Music Law Newsletter - NEW TECHNOLOGY AND LICENSING YOUR MUSIC  
11th January 2007

Introduction
The internet and other recent advances in technology, particularly mobile phones, have opened many new avenues for musicians to make money off their songs. Most musicians are familiar with the idea of selling physical copies of their music via websites or even selling MP3 downloads.

Still the potential of the internet and other emerging technologies to provide avenues for musicians to earn money from their songs is really in its infancy. As new and exciting opportunities present themselves, the concept of the licensing of songs will become increasingly important. 
   
Licensing vs. Assignment 
What exactly is meant when people talk about ‘licensing songs’? On a basic level licensing songs in the legal sense means granting someone else rights to do certain things in respect of your songs. Although some people use the terms ‘licensing’ and ‘assignment’ interchangeably they are, in practice, two very different concepts. Assignment is effectively the transfer of ownership. In simple terms licensing is equivalent to when you lend your car to a friend, granting them to use it for a certain period of time on certain conditions. An assignment is more like the situation where you sell the car to your friend. 
   
The Future? 
So why the big fuss over licensing? Why not just focus on selling your songs outright? Plenty of reasons, many related to technology changes.  Imagine if you entered into an arrangement a decade ago with a publisher, or a record company, under which you gave them the ability to exploit all rights in your songs forever. Consider how much has happened over the last 10 years in the way music is used and traded. For instance Napster and the real emergence of MP3's as a music format, true broadband internet, ringtones, iTunes and mobile phone music and video downloads. In practice the hypothetical record company or publisher you gave those rights to 10 years ago would hopefully be trying to exploit your music through all of these new mediums on your behalf. However, your original agreement with them, in terms of what you were paid, would most likely not have reflected the potential income from these new means of exploitation. Nor may it have included the appropriate mechanisms for sorting out what percentage of the income you would be entitled to from these new mediums. 
   
Def Jam Mobile 
A good example of the new frontier of song licensing is represented by Def Jam Mobile. Def Jam Mobile, which launched in the UK at the end of last year, has been operating in America since 2004. It specialises in providing content to mobile phone companies. Def Jam Mobile licenses a large proportion of its content direct from musicians. Companies like Def Jam Mobile operate on the basis that these days certain content may be highly in demand, but only for a very short period of time, perhaps as short as five weeks for a specific song or remix. This is often a much shorter period of time than a record company operating in the traditional manner could produce and distribute such content in. Companies like Def Jam Mobile have speed to market as a goal, meaning that a song could be played live for the first time at a gig on a Saturday night and that version of the song could be available via mobile phone services on the Monday. 
   
Opting Out 
There are also now a growing number of companies to which you can provide your music over the internet – on a non-exclusive basis – who will work to have your songs included in films and TV throughout the world.  In New Zealand APRA now provides for member songwriters to retain certain rights in respect of the songs APRA is authorised to administer. Under the Opt Out provisions it is possible for songwriters to retain control over the licensing of performances of their songs in any medium, including in the online or even the mobile phone environment. The ability to licence certain rights in respect of your music directly may mean you can obtain a better return than if APRA was to licence the use of your song on your behalf at standard industry rates. 
   
Good Product 
Despite the ever increasing opportunities for the licensing of music, you still need to have songs that people want. The new licensing opportunities don’t mean it is easy for everyone to make money out of their songs. They do however provide an ever increasing range of options for musicians, bands, DJs and producers who have a profile and a following, or are prepared to work to build that following. 
   
Who Owns What? 
Although the licensing of songs has great potential there are many issues you first need to consider. For instance, who actually owns your music? Have you already assigned all of the rights in your music to a publisher, record label or someone else? If not, do you own all the rights in the music yourself or are there other band members who helped write the song, or maybe someone else who you worked on the song with? To do any kind of licensing or assignment you will need the consent of any such co-writers.
 
You also need to consider who owns the actual recorded version of the song as it appears on your CD or master? Is it you or does your record company, or someone else who financed the making of the CD for you, own this version? You will need the others’ permission if you are seeking to provide a licence of not just your song but the actual physical recording of the song. This whole area can be extremely complicated! 
   
Conclusion 
In any licensing situation, you must make sure you are specific over exactly what you are licensing, to whom, for how long and what you will be paid. If you look at assigning rights to carry out such licensing to a third party, such as a publisher or a record company, you should also consider if what you are being paid reflects the potential value that can be exploited from your songs. Also importantly, can this other party actually earn you income from the licensing of your songs that you couldn’t arrange yourself? 
   
Next issue... 
In our next Music Law Newsletter, due out in February, we will start to look at some of basic principles of 'Copyright', which is probably the single most important legal concept in the music industry. 
   
Questions? 
In the mean time if you have any queries or questions in respect of the above please don’t hesitate to contact me at david@mclaughlinlaw.co.nz or on 021 630 201 or 09 363 2738. 
  
Pass it on 
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Disclaimer: This article is intended to provide a general outline of the law on the subject matter. Further professional advice should be sought before any action is taken in relation to the matters described in the article.  This article written by David McLaughlin of McLaughlin Law recently appeared in New Zealand Musician Magazine and has been reproduced with the kind permission of New Zealand Musician Magazine.

* * *   IMPORTANT UPCOMING APRA DATES* * *    

2007 DUE DATES
28 February: Professional Development Award applications due
28 February: Ambient Music Reporting Forms
28 February: Music On Hold Reporting Forms

UPCOMING APRA MEMBER EVENTS
31st January: Members Seminar – Vita Pacific Arts Festival - Christchurch
February: APRA @ Te Matatini Festival – Palmerston North

www.mclaughlinlaw.co.nz