What They'll Never Tell You About the Music Business

by Peter M Thall

  Included within the New York State Council on the Arts mission statement is the following: “The Council believes in the rights of all New Yorkers to access and experience the power of the arts and culture.” Among other things, this philosophy is what drives the Council’s grant-making decisions. One of their grant recipients, the New York Festival of Song, which is dedicated to the reinvention of the art song recital, has a significant educational outreach program. It is worth repeating their philosophy:

  Exposure to music as a creative endeavor is an integral part of a student’s education, requiring specific thinking skills, an active imagination, a fresh look at history, and an appreciation of cultural differences. We have the greatest impact when we go beyond simple music appreciation, and actively engage students in applying their new understanding to the creation of their own music and poetry.

  Nevertheless, the road of a talented classical instrumentalist remains a hard one. Blair Tindell, oboist and author, estimates that in 2005, over 5,000 graduates with degrees in music were pursuing only 250 orchestral vacancies.

  Why is the classical music audience so old?

  I wrote earlier about the comfort that concertgoers experience listening to music. They do not need to know what is happening on their smartphone every few minutes. Their concentration span is more than a few seconds. I find it interesting that the “gray” audience was young not so long ago. What drew them to classical music is not the same thing that was appealing to them when they were young. Their needs and desires change over time. Unfortunately, the growth rate of audiences is slowing and the young are less likely to replace them than at any time in history. The arts institutions (from the LA Philharmonic to the New York Philharmonic, from small orchestras to smaller chamber music and vocal organizations) are beginning to open up avenues of communication between their performers and the young people who would not have ordinarily attended a concert. They are accomplishing this in many instances via social media. Texting and tweeting back and forth before and during a concert have become as routine as summer picnic concepts on the lawns of Tanglewood, Ravinia, and Wolftrap. Some instrumentalists are distracted by the appearance of cell phone illumination across the audience spectrum, but some arts institutions are sticking with the effort, hoping to appeal more to the culture-savvy population. However they try, one thing is a proven fact: get someone into a concert that is transcendent, and you will have a classical music lover for life. Whether they’ll spill for the cost of the ticket (and the parking and the dinner and the gas) is another story entirely.

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  Is there still room in our lives for classical music? My answer is a resounding “yes!” For the same reason that Kenneth Branaugh’s Henry IV and Ralph Fiennes’s (or Mel Gibson’s) Hamlet resonate with 21st-century audiences, new recordings of Bach, Beethoven, and Brahms can be exciting and commercially successful. Just as we have Laurence Olivier and John Gielgud—all the great Shakespearian actors in the last fifty to seventy-five years on film in one format or another—we also have multiple versions of all the classical masterpieces. Obviously, there is a perceived need to replicate these performances again and again. Why? Because each generation needs to make these masterpieces work for them—and for us.

  And in a fundamental way they do. This is why they are called masterpieces.

  An instrumentalist, a vocalist, or a conductor identifying him- or herself with prestigious, if obscure, music, or mounting a performance that will have publicity value (as one Hungarian pianist did by playing all of Beethoven’s thirty-two piano sonatas in chronological order over the course of two daylong concerts) is one way to develop a career. Some of these projects are sponsored, and some receive terrific press and publicity. The artist’s reputation—and career—builds over time. Everyone in the small and insular world of classical music reads the same things—the same reviews, the same articles, the same news stories. The more they read about a particular artist, especially when the news is positive, the better will be the artist’s chance to establish a long-lasting reputation.

  Which brings me to another rationale for record companies to record classical artists regularly. I am not talking about artists whose appeal is tentative and fleeting, as is true of so many artists in the world of popular music. An artist who stays in the classical ring and is willing to pay his or her dues for ten, twelve, or fifteen years, and records regularly, will accumulate fifteen to twenty records over that span of time. (Sarah Chang, the great violinist, started recording at the age of nine. At twenty, she had already recorded two dozen CDs!)

  This scenario has numerous benefits for both artist and record company. Not only will the records show the maturation of the artist during the period of recording, but they will also constitute a sort of minicatalogue. The record company can highlight the artist by showcasing the artist at record stores via personal appearances. And the record company will have innumerable options with which it can market an artist, and not just a record. For once, volume counts.

  20 • TERMINATION OF GRANTS OF COPYRIGHTS

  For Every End, a Beginning

  Life never presents us with anything which may not be looked upon as a fresh starting point, no less than as a termination.

  —ANDRÉ GIDE

  BASIC TERM OF PROTECTION

  Before going into the incredibly complicated issue of termination of grants of copyright in the United States, a brief review of the history of the basic term of copyright protection is in order. Most of this chapter only deals with works whose copyright terms began before January 1, 1978. Any works created on or after that date are governed by the 1978 Copyright Act and the term of copyright for those works lasts for the duration of the author’s life plus seventy years.

  Between 1790 and 1909, US copyright law provided for a maximum term of protection of forty-two years (a twenty-eight-year initial term plus a fourteen-year renewal term). The 1909 Copyright Act stipulated an initial copyright term of twenty-eight years, renewable for a second twenty-eight years, for a maximum of fifty-six years. The current Copyright Act, which took effect on January 1, 1978, extended the maximum term for an additional period of nineteen years for a total term of protection of seventy-five years. On October 28, 1998, the maximum term was extended for an additional period of twenty years pursuant to what is known as the Sonny Bono Term Extension Act, for a total term of protection of ninety-five years.

  That is where the law stands today. Both the nineteen- and twenty-year extensions were to apply only if the works were protected at the times the extensions were enacted. The renewal term for a work originally published in 1977 (and thus not under the 1978 Act), would be ninety-five years (original terms of twenty-eight years plus twenty-eught-year renewal plus nineteen-year extension plus twenty-year extension). Thus protection for a work published in 1977 will expire in 2072.

  In anticipation of the passage of the 1978 act, Congress extended the maximum term of protection under the 1909 act several times, for a total term of seventy-five years, and so a work whose copyright term began in, say, 1921, did not enter the public domain fifty-six years later, on December 31, 1977, but rather in 1996. By the time the 1998 twenty-year extension was enacted, the work copyrighted in 1921 had already entered the public domain, and so the twenty-year extension did not apply to it. The same calculations apply to all works published on or before December 31, 1922. However, any work published or registered on or later than January 1, 1923, was still protected in 1998 and thus the twenty-year extension did apply. The protection for the first of these copyrights will expire on January 1, 2018 and for every work whose copyright protection began after January 1, 1923, various expiration dates, counted from 95 years following the original copyright date will apply.

  To summarize: Any copyrights published or registered before January 1, 1923, are in the public domain now. Period. (For an example, see box, this page.) Any copyrights published (with proper notice, which was a requirement under the 1909 law) or registered after Decemb
er 31, 1922 (and renewed in timely fashion) are currently protected by copyright.

  “K-K-K-KATY”

  “K-K-K-Katy” was originally registered on February 1, 1918. Under the 1909 Act, the original term of protection was due to end in 1946 (twenty-eight years after 1918). The copyright for “K-K-K-Katy” was properly renewed in 1946, which added twenty-eight years to the term of protection, giving the song a total term of fifty-six years, a period which ended in 1974. However, the various extension bills (the first was in 1962) extended the renewal term of “K-K-K-Katy” until December 31, 1976. The 1978 Copyright Act provided that any work still in copyright between December 1, 1976, and December 31, 1977 (which this song was), would be protected for a maximum of seventy-five years. “K-K-K-Katy” therefore entered the public domain in 1993—seventy-five years after 1918—and was therefore ineligible for the twenty-year extension enacted in 1998.

  Note that any new arrangement of this work made after 1993 is entitled to its own copyright—and copyright term—although only with respect to the new material embodied in the arrangement.

  TERMINATION OF GRANTS

  In the United States, alone among nations, an author or the author’s heirs can reacquire their copyrights—that is, terminate their grants—by the mere exercise of a notice to that effect. This can be done regardless of neglect of, inadequate attention to, or even incompetence in the administration of the copyrights—or even the total opposite, outstanding care and attention! Thus, a total failure to account and pay royalties has usually not been sufficient to warrant the cancellation of the assignment and the return to the assignors of their rights. The following sections discuss several aspects of US copyright law that are relevant to the issue of termination of grants. The list is not exhaustive, but should be sufficient for an understanding of all but the most convoluted examples. Note that these points apply in all cases:

  1. If no grant has ever been made, there is nothing to terminate.

  2. If a work has entered the public domain by virtue of the fact that a renewal has not occurred on time, there is nothing to terminate.

  DURATION OF COPYRIGHT: SUBSISTING COPYRIGHTS

  Section 304 of the 1978 Copyright Act is entitled Duration of Copyright: Subsisting Copyrights. Section 304(c), Termination of Transfers and Licenses Covering Extended Renewal Term, and it covers the conditions under which an author or the author’s heirs can terminate certain grants or transfers of copyright (or rights under copyright) that the author may have made during his or her lifetime. (Section 203, Termination of Transfers and Licenses Granted by the author, applies to grants made after December 31, 1977, and does not affect any works which acquired copyright protection prior to January 1, 1978.) The “author” can be the lyricist or the composer, and the termination rights apply only to that portion of the copyright that the author owns. (If there are two authors, each usually owns one-half.) It does not matter for purposes of the termination right whether the grants or transfers were exclusive or nonexclusive.

  The reasoning behind the enactment of this right was that once the 1978 Copyright Act had established an additional nineteen-year extension of protection, authors who had, under the previous law, thought to have given away up to fifty-six years of rights—usually to the authors’ publishers—were faced with a seventy-five-year loss of rights, with the grantees reaping any windfall profits that might accrue during the additional nineteen years. The same logic applies to the 1998 extension of twenty years.

  WHO CAN TERMINATE

  Any grant—whether by the original author or the author’s heirs—is terminable by the author (if still alive) or the currently surviving heirs of the author (or his deceased heirs). That’s it. If the author is deceased, the rights can be exercised by the author’s successors as follows:

  • 100% to surviving spouse when there are no children

  • 100% to the children when there is no surviving spouse

  • 50% to the surviving spouse and 50% to the children, the latter to be divided equally

  The surviving children of the author, and the surviving children of any deceased child, are each dealt with as an entity. This is what is referred to in legal jargon as sharing per stirpes.

  Example: A deceased author is survived by a wife and three children. Each of the children is entitled to one-third of the 50% children’s share of the termination rights. One of the three children dies, leaving two children, who will share equally in their parents’ one-third (of 50%) termination rights. (Note: The inheritance of rights does not extend beyond the level of grandchildren of the original author.)

  THE CONTROL OF TERMINATION DECISIONS

  Where an author leaves a number of heirs, how is a majority achieved among them? The Copyright Act stipulates that the author’s spouse has a 50% interest in the author’s share of the copyright. In cases in which there are children, the spouse still maintains a 50% interest, and the children divide the remaining 50% equally. Thus the termination decision can be made by the spouse and one child, because no matter what the split, the spouse plus one child’s share will be more than 50%.

  THE RIGHTS GRANTED

  The ownership of the copyright asset which has been recaptured has enormous value (up to fifteen times earnings), much of which is gained from the rights referred to below. Note that these rights apply only to the United States:

  • the right to administer 100% of the copyright and the rights under copyright (including the performance right, the mechanical right, the synchronization right, the display right, and the print right)

  • the right and opportunity to negotiate with a new publisher or renegotiate with an existing publisher the following: royalty splits, audit provisions, advances, and exploitation requirements by a new publisher should the acquiring party wish to place the copyrights in the hands of a US music publisher

  • the right and opportunity to isolate rights under copyright (for example, print rights, foreign rights, synch rights) and license them to one or more parties at a time, rather than assign the copyrights themselves to one publisher. These rights can be licensed exclusively or nonexclusively and for limited periods of time (five years, ten years, etc.) rather than for the entire length of the term of copyright.

  • the right and opportunity to use the power acquired by having recovered total control over the copyrights to change the terms of existing agreements, and therefore to stay with a long-term publisher and maintain old relationships—only now on more favorable terms. For example, the acquiring party might offer to return some of the US rights to the original publisher in return for an improved position with that publisher vis à vis rights outside of the United States.

  THE WINDOWS FOR TERMINATION

  This is where things get complicated. There are two time periods (windows) that concern us. First, according to Section 304(c), the termination may “be effected at any time during a period of five years beginning at the end of fifty-six years from the date copyright was originally secured, or beginning on January 1, 1978, whichever is later.” But to “be effected” does not preclude sending a notice before the fifty-six-year period expires. The second time period addresses this: These notices may be served not more than ten years prior to the date on which the notice is to become effective, as long as they are served not later than two years prior to the last possible effective date. The reason that one must give at least two years’ prior notice of termination is that the law accommodates the original grantee (usually a music publisher) by giving it an opportunity to prepare for the impending loss of its copyright.

  Example: A copyright was secured on January 1, 1964, and the renewal copyright was registered as required. The maximum copyright term pursuant to the 1909 Copyright Act will end on December 31, 2019 (that is, fifty-six years later). The earliest possible effective date of termination is January 1, 2020. The earliest possible date on which to send the termination notice was January 1, 2010 (that is, ten years prior to the earliest possible effective date of termination
. In order not to lose the chance to recapture the copyright entirely, that is for the entirety of the remaining years of protection, the terminating party would have to send the appropriate notice no later than two years before the end of the five-year window which began on the expiration of the original fifty-six-year term (December 31, 2019). On January 2, 2023, it will be too late.

  Your own actions determine the effective date of termination. In the example above, you could choose to terminate at the earliest possible time, in which case the effective date on which you could recapture the copyright would be January 1, 2020. Alternatively, you could choose to terminate at the latest possible time (January 1, 2023) in which case you could not recapture the copyright until 2025.

  One important detail to remember is that the dates on which termination notices can be served and the effective dates of termination are not calendar year ends (that is, December 31st of a given year). Normally, copyrights are registered on odd days during the calendar year.

  Example: “A Pretzel, A Beer, and A Burp” was registered by the copyright owner—the publisher—on October 6, 1952. The copyright was renewed in 1980 pursuant to the original grant, which gave the publisher the right to renew the copyright. The fifty-six-year term provided for under the 1909 act ended on December 31, 2008. (The term ended on the last day of the fifty-sixth year). However, the “effective date” five-year window began on October 6, 2008, and ended on October 5, 2013. Notice to terminate could have been served with respect to the thirty-nine-year extension period (that is, nineteen years plus twenty years) as early as October 6, 1998, ten years before the expiration of the fifty-sixth year after registration. The latest date by which a termination notice could have been given was October 5, 2011, which was two years before October 6, 2013, the end of the five-year window. If the author or his or her heirs terminated as of the earliest possible effective date, they have recaptured the entire additional thirty-nine years of copyright protection after 2008, and they would have been the owner of the copyright until 2047, when it will enter the public domain—finally. However, if they waited to terminate until the latest possible time—October 5, 2011, for an October 6, 2013, effective date—they would have lost five of the thirty-nine years of protection. Nevertheless, they still would recapture the copyright on October 6, 2013, and will be the owner of the copyright until 2047 when, as noted above, it will enter the public domain.