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The Rock-itt : July 2011
The Complex Industry of Publishing, Selling, Recording and Performing (cont’d) For a digital store to sell music it must have the song files on its own hard drives/servers – this allows the store to control the customer experience, provide customer support and control the shopping cart and check out process. W hen a song is bought or played on-line, it is the digital store that is fulfilling the download or stream; this is where the problem is. For a digital store to legally fulfil a stream or download it must get global licenses and make direct payments to copyright holders or the entities that represent them. As an example, a “download music store” like AmazonMP3 or iTunes, sells a song file. This song replicates itself onto your hard drive where it sits for you to access and play whenever you want. It is a one-time sale. The digital store only needs a license to the recording of the song, the (p), to sell it (this is not always the case in other countries, and is why you can’t buy from Apple stores outside of Australia). For the digital store to get the right to this copyright, it must negotiate directly with the record label that controls it. There are no pre-existing laws or rules in place that dictate how much the digital store must pay the label for each sale, this is a one to one negotiation with each side jockeying for the best deal terms – the label wants as much money as possible, the store wants to pay out as little as possible. This is what a contract between a record label and iTunes, Amazon etc is all about. Once this license is in place, and a song is sold via download from the digital store, the digital store pays the record label for sale of the recording, the (p). The record label then handles paying and administering any other money owed to copyright holders. This includes money owed to the person(s) that owns the song, the ©, or in the case above, Paul Kelly. The laws around the world state that each time a song is “reproduced.” (a download is legally considered to be a “reproduction”) the person(s) who wrote the song must get paid som ething called a “mechanical royalty.” In the US, the government pre-sets the “mechanical royalty” rate. Right now, for songs under five minutes it’s a little less than 10 cents– $0.091. The Australian scheme is not retrospective and individual usage of the right (by Australian artists) is not compulsory. Details of the Australian scheme can be gotten from the website of the sole appointed Australian agency; The "Copyright Agency Limited"(www.resaleroyalty.org.au). However, the music industry is moving to a streaming model, where people pay a recurring fee to listen to music on dem and – for exam ple, stores like Rhapsody, MOG, Napster and Spotify provide this type of “on- demand” streaming service. A customer just needs to be connected to the Net or, when they are not connected to the Net, be pre- approved to listen to what music they want when they want. There are also “free” services like YouTube and Spotify that have ads in them in place of charging consumers a fee. Streams for music services add a whole new complexity to the situation as every single time a song is streamed not only does the record label have to be paid but so must the person who wrote the song – i .e. Paul Kelly. Therefore, for a music service to offer on demand streams, it needs not one but three separate licenses. These three licenses are: � One license for the Recording of the song (the (p)) � One license for the Reproduction of the song (part of the ©), a mechanical royalty (the legal definition of mechanical royalty was expanded and states a stream is also a “reproduction”). � And one license for something called the Public Performance of the song. Continued next month..... Mike’s Music Gumbo Mike’s meandering mind of music mumbo jumbo reviews of the nation’s live music mayhem and events. By Mike Williamson Reproduced c/ Bemuso.com