Jazz Industry & Music Business Committee Examines The U.S. Copyright Office Study on Music Licensing  Part 1

By Cheryl Slay Carr

Last month the U.S. Copyright Office released its much anticipated study on music licensing. The study represents the culmination of written public comments, congressional analysis, and public roundtables held in Nashville, (at Belmont University College of Entertainment & Music Business), Los Angeles (at UCLA School of Law) and New York (at NYU School of Law) with a list of participants that reads like a who’s who of the U.S. music industry. Subsequent to a sweeping solicitation of insights from sectors of interest representing the music, legal, academic, consumer, technology and business communities the Copyright Office has synthesized its findings into a 245-page report (titled “Copyright and the Music Marketplace”) containing extensive recommendations for modifications to copyright law that would introduce significant changes to existing music licensing and business operations, if adopted. Though there is no way to know whether Congress will choose to enact the recommendations, the issuance of the report signals a readiness on the part of affected constituencies to reach a consensus on the need to update copyright law to make it more responsive to the unique business environment of the music industry.

This article is the first in a series examining the report in order to provide JEN members with an overview of its findings. JEN will also delve into the study and other music business topics during the 2016 JEN Jazz Industry & Music Business Symposium at the upcoming Annual Conference to be held in Louisville, KY. The Symposium will offer a forum dedicated to an array of business sessions, workshops and clinics on Wednesday, January 6, 2016. Some of the business track sessions from 2015 included: “The Art of the In-Home Concert,” which described a business model for expanding venue performance opportunities, “How to Sell Out Without Selling Out,” examined the juxtaposition of art and business, “Copyright Law 101 and The Business of Jazz,” featured a primer on copyright law, and “Modern Marketing and Branding Basics for Jazz Artists.” By centralizing all business track sessions during next year’s conference, the 2016 Symposium will give JEN members the opportunity to focus on these important issues, including developments from the Copyright Office report.

In this first article I pose and answer some preliminary questions, in Q&A format, about the report and its importance. The rest of the series will more specifically highlight key sections of the report.

Q. If I don’t understand the details of copyright law, how can I appreciate the Copyright Office study on music licensing? 

A. Simply stated, copyright law involves ownership rights for creative products like art and music and establishes the rules by which such products (“works”) can be lawfully used. In this respect, the overall concept of property ownership and monetizing one’s property is not complex. However, one of the report’s major findings is that copyright law should be simpler to understand and should facilitate straightforward mechanisms for transacting the business of music.

Q. If you had to summarize the report’s main findings and overarching principles, what would they be?

A. Quoting directly from the study’s executive summary:
“The Copyright Office’s study revealed broad consensus among study participants on four key principles:

  • Music creators should be fairly compensated for their contributions.
  • The licensing process should be more efficient.
  • Market participants should have access to authoritative data to identify and license sound recordings and musical works.
  • Usage and payment information should be transparent and accessible to rights owners.”

Q. It seems to many in the music community that properly compensating artists and composers (and labels and publishers) has always been important. Why does this study seek to focus attention on music and copyright law now?

A. In 2013 Congress began examining copyright law to ascertain whether it was in step with the changes ushered in by digital technology. In addition to overseeing the process for copyright registration, the role of the Copyright Office is to advise Congress on anticipated changes in U.S. copyright law, to analyze and assist in drafting copyright legislation, and to conduct studies for Congress on copyright matters, among other things. As a result, the Office initiated this study. Though many art forms are affected by copyright law, the music industry was a focal point; out of 17 congressional hearings held on copyright law reform, 2 of them were dedicated to music.

Q. Why should I be interested in the report?

A. If you are involved in the music industry in any way you are actually the subject of the study. In large part, the study focuses on music licensing. Licensing involves the granting of permission by copyright owners for uses of their creative works in exchange for compensation, usually royalties. The current licensing scheme for copyright law consists of a myriad of payment agents like the Harry Fox Agency, BMI, ASCAP, SoundExchange, record labels, publishers, and indie agents. On the licensee side the participants, like iTunes, Spotify, Sirius XM, radio stations, and you and me, are even more numerous. It is valuable to understand how these numerous entities interact with each other to create business transactions under current law and to have a view of how the Copyright Office and the many commenters who provided them with input would like a new payment system to look.

Q. Now that the study has been completed, when will the recommendations go into effect?

A. The study represents a state of readiness within the music community to see change, and represents a willingness on the part of the Copyright Office to provide constituents with information to use in influencing Congress. However, only Congress can change the law, and that’s not always quick or easy. Some are optimistic that even if not all of the recommendations are adopted, Congress has been given a comprehensive view of the changes that are needed and that perhaps some reform will be forthcoming. But that remains to be seen and may take years to effect. In the meantime, it is possible that the dialogue generated may spur private (non-legislative) initiatives that would be practical and quicker to implement.

Q. Why is JEN sharing this information? 

A. This is what your membership in JEN is all about. This kind of educational effort is part of JEN’s mission, and is specifically the mission of the JEN Jazz Industry and Music Business Committee.

Click here to read part 2 in the series. 

Cheryl Slay Carr is Associate Professor of Music Business at Belmont University, attorney and author of Music Copyright Law, and a jazz vocalist. You may reach her at [email protected].