Clearing Synchronization Rights For Music Uses on the Internet
Entertainment Law & Finance, January 2001
By Steve Gordon

In the past several years, more and more audiovisual works have started to appear on the Internet, ranging from music videos to full-scale concerts. Therefore, it is important to understand not only the necessity of obtaining a "synchronization" license to use the underlying music, but also the range of rights that should be obtained and how much those rights should cost.

A synchronization license authorizes the user to synchronize music with an audiovisual work. This permission actually consists of two separate elements: the permission to reproduce the music in connection with a particular audiovisual work (e.g., a movie or an audiovisual recording of a concert), coupled with certain conditions limiting how the audiovisual work may be used. Such conditions may restrict the medium in which the audiovisual work may be used (such as only on cable TV or only on the Internet), the territory and the duration of the license.There is no law or statute governing the amount of money that must be paid for a synchronization license. This is unlike a mechanical" license. A mechanical license permits the reproduction of music in a form that may be heard with the aid of a "mechanical" device, without visual images. An example of a mechanical use of music is a standard audio-only CD. If the song has been recorded before, the mechanical license is subject to a compulsory license fee set by federal statute. Each "synch" license, in contrast, must be negotiated individually.

Music Videos
One of the most popular uses of audiovisual content involving music on the Web is for music videos. For music videos, there is an industry wide practice of granting a free license for television. Sometimes, a token charge of less than $200 is exacted. Music publishers (which represent most songwriters, for the purpose of licensing) perceive music videos as promoting record sales from which they reap mechanical royalties. Therefore, they do not charge much, if anything, for this kind of synch license. But many publishers will limit the medium in which a music video may be shown to television. Some specifically prohibit the use of the music video on the Internet. Certain publishers perceive the Web as a possible way for the song to be copied. This problem may be overcome by discussing the precautions against downloading that the licensee will take.

A record company may be in a stronger position than most providers of audiovisual works, because of the so-called "controlled composition" clause contained in many recording contracts This provision generally provides, in relevant part, that with respect to songs that the artist wrote or co-wrote, the artist grants a free synch license to the record company to use the song in any audiovisual work that the record company produces or controls. Most music videos are produced by the labels on a work-for-hire basis. That is, the labels own and control the videos. Many music videos feature songs that were written or co-written by the artist. Therefore, a record company often obtains a free synch license in many of the music videos it produces.

Furthermore, the controlled composition clause generally allows the label to exploit the music video in any medium, including the Internet. Consequently, record companies will often have the right to play music videos on the Internet without having to ask permission for a synch license or pay any fee. It is also important to note another advantage a record company has in using a music video in any media including the Internet. Most music videos are actually silent movies synchronized to prerecorded tracks. The record companies usually produce and own these recordings or masters. An independent producer who makes a silent movie and synchronizes it to a prerecorded track would not only need a synch license from the songwriter to use the underlying musical composition, but would also need a "master use" license from the record company to use the prerecorded musical track.

Recorded Audiovisual Concerts
Another fast-growing area of music on the Web is the transmission of live or prerecorded con-certs. An audiovisual recorded concert is generally viewed differently than a music video by the songwriting community. A music video sometimes referred to as a "promo video," is generally seen as promoting the album in which the song is incorporated. Increased album sales will result in additional mechanical royalties to the songwriters, and the music publishers that represent them. Music videos are also gener-ally provided to television outlets at no charge in the hopes that the television exposure will spur album sales. In contrast, producers of audiovisual concerts will generally seek to charge TV outlets for airing a con-cert. Although these fees may only reimburse the producers for the cost of recording the concert, a fee is generally exacted because the songwriting community generally perceives the concerts as commer-cial ventures rather than purely promotional. For this reason, producers or owners of audiovisual recorded concerts should expect to pay for a synch license. An excep-tion is a live concert. Copyright law exempts live concerts from the requirement to obtain a synch license. However, if-and this is usually the case-the audiovisual recording of the concert is repeat-ed, a synch license will be required.

If the artist featured in the concert is young and relatively unknown, the producer may be able to convince the songwriter, or his or her music publisher, that the concert is promotional. The argu-ment is that the concert will make very little or no money for the pro-ducer, but will promote the artist and his or her songs, resulting in future mechanical royalties from album sales for the songwriter and the publisher. If the artist is established, or a star such as Michael Jackson, it will be far more difficult to obtain a free synch license. In that case, the producer shall have to negotiate with the publisher. The permission to use the song and the fee will both depend on the nature of the rights requested.

For the Internet, those charges range depending on the manner and duration of use sought. First of all, publishers will generally prohibit downloading, to prevent decreased record sales from which they receive mechanical royalties. A concert producer must also decide whether to ask for video-on-demand or a set number of prescheduled performances. Video-on-demand allows users to see the concert any time they want. Or the producer may ask for permission to transmit a limited number of prescheduled performances similar to the way per-per-view presently works on cable systems throughout the country. The producer must understand that certain publishers will not authorize a license, no matter what the price, for video-on-demand. Therefore, only the latter alternative may be available. Many music publishers charge a fee com-parable to basic cable licenses. These charges are generally lower than network TV licenses, because the number of concert viewers on the Internet is anticipated to be far fewer than for a network perfor-mance. An average cost of a cable license is $500 to $1500 in the United States alone, depending on a number of factors that include the duration of the license, the number of plays requested and the popularity of the song and the artist. Still, the producer may pay more for the Internet use, because transmission on the Web may be seen by viewers all over the world.

Again, record companies may be in a stronger position than most concert producers because of the controlled composition clause. As stated earlier, with respect to songs that the artist wrote or co-wrote, the artist grants the record compa-ny a free synch license to use the song in any audiovisual work that the record company produces. Thus, if the label produced the concert, it may be entitled to a free license, at least in songs that the artist wrote or co-wrote.

Generally, these clauses are written very broadly and cover transmission on the Web, even if they were written before the advent of the popularity or even the existence of the Internet. Of course, the artist can ask for a modification of this clause before agreeing to perform in, and allowing the recording of, the concert. We have already discussed the record companies' rights in prerecorded masters for use in music videos. But record companies also have other rights that come into play in the recording of concert programs. Many recording contracts prohibit an artist from recording two or more audiovisual renditions of songs for any purpose, without consent. Thus, if an ndependent producer records a concert without the label's permission, the producer may run afoul of the artist's contract with the record company, subjecting the producer to a claim of "interference with contract." However, a record company often wants to support an audiovisual recording of a concert in return for particular rights. Support could come in the form of providing for the artist's travel and accommoda-tions, rehearsal fees, and the like. The record company may even contribute to production costs in return for certain rights, such as home video.

Who would control the Internet rights would be subject to negotiation. Of course, these considerations would not come into play with unsigned artists.

Performing Rights Societies
Even with a synch license, the producer is not totally in the clear. He or she should make the Internet service responsible for so-called public performance licenses and fees. A public performance license is the right to play music publicly. A performance on the Internet is considered a public performance and requires a public performance license. The performing rights societies control the performing rights for the great majority of songs. In the United States, the three major performing rights societies are ASCAP, BMI and SESAC. The producer should get the Internet service transmitting the video or concert to warrant and represent that it has secured licenses from the performance rights societies, or at least assume all responsibility for their payment, including reasonable attorney fees in case of litigation.

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