Monday, September 21, 2015

Live Music: Is Growth of the Industry's Largest Source of Revenue Sustainable?

Live music is the largest of the music industry's three major revenue streams, representing over 40%:



Accordingly, nearly half of the money that the average U.S. consumer spends on music is for live music experiences.



Over the past few years, the live concert industry has had a good run, globally as well as in the US, as shown in the chart below:



Pollstar reported that North American concert revenues totaled $6.2 billion in 2014 and 2015 may be another record-setting year for live music events, in terms of revenues, attendance and high ticket prices.  Many credit such growth in live music to maturing audiences, as evidenced by trade publication Pollstar’s list of top five concert tours worldwide during the first half of 2015, which includes just one act with fewer than two decades of history (i.e., One Direction):
  1. One Direction
  2. Fleetwood Mac
  3. The Rolling Stones
  4. Garth Brooks
  5. Paul McCartney

There is clearly a risk that the live concert industry (and industries that depend on it, such as pro-audio equipment), will suffer sharp declines as top-grossing entertainers and their audiences age out of the marketplace.

However, it is worth noting that the above list of top five concert tours during the first half of 2015 does not reflect the latest Taylor Swift tour.  Also, it does not reflect non-tour related events such as festivals and electronic dance music events, all of which attract a younger demographic of consumers with lower discretionary income than the typical Fleetwood Mac or Paul McCartney concertgoer, but who are likely to continue to attend music events for decades to come.

Regardless, some analysts believe that, as the over-saturated market for festivals contracts, live music revenues may decline.  Also, while electronic dance music has been a bright spot, notable EDM promoter SFX has struggled financially. 

The bottom line is that few experts think the record growth in live music is sustainable in the long term.

Monday, August 24, 2015

LA Calendar: October 17, 2015

The University of Southern California's Gould School of Law and The Beverly Hills Bar Association will present the 2015 Institute on Entertainment Law and Business on Saturday, October 17.

Mailer from USC's 2015 Institute on Entertainment Law and Business

Our founder Cedar Boschan will speak during the afternoon at The Institute about the search for revenue stability in the evolving music market.  Ms. Boschan earned her bachelor of science in music industry from USC's Thornton Music School in 1999, where her instructors included fellow panelist, attorney and author Todd Brabec, as shown in the Institute's new mailer, pictured below:

USC 2015 Institute on Entertainment Law and Business Music Industry Speakers Include: Cedar Boschan, Todd Brabec, Esq., Kent Liu, Esq., and Tess Taylor

Attorneys who attend the Institute may receive 6.25 hours of MCLE credit, including 1 hour of legal ethics credit.  CPAs may receive up to 5.5 hours of CPE credit.

Registration is now open - click here to register!

Saturday, June 20, 2015

#Apple

Top Three: E3 Edition

Below are the Top 3 #E3 items shared in our @RoyaltyExpert Twitter feed:

Cedar Boschan and Evan Van Zelfden @gamelawpro at the Video Game Bar Association #VGBA #E3 cocktail reception sponsored by @LathamWatkins

We extend an invitation for those of you visiting the next E3 event in Los Angeles:






Tuesday, May 26, 2015

Los Angeles Calendar: June 25, 2015 Music Publishing Valuation Panel


The Association of Independent Music Publishers will present music valuation panel discussion on June 25 at Lawry's in Beverly Hills, California.
Registration is now open - click here to register!


AIMP Catalog Valuation Panel:  Beyond the MultipleThursday, June 25 at 11:30 amLawry's Restaurant in Beverly Hills, CaliforniaTickets & Information: Click Here
Join the AIMP for lunch as speakers delve beyond the multiple to reveal how parties from buyers to banks price music assets.  Music valuation expert and AIMP Treasurer Cedar Boschan will moderate this highly informative discussion among world class valuation experts, so mark your calendars for June 25.
Speakers:


Jason Somerville, Managing Partner, EIG




Josh Gruss, CEO, Round Hill Music

Dan Coleman, Managing Partner, Modern Works Music Publishing



Derek Crownover, Esq.Partner & Entertainment Law Practice Leader, Dickinson Wright 


Cedar Boschan, Founder, Boschan Corp

Friday, May 8, 2015

Maximize Future Marital Settlement Agreement (MSA) Royalty Earnings with these Drafting Tips from Cheryl Hodgson, Esq.

Trademark, copyright, music law & digital media attorney Cheryl Hodgson of Hodgson Legal
The best family law attorneys know when to include outside experts on their team.  When it comes to intellectual property assets, family lawyers turn to attorney Cheryl Hodgson of Hodgson Legal for her expert advice.

As part of our collaboration geared towards helping family lawyers and their clients navigate the arcane world of intellectual property assets, we invited Ms. Hodgson to share three key drafting tips for family lawyers to consider in cases when the marital assets include royalties:

1.     Audit rights.  Audit rights are a vital component to any agreement that includes payment of royalties, whether or not a dissolution is involved. Without the direct audit rights as well as the right to participate in an audit of the source of the income stream, there is no means by which to verify the accuracy of accountings from an ex-spouse, or payments received by the ex-spouse. Moreover, without an audit to identify an ex-spouse’s non-compliance with the marital settlement agreement (“MSA”), it can be difficult or impossible to identify evidence to support legal action and hold the ex-spouse accountable for failing to properly pay. Therefore, one should always include a thoughtful audit clause in the MSA that grants access to the contracts that create the income stream. Moreover, rights to piggyback on direct audit rights are imperative.  (See this post for more audit clause drafting tips.)
2.     Earnings Periods.  The MSA should address dates governing receipts and payments prior to the date of dissolution since payments may be earned long before they are received. For example, in the case of foreign performance royalties from the broadcast of music on television and in film, earnings during the term of the marriage may not be received or paid in the United States for a year or even longer.
3.     Transfers of Title.   A court order detailing rights in the divided assets should be drafted in a manner that is both clear, detailed, and binding upon third party payees of royalties. Entertainment related companies are often loathe to make changes in existing payment instructions without clear agreements, letters of directions, and in many cases, a court order that clearly identifies the assets and the parties covered.

# # # 

Don’t wait for the next post in our ongoing collaboration – read more from Ms. Hodgson today on her own website.  Better yet, for a personalized consultation, call Ms. Hodgson today at 310-623-3515 and follow her on Twitter @CherylHodgson.

Monday, April 13, 2015

Mark Your Calendar: Cinco de Mayo

The Recording Academy and California Lawyers for the Arts will present a music industry panel discussion May 5 at The GRAMMY Museum in Downtown, Los Angeles:


The Legal Landscape for Compensating Content CreatorsTuesday, May 5 at 6:00 pmThe GRAMMY Museum in Los Angeles, CaliforniaTickets & Information: Click Here
The below experts will discuss why music revenue and royalties are at all time lows, the history of music distribution, how content creators (and artists) are paid, the applicable laws and legislation, and the present and future landscape for creating and selling music.
Panelists:

  • Jay Cooper, Esq., Greenberg Traurig LLP
  • Dina LaPolt, Esq., LaPolt Law PC
  • Cedar Boschan, Boschan Corp. & Auditrix, Inc.
  • Edwin McPherson, Esq., McPherson Rane LLP
Moderator:
  • Keith Cooper, Esq., de la Peña & Holiday LLP
The GRAMMY Museum will be open at 6:00 p.m. for attendees to view the exhibitions. The program runs from 7:00 p.m. to 8:30 p.m.

The museum entrance is on Figueroa, between The Farm of Beverly Hills and Flemings.

Paid parking is available in nearby public lots.

Click here for more details.

Sunday, April 5, 2015

2015 Quarter 1 Top 10 @RoyaltyExpert


Below are the items that had the highest engagement during the first quarter of 2015 on our RoyaltyExpert Twitter feed:
  1. February's digital console sales drop 3.7%  http://t.co/Th9E0U85z4
  2. Spotify launches today on PS4 and PS3 with PlayStation Music  http://t.co/YxoKVXG9v1
  3. Allocation of Copyright Damages for Co-Owners - In re Isbell Records, Inc. | McDermott Will & Emery - JDSupra  http://t.co/a3HNW0EHR0
  4. Boeing Patents Force Field Technology  http://t.co/xsPcM8gRc6
  5. Machinima gets another $24 million in funding from Warner Bros.  http://t.co/1mQxC93Tto
  6. GameMaker Studio creator acquired for $16.4 million  http://t.co/emDdnZmLkm
  7. Why Being Under-Funded Could Actually Help Your Business  http://t.co/GquGaEsvl5
  8. 20 Percent Of Mobile Gamers Are Mobile-Only | alistdaily http://t.co/sbbpOwxKpT
  9. 15 Stephen Hawking Quotes That Will Change Your Life  http://t.co/xRKZe1iy10
  10. Physical Game Sales Hit 24-Year Low in Japan  http://t.co/scVOe0UWkS


Saturday, March 28, 2015

Introducing Boschan Corp.

Dear readers,

It is my great pleasure to announce that audit and forensic expert services successfully launched this week at Boschan Corp., the sister company of Auditrix, Inc.

Boschan Corp. is dedicated to empowering attorneys to optimize client claims / counterclaims through:

  • Contract and royalty audits
  • Damages, property and restitution valuation

Personally speaking, I am thrilled to return to an entrepreneurial role focused on music, IP, interactive and other select clientele, not to mention a commute that saves hundreds of hours!

Please update your contact records as follows:

Cedar Boschan
President & CEO

Boschan Corp. & Auditrix, Inc.
8383 Wilshire Blvd.
Suite 800
Beverly Hills, CA 90211

Web: Boschan.com
Tel: 424-248-8866
E-m: clientservice@boschan.com

I hope to hear from and see you soon!

Have a wonderful week ahead,
Cedar

March 2015 Music Business Top Ten


Here are the top ten music industry highlights from our Auditrix twitter feed:
  1. Cheryl Hodgson moderated a fantastic panel discussion about brands and music at the California Copyright Conference:
    Pictured L-R: Navine Karim - Legal Counsel, Red Bull Media House; Kyle Hermans - Brand Innovation, Gap Brands; Cheryl Hodgson - Music Attorney and Founder of Brandaide; Marshall Eskowitz - Marketing Executive, Creative Artist Agency
  2. By David Oxenford, who represents #broadcasters: Songwriter' Equity Act Reintroduced - What Does It Propose?
  3. Hollywood Reporter: We nominated our favorite power lawyers! 
  4. Daily Mail Online: Jay-Z to pay Swiss jazz musician 50% of royalties after 'stealing' his instrumental for 'Versus'
  5. Fast Company: Spotify Unveils A Bold New Brand Identity
  6. New York Post: Spotify to spend $1B on renewal deal with Universal Music

  7. Billboard: 'Blurred Lines' Trial Verdict: Jury Rules Against Pharrell Williams & Robin Thicke
  8. Disruptive Competition Project: Transparency at the Intersection of Music Licensing and Antitrust
  9. Sonicbids: 5 Not-So-Obvious Revenue Streams for Musicians
  10. Digital Music News: 12 Reasons to Fire Your Bandmates

Sunday, February 22, 2015

February Financial News Recap - Music Royalties

MIDEM as we know it may be no more, but the music business always kicks off the new year with The Grammy Awards.  This year, we celebrated nominated clients during #Grammy #Week with many out of town guests from New York, The Southeastern US and Texas (see photo here by Christianne Kinney, Esq. featuring Tamera Bennett, Esq., Ken Freundlich, Esq. and Auditrix founder Cedar Boschan at the Fox Rothschild Pre-Grammy Party)

Our music royalties highlights so far this year:
  • A popular post on the Auditix blog "Five Things to Consider Before Filing a Music Copyright Case" by trial lawyer Gerard P. Fox, Esq.
  • Cedar Boschan was re-elected to a second term as national treasurer of The Association of Independent Music Publishers.  She was also honored to be featured in discussion with the following music industry professionals in Berkeley at California Lawyers for the Arts' "Crossing the Digital Divide" 32nd Annual Music Business Seminar:
    • Keith L. Cooper, Esq., Partner who heads de la Pena & Holiday LLP's new Los Angeles office and focuses on clients in  transactional, copyright and trademark matters, as well as lawsuits
    • Angela Rose White, Esq., COO of David Rose Publishing Co. where she concentrates on music publishing/administration of a catalog including “The Stripper” 
    • Mikael "Count" Eldridge, San Francisco-based record producer and filmmaker (projects include DJ Shadow, Frank Sinatra, Radiohead, John Cale, No Doubt, RUN DMC)
    • Vivek Sridharan, Esq., Partner at Counsel LLP who advises on digital strategy for independent record labels, music technology start-ups

      The panel discussion focused on digital distribution of music and its impact on the music business.
  • Green Hasson Janks published its final Entertainment Newsletter (GHJ is switching to a blog, to be announced soon)
  • Cedar and her team at GHJ attended several educational programs about the music industry, including an International Panel at the AIMP and the first music-oriented program held by The Beverly Hills Bar Association in quite a while:
February 18, 2015 at The Beverly Hills Bar AssociationMusic Industry Update: Getting a Manager, a Record Deal, and the Money in 2015
L-R: Dean Wilson, 
President, Three Six Zero Group, Dina LaPolt, Attorney, LaPolt Law PC, Donald Passman, Partner, Gang Tyre Ramer & Brown, Rand Levin, Senior Vice President, Business & Legal Affairs, Universal Music Group, Dinah Perez, Law Office of Dinah Perez
  • We also attended The AIMP's International Royalties program featuring:
    • Michel Allain, Director General/CEO, FastTrack (Paris, France), who cogently pointed out that, unfortunately, $1M Euros equals $1M U.S. Dollars
    • Ger Hatton, Director General/CEO, International Confederation of Music Publishers (Switzerland)
    • Teri Nelson Carpenter, President & CEO, Reel Muzik Werks/AIMP Vice President
  • Check out our top tweets here!

Top Tweets YTD from the Auditrix 2015 Twitter Feed

Below are the popular tweets from the Auditrix twitter feed, which focuses on music economics and royalties, during 2015 YTD:

Best Unfinished Twitter Conversation with Glenn Peoples @ Billboard and John Strohm @ Loeb

Friday, January 9, 2015

Five Things to Consider Before Filing a Music Copyright Case

By Gerard P. Fox, Esq.

Gerard P. Fox, Esq. and his firm
handle general business, contract
and IP litigation across the
entertainment industry and
beyond.

Attorney Gerard P. Fox has acted as lead trial counsel for corporate clients such as Vivendi and Clear Channel. Mr. Fox has also represented high profile entertainers including Madonna, Anita Baker and the Isley Brothers.  

From hiring experts to damage awards, in his post below, Mr. Fox shares some very useful tips from his years of copyright litigation experience.  For a personalized consultation, contact the Law Offices of Gerard Fox and also check out his Fox's Litigation Strategies Blog.

1.      In my opinion the Federal District Courts have been improperly applying a quantitative and not qualitative copyright analysis in music and film cases. This means that they take the totality of your copyrighted work which you claim has been infringed, and hold it up against the totality of the infringing work and actively look for dissimilarities.  This is incorrect under the law because in truth a song often includes many small, integrated and unique copyrightable works. Unfortunately, because the courts are taking this approach, it is much harder to win a copyright case in district court.  I tried one of the last published wins where I represented an artist claiming a part of their song was infringed. See Three Boys Music (Ronald Isley) v. Michael Bolton.  It’s not common.
2.     You will need to hire a musicologist up front.  If you want to have any chance of negotiating an early settlement or defeating an early motion for summary judgment (see below), you will need to retain an accomplished and respected musicologist. First, you should secure their independent opinion as a consultant, then if their opinion is one you respect and one that supports your contentions you should retain them as a formal expert.  Good musicologists, who are respected by defense counsel and the court, will usually ask for an up front retainer of no less than $5,000 or $10,000. Keep in mind that this retainer is not a cap of their total billings.  If the case proceeds through to depositions, summary judgment and trial, the musicologist would likely charge you upwards of $25,000. 
3.     Another consideration is that the defendants will most assuredly make an early motion for summary judgment wherein they will argue that the infringed elements of your song are common and not unique, and that the two musical works are not substantially similar.  They may make other arguments that are common to these type cases, but these are the two most likely arguments.  In making these arguments, they will put forth cases that move away from the proper application of Copyright law to a quantitative analysis of the works.  It is imperative that you retain attorneys who have a deep and up to date understanding of the case law, legislative history and this process to have any chance of defeating this type of motion.  This is no area for a general practitioner.  Defeating this summary judgment motion is essential, because if you do, which is rare in these cases, you will have all the leverage, as the defendants would be left to face a public jury trial.
4.     The prevailing party may be awarded their attorney’s fees under Copyright law.  Under 17 U.S.C. § 505 “the court may also award reasonable attorney’s fees to the prevailing party” in a copyright infringement case.  This is a huge issue to consider if you are the artist because if you lose, you could be ordered to pay hundreds of thousands of dollars of defense fees.  Now, awarding attorney’s fees and costs is discretionary with the district court judge, and many of these judges will NOT award the defendants their fees even if they win, on account of their very human concern about the financial devastation such an award would cause the artist, but this is a risk.
5.     Finally, when it comes to estimating your damages, you will not be awarded all of the infringing defendants’ net profits from the infringing distribution and use of the song, but an apportioned amount.  17 U.S.C. § 504(b) provides that the defendants are entitled to prove that certain elements of the profits are “attributable to factors other than the copyrighted work.” See Mackie v. Rieser, 296 F.3d 909, 915–16 (9th Cir.2002) (In the Ninth Circuit, on a claim to recover profits that are attributable to the copyright infringement, a plaintiff must show that the infringement itself, that is, the use of the plaintiff's work, was causally linked to the gross revenue claimed.).  This means that the defendants will argue that their notoriety, other songs on an album, the marketing behind them and their songs, the market that pre-exited for their music and other non-infringing parts of the song at issue were responsible for most of the profits earned, and that you should only be awarded a small apportioned amount of the net profits.  Of course, most defendants are not truthful about their actual net profits and will try to hide the true amount of their profits. To combat this it is important that you hire a forensic accountant who is knowledgeable about the music industry, such as Green Hasson Janks, to figure out the actual net profits, and then use your musicologist and maybe another music industry expert to argue that the piece of music stolen from you drove the sales and as a result defendants’ profits.
# # #

Gerard ("Gerry") Fox graduated from Georgetown Law School, magna cum laude, and earned an accounting degree from the University of Richmond. Mr. Fox acted as lead trial counsel for clients such as Vivendi, Clear Channel and Dow Chemical.

Gerry started his career at Covington & Burling, followed by Kaye, Scholer, before forming Fox & Spillane, where Mr. Fox honed his trial skills for twelve years. Four years ago, Gerry began the Law Offices of Gerard Fox.

Gerry handles General Business Litigation, Contract Litigation and Intellectual Property Litigation across the entertainment industry and beyond.

Gerry is admitted to practice in Maryland, Washington, D.C., California, has served as a media commentator, and wrote the book “Sue the Bastards.”