Obtaining Content Rights for Music DVDs
Entertainment Law & Finance, September 2001.
By Steve Gordon

At a time when the recording industry is suffering a decline in sales, due in part to unauthorized downloads facilitated by the Intemet, record companies are gaining a measure of solace from an increase in sales generated by another new technology: digital video discs. Music DVDs, like VHS cassettes, feature live music conceits or compilations of promotional video clips. DVDs, however, feature more brilliant visuals and higher-quality sound, and are capable of containing more content than VHS cassettes are.

Record labels can enhance sales by adding so-called "bonus" materials to each DVD release. Such bonus content usually consists of items such as photos and other images, bonus promo videos, audiovisual excerpts from TV appearances, biographies and discographies. The inclusion of such extra materials in DVDs raises a host of rights clearance issues.

Photos and Other Images
Bonus materials consisting of photos or other images fall into two basic cate-gories: pictures of the artist and pictures of others. If the image depicts the artist, the label generally does not need releases because recording agreements usually permit the record company to use images of an artist to promote the sale of records and videos. Of course, as a matter of artist relations, it makes good sense to allow the artist to veto the inclusion of any pictures the artist doesn't like.

Even if the only person depicted in an image is the artist, the label must make sure that it has the permission of the owner of the copyright in the image, unless it is in the public domain. Often marketing people at the labels will want to use photos from magazines, books or newspapers. However, the labels generally do not own these images. Unless the copyright holders in these images consent to their inclusion in the DVD, the label can be liable for copyright infringement and be subject to an injunction against further sales.

There is no standard fee for the use of images in a DVD, so each clearance is a separate negotiation. This is assuming the owner can even be found. On the other hand, the labels may own the right to use images from album art or photo Music DVDs shoots that the label commissioned. But even in that case, unless the images were created by an employee, the record company must have a con-tract transferring the copyright to the label or granting rights covering the use of the images in the DVD.

If people other than the artist appear in an image, the label must not only clear the copyright in the image, but may also have to secure releases for those people. Because a DVD is a commercial product, the people depicted in the picture could have a right-of-privacy claim; that is, that the label is using their picture for commercial gain. Even if the label can locate releases that were signed at the time that the picture was taken, that document may not be sufficient if the language of the release allows the use of the picture for promotional purposes only. In that case, a label may have to try to identify and locate the indi-vidual and enter into a new release allowing the commercial use of the image. On the other hand, if the image focuses on the artist, and the other people in the picture are not recognizable, then a release may not be required.

Promotional Videos
Typically, a label will commission an independent production company to produce a promotional music video. A great deal of money is invested in these promo clips. Some, particularly those featuring superstars such as Michael Jackson or Madonna, may cost more than $1 million each to produce. In exchange for a production fee (generally 15 percent), a production company will produce a promo video on a work-for-hire basis. This means that the label can use the video for any promotional or commercial purpose without any additional payment to, or consent from, the production company or any people hired by the production company, such as the director.

However, certain people appearing in the video-for instance, professional dancers-may be entitled to additional payments for their inclusion in a commercial DVD. The artist, too, may be entitled to additional roy-alties for the inclusion of the promo video in a DVD, depending on the content of the artist's recording agreement with the label. The bottom line, however, is that because the label usually owns the copyright in promo videos, the use of promo videos generally involves fewer clearance hurdles tan the use of other bonus materials.

Written Materials
Often a label will commission a writer to generate a short artist biography or liner notes for the release of a CD. The label may want to include these materials in the bonus section of the DVD to entice hardcore fans to buy the disc. If an employee of the label wrote these bios or liner notes, the label would own all rights in them. If the record company commissioned them from a freelance writer, the contract would probably allow their use either because the author transferred the copyrights in the material to the record company or because the grant of rights was broad enough to allow for their use in connection with any "record." Record is usually defined in music industry agreements to include audiovisual devices. But if a magazine article or newspaper review is sought, then the label will have to clear the writing from the owner, which may be the publication or the author, depending on the deal between the author and the publication.

Audiovisual Excerpts
Sometimes marketing and other creative types at a record company will want to include in the bonus section of a DVD footage of an artist's performance in a television show, such as "Saturday Night Live." Trying to get permission from one of these shows can be difficult because the program's producers may not want their show to be associated with the record label. However, the show may be more likely to respond favorably if the management for the artist pursues the clearance. The producers of the show may be more cooperative if they feel that they must do so to stay on favorable terms with the artist.

But even if consent is obtained, payment is usually required. These deals usually involve an advance against a certain per-unit royalty. If the orchestra from the show or the in-house band played with the artist during the television performance, the release of the performance in a DVD may require additional union-mandated payments. Finally, if the audio-visual footage was shot at a venue such as a concert hall or stadium, other union-required payments could be triggered to labor groups such as the stagehands.

Discography
Discographies usually consist of the tides of each previous album and home video of the artist featured in the DVD. The original packaging and artwork for each such album and home video may also be shown. In addition, each song contained in the prior record and home video may be listed. By clicking on the tide of each song, the consumer may be able to hear a brief excerpt of that song, or in the case of a home video, the viewer may hear and see an audio-visual excerpt.

In regard to album and home video artwork, the labels almost always get the right to use such artwork to promote sales of the record or video in issue. Using the packaging in discographies arguably promotes sales of the old albums and videos in issue. With respect to playing excerpts, the labels generally own the masters and the videos, so playing an excerpt does not generally pose any obstacles. However, this raises the issue of whether the labels must acquire additional licenses from the owners of the underlying music (i.e., the songwriters and their representatives, the music publishers) to play excerpts of the recordings. The record companies have generally taken the position that playing small excerpts of music to promote sales of a catalog does not require additional publishing licenses. To the knowledge of this writer, the songwriting community has not challenged this position.

Digital Downloads
Although DVDs are not generally available for download on the Internet, they soon may be. Thus, a lawyer who is clearing the home DVD should think about clearing the above materials for download as well. Of course, where third-party consent is necessary, this will probably require additional payments. The lawyer can structure such download rights as options not to be paid unless and until the disc becomes a digital file.

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