, you're better off selling one of your planes." - Irving Azoff to Jimmy Buffett when Buffett asked Spotify for a "raise"
• Azoff's New Global Music Rights Venture Seeks Higher Royalties for Songwriters, New York Times article by Ben Sisario
• Hollywood Reporter Exclusive by Eriq Gardner: Irving Azoff Says That YouTube Lacks Licensing Rights to 20,000 Songs 

The big news in the music business last week was YouTube's announced launch of its Music Key service. In addition to the above-linked Hollywood Reporter/Irving Azoff piece, most of the inquiries spurred by my "What is Content ID?" blog post last week were regarding YouTube Music Key subscriber revenue.

However, another popular YouTube tidbit that I shared with my LinkedIn connections had to do with good ol' advertising revenue: Per Jason Calacanis, "YOUTUBE has grabbed about 10% of television revenue"

More music items that engaged my connections on LinkedIn include:

• "Performers & master rights owners..make about 14 times..[that of] songwriters & publishers..for..digital platforms" 
• Auditrix: Highlights from The California Copyright Conference's October 2014 Music Royalties Dinner
• "Spotify’s ties to peer-to-peer—a huge catalog, an on-demand interface, and a free, ad-supported version—means it threatens profits more than any other platform."
• “For a big hit today, there are about 700,000 #royalty #streams, just for one song,” Los Angeles Times quotes Willard Ahdritz

My Twitter followers @Auditrix were most engaged in the following items:

• Due to "court rulings, the royalty rate Pandora pays Sony/ATV reverted to the 1.85%...from the 5%" it negotiated.
• "There are no mutual funds for music royalties yet."
• EU Court rules content embedding is not copyright infringement | Music Week
• Will Half of Terrestrial Radio Stations Disappear? | Mark Ramsey Media LLC
• Spotify's Twitter campaign got hijacked by people demanding fair pay | Death and Taxes

On the copyright front, there was movement last week in one of the most interesting cases that I am following, between Smokey Robinson and his ex-wife, Claudette. Everyone I know who knows them both think it is too bad that they are litigating, so even though the issue of whether state community property laws or Federal copyright laws apply to royalties for terminated copyright grants is very interesting, I was nevertheless happy to read that the parties dropped their suit (see http://t.co/8pt5xyFxnQ) ...but, upon sharing this news in my @Auditrix Twitter feed, the reporter who has had the best coverage of this case - Eriq Gardner at the Hollywood Reporter - suggested that we have not seen the end of this dispute (see the link Mr. Gardner shared here and follow him on Twitter here).  In any event, if you are an attorney or business manager, keep an eye on this case - the outcome could impact your clients!

Tencent was another company in the news last week due to its partnership with Warner Music Group in China (see this, this, this and this), but the most popular bit that I shared about Tencent last week was via my @RoyaltyExpert Twitter feed, which focuses more on games than music: Tencent said that titles on its games portal QQ are better at making money than games on WeChat

Other top games items I shared last week:

• Game industry growing four times faster than US economy - ESA
• "Zynga may have stopped the bleeding for now: daily active user loss slows"
• Video Game Audits: What You Need to Know International Game Developers' Association's Business and Legal Webinar

# # #

For more music news, follow me @Auditrix.  For interactive games and other IP royalty, business and litigation news, you should follow me @RoyaltyExpert.

What is Content ID?

Content ID is a YouTube-owned tool that IDs copyrights embedded in content.

Copyright owners (i.e., record companies, publishers and, I assume, film and TV rightsholders) use Content ID to identify, tag, control and monetize content on YouTube.

The Content ID identification process starts when content owners provide Google with metadata and copies of their works. Content ID then uses digital fingerprinting technology to match these works to uses in certain categories of content on YouTube (e.g., matches to user generated videos, but not multichannel networks, which assume responsibility to pay rightsholders).

Not only can the © owner control (with other owners, if applicable) whether to leave the use up or take it down, but also it can choose to monetize (via advertising and/or subscriber revenue).  Some record companies get 35% and music publishers get 15% of ad revenue for user generated content.  (Big © owners can negotiate directly with YouTube, so those minimums and splits are confidential, but the some rates for indies are public, though they do not include the advances or minimums that major rights holders negotiate.)

Since > 1 billion users are on YouTube every day, it can generate thousands and even millions in earnings for well-managed content.  

Top Items Shared - Past Two Weeks

Here are the most popular news items in the world of music and interactive royalties that I shared publicly over the past couple of weeks:

• "Video Game Audits: What You Need to Know"@IGDA #WednesdayWebinar with "The Game Attorney" Tom Buscaglia
• EU Court rules content embedding is not copyright infringement | Music Week 

• Tricks to negotiating #screenplay prices: Q&A With Dinah Perez, Esq.

• "Sixty-one percent of people who buy CDs are 36 and older, according to MusicWatch's estimate."

• "More than 70% of the music consumed in the first six months of the year in the US was either downloaded or streamed"
• "The history of the Laugh Track" by Stephen Herrera

• Disney Wants to Build a New "Authentic" Search Engine... - Digital Music NewsDigital Music News

• Female PC gamers outnumber males - PC Gamer

• @bwerde The latter.  I think as video ad budgets rise, more artists will start to appreciate how much money can be made via YouTube though.

Recap of Last Week

Top items shared last week on LinkedIn and Twitter by Cedar Boschan:

L-R: Cedar Boschan, Austin Lucas & Kyla Akasha at The Observatory in Santa Ana

• Great post on music publishing valuation by Derek C. Crownover @dickinsonwright via @nekstbiz

• Association For Electronic Music highlights £100 million missing performance royalties | Complete Music Update

Auditrix:

Best of Last Week

• The California Copyright Conference's #Streaming for Dollars Panel @cacopyright #irespectmusic

• I just published "You Need a Better YouTube Strategy"

• @musicbizcast: Ep. #7: Chris Opperman's journey from the basement of UMPG to Record Label Ownership @chris_opperman

• Spotify curation startup gets bought by WMG  via @guardian

• Ford Seeks To Dodge Class Action Over Music Royalties - Law360

• The music industry: "What used to be a question of persuasion has become a problem of prediction."

• Americans are mad for music festivals, Eventbrite's study finds - NY Daily News

• The New Yorker: "Crooner in Rights Spat"

# # #

All the Ways One Can "Buy a Record"

My favorite octogenarian attorney recently asked me:

"Please give me a list of all the ways someone can buy a record."

I came up with the following and included uses that may not strictly constitute sales or phonorecords under the U.S. Copyright Act:

1 – Consumers can purchase permanent copies of recordings in various configurations, such as:

a.      From retailers (online like Amazon.com or brick and mortar like Target and Walmart) or directly from an artists’ website or at a concert (e.g., together with merchandise):

i.      Vinyl Record

ii.     Compact Disc

iii.    DVD

iv.    Embodied on video games

b.     Permanent downloads from music services (e.g., from iTunes and Amazon.com) and video game console manufacturers (e.g., Sony’s PlayStation network and Microsoft’s Xbox store)

2 – Also, consumers pay for access to listen to recordings by subscribing to a music service such as the following:

a.   Interactive services like Spotify and Beats (where users can stream on demand)

b.  So-called "non-interactive" services like Pandora and Sirius XM (which offer users less control over programming)

3 – Alternately, companies pay to advertise to listeners or viewers of free programming on services like YouTube, Vevo, MTV and the services mentioned in #2 above.  In this case, access to the recording is “free” to the consumer because the advertiser subsidizes the cost, but the consumer must watch or listen to ads in exchange for such free access.

4 – Finally, consumers who purchase electronics devices such as a Samsung phone or iPhone may find that music has been bundled with the device by the hardware seller, which pays the music rights holders for the right to do this (and thusly must build in the music cost in the device's price).

What ways to buy a record did I forget?

Please tell me what I failed to mention below!

Best of Last Week from The Auditrix

• 7 qualities of addictive games
• California Copyright Conference's "Are You Getting Paid? Best Practices for Unmatched Royalties" panel discussion, which I recapped here.

#IRespectMusic at the California Copyright Conference

• Why most people aren’t downloading apps anymore - Quartz

• UMG earns a "‘listener hour guarantee,’ which they know is going to up their compensation by about 40% — since it’s per listener hour, not per track, the artist gets screwed because it’s not attributable to a track, so the artist doesn't get a royalty." - Per Rich Bengloff of A2IM
• 30 years of the #music #industry in 30 seconds | Geek-Cetera
• Per @schuylermmoore 506 offerings are outside of #state #laws
  #crowdfunding @BHBA_EntLaw 

• Your Music #crowdfunding article by omarshamout (featuring quotes from me) - @LABJcommunity

• Six Strikes plan to eliminate piracy finally operating at ‘full capacity’
• What I spoke about last week to #business #managers:

Highlights from The California Copyright Conference's October 2014 Music Royalties Dinner

Last week, the California Copyright Conference presented a panel discussion entitled, "Are You Getting Paid? Best Practices for Unmatched Royalties"

October 2014 California Copyright Conference: L-R: Scott Berenson – Director, Claims Department at SoundExchange; Jake Wisely - President The Bicycle Music Company; Diane Snyder Ramirez – Vice President Royalty Accounting & Administration, Royalty Review Council; Chris Castle – Founder, Christian L. Castle, Attorneys, Austin; Anne Cecere – BMI, California Copyright Conference President; Not Pictured: Eric Palmquist - Vice President, Audit & Income Tracking, BMG Chrysalis

I tweeted a few insights from the panelists, such as:

One highlight was when panelist Chris Castle called on Henry Gradstein to speak on state copyright protection of pre-1972 sound recordings:

Henry Gradstein at the California Copyright Conference: Section 980 in California was amended to allow for common law (c) protection

But, a few tweets can't impart all of the valuable information that the panelists shared. To view the complete discussion, click here to join the California Copyright Conference.

#IRespectMusic

Eventually materials from the program will be uploaded here for anyone to access free-of-charge.

Top Items Last Week on LinkedIn and Twitter

Joe Sutton interviewed Mitchell Hurwitz at  Green Hasson Janks' Entertainment & Media Industry Forum

Mitch Hurwitz: The problem with TV is the Nielsen lie. @Netflix has the exact number. #ghjentertainment

Arrested Development's Mitchell Hurwitz' humorous keynote at Green Hasson Janks' Entertainment & Media Forum

Mitch Hurwitz: It cost pennies to put a #Netflix button on remote controls. Why didn't NBC do this? #ghjentertainment

Ilan Haimoff reveals #TV survey results at Green Hasson Janks' Entertainment & Media Forum

10/16 in LA: The Canadian #Copyright Board & #Canada Supreme #Court in the #rate setting process @ AIMP.org


10/22 in NYC: Jacqueline Charlesworth, @DavidIsraelite & Michael Sukin @ AIMP.org - #Copyright #Reform Developments

Other Popular Items Shared:

What changes do you think should be made to the #Talent #Agencies #Act and why? #TAA Q&A w/ Ed McPherson, Esq. http://bit.ly/1wcF2iV 

@schuylermmoore: If you do an #advertised 506 #crowdfunding offering, the burden is on you to verify investors are accredited buff.ly/Z5g7PY @bhba

Auditrix: Top 10 Items Last Week on LinkedIn and Twitter bit.ly/1s2mzDi 

“What gets measured gets improved.” -Peter Drucker

bit.ly/1s9SUcY

Report: Apple in Talks to Start Streaming Music Price War on.mash.to/1vDqrtC 

Super excited to speak tonight with some of L.A.'s best and brightest #business #managers at a #secret #location #CPE

Wife of Kingston Trio Member John Stewart Suing EMI over Foreign Royalty Distribution bit.ly/Z67hS9

http://

"The last small music publisher left in the Brill Building" nyr.kr/1s2SlAf

http://

@theroyaltymkt: "Think of a royalty investment as a variable income stream with a long-term embedded call option."

Tell Your Fans Where To Buy Your Music by @annielin bit.ly/1vnQrdl

http://

Interested in music business news?  You should follow me on Twitter @Auditrix.

Interested in games or other IP rights?  You should follow me on Twitter @RoyaltyExpert.

Why You Need a Better YouTube Strategy

I was recently honored to speak with an elite group of L.A.'s best business managers about how YouTube drives a recording artist's recoupment of video accounts and earnings.

According to a recent Viacom study, 91% of 13-40 year olds "listen to the song/watch the video on YouTube prior to purchasing."

Yet, YouTube cannibalizes record sales and it and Vevo - through which UMG and SONY take an extra cut - pay controversially low royalty rates.

Thus, whether independent or major, your clients are best served by a very thoughtful YouTube business strategy.

Here are four points I consider when helping business managers develop a YouTube financial plan for music clients:

• Cost - Fund production costs with brand integration, engage in budgeting, document approvals, make sure clients aren't subsidizing production
• Collections - Consider re-records.  Also, metadata tells licensees who to pay, so you want to get it right (see this Metadata style guide for tips).
• Control - Don't let Vevo ads erode brand equity.
  
• Compliance - For crowdfunded videos, we provide tax planning and verification of accredited investors for a 506 offering.
• Claims - Potential audit findings include incorrect recoupment and/or cross-collateralization, incorrect costs, so-called "digital breakage," Vevo fees, publishing synch fees

Are you a business manager, attorney, personal manager or advisor?

Call me today at 424.248.8866 to influence these and other key factors of your clients' financial success.

Top 10 Items Last Week on LinkedIn and Twitter

• New Blog Post:
  #Screenplay Prices
  Q&A With Dinah Perez, Esq.
• .@theroyaltymkt:
  "Think of a royalty investment as a variable income stream with a long-term embedded call option."
• Schuyler Moore:
  If you do a 506 offering, you can advertise it.
  #crowdfunding @bhba
• #FF
  For #crowdfunding info from Schuyler Moore follow him at @schuylermmoore and buy his book on Amazon
• It's SoundCloud vs. the World in a War For Your Ears (and Wallets) | Thump
• RIAA mid-year report: music sales down 5% | The Music Network 
• "Never Give Your Work Away for Free" - Advice from a Freelance Composer - Shake
• GM, Ford Sued Over Music Royalties
• Sony/ATV Threatens the Nuclear Option Against Pandora... | Digital Music News
• Vivendi, Impala, & IFPI Send Open Letter to the European Commission | Digital Music News

Interested in music business news?  You should follow me on Twitter @Auditrix.

Interested in games or other IP rights?  You should follow me on Twitter @RoyaltyExpert.

Screenplay Prices: Q&A With Dinah Perez, Esq.

Entertainment lawyer Dinah Perez, Esq. wrote “The Legal 411 for Screenwriters,” section of the Hollywood Screenwriters Directory, available here.  In the Q&A below, Ms. Perez shares a bit of her vast expertise on the topic of screenplay purchase prices.  Many additional insights about screenplay rights and dealmaking can be found in her truly informative contributions to the Hollywood Screenwriters Directory.

Cedar Boschan: What is a standard purchase price for a screenplay?

Dinah Perez: There is no such thing as a "standard" purchase price for a screenplay. WGA members cannot accept less than the sum prescribed in the WGA Schedule of Minimums, but can exceed the minimum, and non-WGA members can sell their screenplays for any price they are able to negotiate. Sale prices typically range between 1% and 3% of the cash production budget of the picture.

Boschan: What factors do producers consider when making an offer?

Perez: Producers consider the screenwriter's track record; whether there is a bidding war for your screenplay; whether the screenplay is based on a best-selling novel; whether it is about a salacious, interesting or well publicized person or event; the screenplay's genre; and, if known ahead of time, the picture's potential production budget.

Boschan: Can you share any negotiation tips to get the best price?

Perez: If the production budget is not known going into the negotiations, I suggest a purchase price based on a sliding scale, e.g., "for a picture not to exceed $15,000,000 dollars, the purchase price shall be 2 ½% of the cash budget of the picture, but in no event less than WGA low budget minimum and no more than $250,000. The purchase price will be increased by $10,000 for every $1 million increase in the picture's production above $15,000,000 not to exceed a total purchase price equal to $500,000." The attorney attempts to secure the highest ceiling possible while the producer tries to limit it.

Boschan: Technically, what is an “Option?”

Perez: You acquire the rights to a literary work by entering into an “Option/Purchase Agreement” whereby you have the exclusive option to buy said literary work for a determined period of time.  The Option/Purchase Agreement has two components: the Option Agreement (“Option”) itself states how much time you have to buy the literary work, and the purchase agreement includes the sale price and rights to be granted. You purchase the literary work by exercising the Option and paying the purchase price prior to the Option’s expiration date.  You do not actually purchase the literary work until the commencement of principal photography – when you know that the picture is being produced.

###

DINAH PEREZ graduated Loyola Law School and has been in the practice of entertainment law since 1996.  She practices film, television, theater, music, new media, publishing, copyright, and trademark law. She enjoys practicing entertainment law because she has great respect for the arts and those who create, and relishes helping her clients attain their professional goals.  

Ms. Perez has been published in Story Board Magazine, Release Print, Script Magazine, “The Screenwriters Guide to Agents and Managers,” and “The Hollywood Screenwriting Directory”, and “Hollywood Screenwriters Directory” (2014).  She recently entered into a publishing agreement to co-write the “Hollywood Producers Directory” (2015). Ms. Perez has been quoted in Entertainment Weekly, Wired Magazine, Wired.Com, and featured in “Alone In  A Room.”  

Ms. Perez has participated in panels and/or spoken at the Black Hollywood Film Festival, the Latin Heat Film Festival, Women in Film, Cinewomen, Independent Feature Project West, American Film Market, the Inktip Pitch Summit, the Screenwriters World Conference, the Writers Store, and the Showbiz Store and Cafe.

She is a member of the Beverly Hills Bar Association (Entertainment Law Section, Executive Committee), the California State Bar, Film Independent, and NARIP (National Association of Record Industry Professionals). She was a founding board member of Cinewomen in Los Angeles, CA. 

Top items shared last week on LinkedIn and Twitter

Top items shared last week on LinkedIn and Twitter:


"the music industry generated $15 billion ... in 2013. Of that, 39% came from rapidly growing digital channels" 

• South Korea increases rate for online music streaming and downloads | Koreaboo
• Nigeria: COSON set for showdown with Abuja pubs over non-payment of music royalties
• Auditrix: Top Posts Last Week #ICYMI

Video: David Israelite on the Future of Music Publishing AIMP.org 

• "...churn tends to be high: around 46% of users of subscription services have either switched or say they plan to..."
• "the music industry generated $15 billion ... in 2013. Of that, 39% came from rapidly growing digital channels" 
• BBC News - VKontakte case puts Russian music piracy into spotlight 

JOB: WMG is hiring an analyst in its audit group in Burbank.  I will locate details if you are interested in being audited by my team - ha!

• WWE Potentially Reacting to CM Punk 22 Page Royalty Letter
• Rdio redesigns its service to emphasize radio and recommendations | The Verge
• Officer who struck Milt Olin won't be charged

"The best way to complain is to make things." - James Murphy

• Auditrix: Top Tweets from the California Copyright Conference's #Streaming for Dollars Panel 
• "What is the Talent Agencies Act?" 
• Sept. 29th deadline approaching for startup submissions to Rethink Music Berlin! 

Interested in music business news?  You should follow me on Twitter @Auditrix.

Interested in games or other IP rights?  You should follow me on Twitter @RoyaltyExpert.

Top Posts Last Week #ICYMI

Top items shared last week on LinkedIn and Twitter:

Q&A with
Edwin F. McPherson, Esq.

• How does the #Talent #Agencies #Act impact music producers and mixers, and their reps?  Q&A w/ Ed McPherson, Esq. via @Auditrix
• "The last small music publisher left in the Brill Building" via @NewYorker
• Is Another Tech Bubble Forming Around Music Streaming? via @billboardbiz
• Dear College Students, Meet Green Hasson Janks!  @GHJ_Careers
• The music industry: Beliebing in streaming | The Economist via @MusicRoyaltyPro
• Ever heard of Your Music crowdfunding record label?  Check @omarshamout's article (featuring my $0.02) @LABJcommunity
• Susan Kaye Quinn, Speculative Fiction Author: Getting Your Best Royalty On A 99cent Title via @RoyaltyExpert

Tracy Liang, CPA
@RoyatyTracy

• Our team including the #great Jenny Paredes and Tracy Liang @RoyaltyTracy got out a fine damages valuation today!  #gratitude  #litigationdeadline

Interested in music financial news?  You should follow me on Twitter @Auditrix.