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PUBLISHING & COPYRIGHT CHEAT SHEET 100% Licensing vs. Fractional Licensing -- 100% licensing allows any one co-owner of a work to license 100% of the work without needing the permission of the other co-owners. This means that your writing partner could have 100% control over the licensing of your song, without your say, subject only to an obligation to account to you for your share of licensing revenues. Fractional licensing, on the other hand, allows the owners of a song to license only their specific share. This has been the model under which the PROs have operated since the consent decrees, and it is preferred by the PROs, writers, and publishers. Why? Let’s say you are a BMI writer and ASCAP licenses your ASCAP-affiliated partner’s share of the song: • ASCAP could license your co-written works at ASCAP’s own rate, not BMI’s. • ASCAP could reduce your payment by its own overhead rate even before it enters BMI’s distribution system. • You could be subject to ASCAP’s distribution methodology, not BMI’s. • Your distributions could be delayed by this process. The DOJ (Department of Justice) declared that 100% licensing was required under the Consent Decrees. BMI challenged this and won -- so fractional licensing remains. Compulsory License -• When the copyright owner of a song allows that song to be recorded onto a phonorecord and distributed to the general public for private use, then anyone else can also make a phonorecord of that same song and distribute it to the general public for private, without asking permission of the original copyright owner. As long as, however, the

new user notifies the original copyright owner of the intent to record and distribute the phonorecord, and he or she pays the statutory mechanical royalty to such owner. This is called a “Notice of Intent,” or “NOI.” • The Compulsory License does not apply -- i.e., cannot be invoked -for derivative works. They require permission! • The Compulsory License is also an exception to the requirement that a user must obtain permission from the copyright owner. Consent Decree -- Consent decrees are limitations agreed upon by parties in response to regulatory concern over potential or actual market abuses. The ASCAP AND BMI decrees are consent decrees that, to this day, govern how radio, whether AM/FM or digital, licenses compositions. BMI was placed under a similar set of conditions in the same year. ASCAP’s consent decree was last updated in 2001; BMI’s in 1994. • Intended to promote competition in the marketplace for musical works, the consent decrees encourage ASCAP and BMI to compete with one another to attract licensees and recruit new songwriter/publisher members. • Under the consent decree provisions, ASCAP and BMI must offer licenses to services and venues on equivalent terms, although these licenses are non-exclusive and members of the PROs retain the right to individually license their works. (For example, a radio station can pay for an ASCAP blanket license and play any composition in the ASCAP repertoire. Such licenses are available to AM/FM and television broadcasters, physical venues, and digital “radio” services like Pandora and SiriusXM. But if a songwriter/publisher wishes to negotiate a license for individual works outside of the blanket license and independently of their PRO, they are able to do so.) • If parties fail to come to agreement, licensees can petition the court. A federal judge in the Southern District Court of New York handles disputes and sets rates for a set term. • The consent decrees prohibit publishers from partially withdrawing just portions of their rights—such as those for digital transmission—from ASCAP and BMI. This means that the PROs administer all public performance rights for a given composition (including performance in AM/FM and TV broadcasting, digital broadcasting, and physical venues), or none of them. Major publishers sought to add partial withdrawal to the consent decree, but DOJ declined to recommend the change. Copyright Protection -- Extends to original works of authorship fixed in a tangible medium of expression.

Cue Sheet -- A document containing a detailed listing of all the music used within a television show, feature film, documentary or other audiovisual production. In the case of TV shows, cue sheets are collected by PROs and are essential in determining how much the writers and publishers for the music are entitled to. Derivative Work -- A work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment,

condensation, or any other form in which a work may be recast, transformed, or adapted. Digital Millennium Copyright Act of 1998 (DMCA) -- An amendment to the Copyright Law whose main purpose was to prevent online pirating and grant protection to parties placing copyrighted works online -- making it illegal to circumvent a technological measure to access a copyrighted work, and then making it a violation to traffic in devices whose purpose is to circumvent the technological measure to either access the work or otherwise infringe the copyright. For music and other performing arts, the most relevant portions of the DMCA involve Take Down notices and the Safe Harbor provisions. • Take Down: If a copyright owner finds her infringing material online -- say, a YouTube video containing the unauthorized use of the copyright owner’s song -- the DMCA gives that owner the right to demand that YouTube take down the infringing work (yes, it’s that simple). • Safe Harbor -- However, in the example above, YouTube may be shielded from liability for posting the infringing material if it meets certain statutory requirements. To be eligible for the storage safe harbor, an Online Service Provider (or “OSP”) must: • Adopt, inform users of and implement a repeat infringer policy. • Lack actual knowledge of infringement and lack awareness of facts and circumstances (“red flags”) making infringement apparent. • On obtaining such knowledge or awareness, expeditiously take down infringing matter. • Not have a direct financial benefit from infringement in circumstances where the OSP also has the right and ability to control the infringing activity. • Designate an agent for receipt of copyright claims both on the OSP’s website and in an online U.S. Copyright Office filing. • Adhere to the DMCA’s notice-and-take-down regime: o Expeditiously remove infringing matter or block access on

proper notice, and o (At the OSP’s option) offer and implement a counter-notice process. Digital Performance Right in Sound Recordings Act of 1995 (DPRA) - Grants owners of a copyright in sound recordings an exclusive right “to perform the copyrighted work publicly by means of a digital audio transmission.” The DPRA was enacted in response to the absence of a performance right for sound recordings in the Copyright Act of 1976 and a fear that digital technology would stand in for sales of physical records. The performance right for sound recordings under the DPRA is limited to transmissions over a digital transmission, so it is not as expansive as the performance right for other types of copyrighted works. Direct Licensing -- The process by which music rights owners choose not to use a PRO to license their works, but instead do so directly with the TV station, radio station, etc. Fair Use: • An exception to the requirement that a user must obtain permission from the copyright owner. • Usually applies to research, education, and parody contexts. • It is an affirmative defense -- it can only be invoked as a defense to an infringement suit. • There are 4 statutory factors that the court must weigh when considering whether a use is “Fair:” o the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; o the nature of the copyrighted work; o the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and o the effect of the use upon the potential market for or value of

the copyrighted work. Grand Rights -- the right to perform musical compositions within the context of a dramatic work. This includes stage performances such as musical theater, concert dance, and arrangements of music from a dramatic work. Library Music - Also known as stock music or production music, is the name given to recorded music that can be licensed to customers for use in film, television, radio and other media. Oftentimes, the music is produced and owned by production music libraries. Mechanical License/Royalty -- The permission granted by the copyright owner of a musical work to allow that work to be embodied in a mechanical format such as a phonorecord. The mechanical royalty is the payment that the copyright owner of the work is entitled to from sale or distribution of the phonorecord (whether for a fee or for free). The right to this royalty is guaranteed by the copyright law.

Music Modernization Act -- A bipartisan bill signed into law on October 11, 2018 that revised the way songwriters and recording artist are compensated. The Act: • Closes the pre-72 loophole by establishing federal copyright protection that will guarantee compensation for artists who recorded music before February 15, 1972;

• Codifies SoundExchange’s longtime practice of honoring “Letters of Direction” from artists who want to share royalties with studio producers and other creative participants who work with them;

• Creates a new process that will allow eligible participants in recordings made before the digital performance right was enacted in 1995 to share in digital royalties for those recordings; and

• Establishes a “willing buyer, willing seller” rate standard that will require all digital platforms to pay fair market value for music.

• Reforms Section 115 the Compulsory License Provision) to ensure songwriters are being compensated in a timely manner by ending the bulk Notice of Intent (NOI) process, creating a single Mechanical Licensing Collective (MLC) funded by the digital services, and providing a publicly accessible database for song ownership information; and • Repeal Section 114(i) which will allow courts setting public performance royalty rates to consider rates for sound recording royalties.

Notice of Intent (NOI) -- When someone wishes to do a cover version of a copyrighted work under the Compulsory License provision (see above), the new user must send a notification to the song’s original copyright owner of that user’s intent to do so. Performing Rights Society (PRO) -- An association, corporation, or other entity that licenses the public performance of nondramatic musical

works on behalf of copyright owners of such works. The major US PROs are the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), SESAC, Inc., Global Music Rights (GMR), and AllTrack. Phonorecords -- Material objects in which sounds, other than those accompanying a motion picture or other audiovisual work, are fixed by any method now known or later developed, and from which the sounds can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. The term “phonorecords” includes the material object in which the sounds are first fixed. “Sound recordings” are phonorecords. Print License/Royalty -- The permission granted by the copyright owner of a musical work to allow that work to be printed in physical copies. The print royalty is the payment that the copyright owner of the work is entitled to from sale or distribution of the printed music, and is based on a percentage of the selling price. Public Performance License/Royalty -- To perform or display a work “publicly” means— • to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or • to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times. • The royalty is the payment the songwriter and publisher are entitled to for public performances of their musical works.

SoundExchange -- The PRO of sorts for record labels, recording artists, and supporting musicians appearing on a sound recording. It is a non-profit collective rights management organization, and the sole organization designated by the U.S. Congress to collect and distribute digital performance royalties for sound recordings. Splits -- In a co-writing situation, simply the percentage of copyright ownership that each writer is entitled to. Statutory Mechanical Royalty Rate -- embodied in the Copyright Law (and adjusted in the Code of Federal Regulations -- CFR). It is currently 9.1¢ per song, or 1.75¢ per minute, whichever is longer (which generally

refers to songs over 5 minutes in length). Work For Hire -- A “work made for hire” is: (1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.

Writer’s Share & Publisher’s Share -- The PRO’s pay 1/2 of what they collect from licensees (radio stations, TV stations, etc.) directly to the songwriter(s), and the ½ to the publisher(s). This is often confusingly expressed as each one -- writer and publisher -- get 100% of their entitled share. SYNCHRONIZATION AND MASTER USE LICENSES WHAT IS A SYNCHRONIZATION LICENSE (OR “SYNCH” LICENSE)? An agreement that provides permission to use a copyrighted song in an audio-visual format. WHAT IS A MASTER USE LICENSE? An agreement that provides permission to release a copyrighted sound recording in an audio-visual format. The procedures below pertain to both Synch and Master Use licenses. SYNCHRONIZATION LICENSE A synchronization license is an agreement between a music user and the owner of a copyrighted composition (song), that grants permission to release the song in a video format (YouTube, DVDs, Blue-ray discs). This permission is also called synchronization rights, synch rights, and sync rights. DO I NEED A SYNCHRONIZATION LICENSE? • Whenever you release a recording of a song that someone else wrote

in an audio-visual format, even if it's just a small portion of the song, you need a synchronization license. Synchronization licenses are most commonly used for YouTube videos, cover song videos, wedding videos, and commercial and corporate videos. For example, if you release a YouTube video of your band playing a Rolling Stones song, even if you use only a portion of the song, you need a synchronization license. If you release a DVD of yourself playing a Beach Boys song or singing Mariah Carey lyrics, you need a synchronization license. • A synchronization license is required no matter how small a portion of the song you use. For medleys, each song part requires a separate synchronization license. There are some exceptions where a synchronization license is not required: You don't need a synchronization license for songs that you wrote yourself or songs that are in the public domain. • Note that synchronization licenses are for audio-visual products (DVDs, YouTube videos, other web videos, and slideshows). If you are creating an audio-only product, such as CDs or vinyl records, you need a mechanical license instead. Mechanical is for audio-only; synchronization is for audio-visual. • If you use an original recording belonging to someone else (for example an actual Beatles recording featuring John Lennon, Paul McCartney, Ringo Starr, and George Harrison) you will need a synchronization license to pay the composer for the right to use the composition (song), and also a master use license to pay the artists for the right to use the recording. This is true even if you are sampling only a very small portion of any existing copyrighted audio recording. • If you display lyrics or music notes in your video you will also need a print license to pay the composer for the right to display the composition (song). HOW DO I GET A SYNCHRONIZATION LICENSE?

Synchronization licenses are custom-negotiated directly with the copyright holder upfront and can be quite complex. In most instances, filmmakers (for example) hire companies that specialize in procuring synch and master use rights. Alternatively, you can attempt to locate the copyright owners yourself and request permission.

CHALLENGES OF OBTAINING SYNCHRONIZATION LICENSES Note that synchronization licensing can be challenging because, by law, synchronization rights holders maintain total control of their works when it comes to audio-visual works. This means they can set any fee, take all the time they need, and reject the license outright. Many factors affect the response, including budget, use, and even the current workload of the copyright holder’s processing department. For this reason, it is important to temper expectations when requesting a synchronization license. WHO GETS PAID? • A synchronization license pays a royalty to the copyright holder (owner) of the composition (song). This is typically the composer or their publisher. However, sometimes rights are sold. If synchronization rights are sold, a song might have a new owner, other than the original composer or publisher. For this reason, it is important to locate the current copyright holders before making a synchronization request. • It is important to note that underlying what most people think of as a "song" is actually two components: the composition (music notes and lyrics that make up a song, created by the composers) and the original recorded audio (recording of musicians playing the song, created by the artists). Often the composers and artists are the same people, but not always. These song components can be owned separately by different entities. For this reason, there are two types of licenses to protect the two types of creations: o Composition (mechanical or synchronization rights) The composition is the music notes and lyrics that define a song. The rights to the composition are usually owned by the

composer or their publisher. Permission is obtained through a mechanical license (audio-only) or synchronization license (video). o Recording (master use rights) The recording is a recorded performance of the composition (song). The rights to the recording are usually owned by the artist or their record label. Permission is obtained through a master license. When should I have a synchronization licensing in place? Synchronization licenses must be secured before distribution. However, because they are hard to get, a request should be made many months before the anticipated release date. It is also smart to have at least one backup plan in place, in case one is unable to get the synchronization or master use rights you want. For instance -- if you can get the rights to the song but not the master, a sound-alike can be recorded. Or if rights to a specific song cannot be obtained, you can commission a similar sounding song for the film....