Resale Rights For Artists

Are you a visual artist? Have you sold works of art that are now being resold? You may be entitled to a share of the proceeds of sales of your physical works that are no longer owned by you.

An artist’s resale right, otherwise known as the “Droit de Suite” gives artists a right to a royalty from the proceeds of re-sales of their works.

In Europe, the right was introduced in 2006. It entitles artists to a share of the proceeds from sales of their works by an art market professional such as a gallery, auction house, dealer or agent. The right, which does not apply to a first sale of a work, applies to sales exceeding Euros 1000 and is calculated on a sliding scale (from 4% going down to 0.25%) with an earnings cap of Euros 12,500.

In the UK, which ratified the European artist resale right in 2006, the right applies to works created by artists who have been dead for less than 70 years. In order to secure resale rights artists must do so through an approved collecting society. One such collecting society is the Design and Artists Copyright Society in the UK.

The right exists in various forms in as many as 50 jurisdictions around the world. Interestingly, the right has developed a long way since an intergovernmental copyright committee held in Geneva in 1958 stated that “only four or five States have, so far, included this right in their national legislation”.

In the US, the right was introduced into Californian law back in 1976. The California Resale Royalty Act (Civil Code section 986) entitles artists, to 5 percent of the resale of any work of fine art of $1,000 or more and continues for the life of the artist plus 20 years.

Towards the end of 2011, a bill called ‘The Equity for Visual Artists Act 2011’ was put forward in the US. This bill, when accepted, will require large art auction houses to pay 7% royalties on re-sales of artworks for over $10,000. The rule would only apply only to works of living artists, and deceased artists whose works are still protected by copyright. Further, only auction houses with annual sales of $25 million or more would have to pay such royalties. The rule will not apply to auction sites that operate only on the internet or to private sellers. An interesting alternative point of view on this bill and other related matters can be found here.

Sadly, the right does not exist in Israel. This essentially means that artists need to cater for such scenarios contractually.

Copyright Law Changes in India

In June of this year, the Copyright (Amendment) Act 2012 came into force in India.

The changes in the law may mark the start of a period of uncertaintly for the Indian entertainment industry as bodies with conflicting interests battle out their differing views on how the amendments should be interpreted.

A copy of the new amendment can be found here. The original Copyright Act 1957 text can be found here.

For an interesting overview of the changes please see pages 20-36 in SoundBox India – June 2012 issue, a link to which can be found here.

Is a copyright owners consent required for selling second hand books on e-bay?

The US Supreme Court on Monday agreed to consider whether an eBay seller needs the consent of a copyright owner to import and resell books manufactured abroad.

Though U.S. law gives such freedom under the first-sale doctrine, the idea of applying the rule to foreign works is novel.

Unable to use the doctrine as a defense, Supap Kirtsaeng was ordered by a federal jury in Manhattan to pay $600,000 in damages to John Wiley & Sons for copyright infringement.

For full article see: Courthouse News Service.

EMI Sues Grooveshark

EMI Music, the biggest record publisher in the world, has terminated its contract with streaming site Grooveshark. According to BBC’ s News Techology website, this: “…comes three months after EMI announced it was suing the service for not paying royalties…EMI’s withdrawal means Grooveshark currently has no major record labels on board with the service…”.

The steep fall in download revenues and the meteoric rise of streaming services seem to be taking their toll. As reports, Grooveshark: “…Issued a response to EMI’s court filing and allegations: “Grooveshark was recently forced to make the difficult decision to part ways with EMI due to EMI’s currently unsustainable streaming rates and EMI’s pending merger with Universal Music Group, which we consider monopolistic and in violation of antitrust laws,” the company wrote. “To date, Grooveshark has paid over $2.6 million to EMI, but we have yet to find sustainable streaming rates. In spite of this, Grooveshark’s dedication to artists and rights holders remains the same…”.

For full article see here

Income Stream Basics for Musical Creators

An article written by Eldar Manor and published on the IndiEarth Blog:

When a song is performed, recorded and finally distributed, various income streams ensue. What are these income streams, what are their sources, who is entitled to them and how do we ensure that at least a better part of them comes our way? These are some questions any aspiring musician should be asking themselves when setting out on a career in the music business.

Income from Copyrights

In this context, income streams are those sources of income that are generated by usage of creative properties. Creative properties are made up of various elements such as the song, the performance and the recording in the case of a musical track or the visual recording, the artwork and other creative elements in the case of a video clip. Given that there are property rights in each of these elements, when a musical track or a video clip is broadcast on TV, played on radio, streamed or downloaded online, synchronized as part of an ad or a film, included in an album in various formats etc., money is usually generated. These property rights are: a copyright in the song, a copyright in the sound, visual recording & artwork and a performance right in the performance.

Permission & Collecting Societies

Owning a copyright means that use of it requires permission from the rights holder. And granting permission to use a copyright work may mean that income may follow. In the case of use of a musical track, permission is usually required from the copyright owner of the song and the copyright owner of the recording (and in some cases also from the owner of the performance right in the performance).

In some cases, such as when use of a song or a recording is required for use in advertising, direct permission from the copyright owners may be required in each and every case. But obtaining direct permission from each and every rights owner may not be feasible in all use requirement situations. Thus if a radio station, whether terrestrial or online, would have to clear rights directly with the rights holders of all creative elements in all the tracks that that radio station planned to play, then it may just as well close down its operations given the disproportionate resources that it would have to invest in clearing rights. In order to facilitate the licensing process, some copyrights are administered by collecting societies.

Collecting societies are bodies that represent a large number of rights holders of a certain copyright. Different collecting societies have different roles but in general, their main function is to license, police and administer the copyrights of the members they represent. Some such collecting societies are those representing performance rights holders in songs (such as PRS in the UK, AKUM in Israel, IPRS in India, ASCAP and BMI in the US), those representing mechanical rights holders in songs (such as MCPS in the UK, AKUM in Israel, Harry Fox in the US), those representing rights of performers (such as Eshkolot in Israel and PPL in the UK), and those representing recording rights holders in recordings (such as PPL in the UK, IFPI & PIL in Israel, PPL in India, Sound Exchange in the US).

One of the greatest advantages of collecting societies for those entities making widespread use of creative properties (such as radio and TV stations) are blanket licensing schemes. These allow access to collecting society repertoire with “relative” ease in return for pre-agreed remuneration terms for the particular collecting society.

Access to Revenue Streams Is Changing

A creator’s access to and size of share of revenue streams may depend on what rights he has in the particular creative property. Thus, owning the copyright in a recording may mean a larger share of the income from the recording.

In the past, the roles of parties involved in the creative and business aspects of the music industry were clearly defined, whereas today roles have become blurred. With fast paced technological developments, lesser label investment and greater access to fans and potential markets, creators are taking on both creative and label responsibilities.

Today, many independent artists own the copyright in their recordings and are more often than not also the publishers of their own songs. This is of great advantage to creators given that this state of affairs allows them to divide the rights pie into parts that suit their needs. It also allows them to ensure that they not only keep a larger share of the ensuing revenue streams but that their relationships with distributors and publishers may be limited in time and in scope.

Change is also occurring even in areas where traditional models still apply. Recently, well-known rapper Eminem, won a court case in which it was found that music downloads from iTunes are licenses and not sales. The distinction is important for those creators who do not own the copyright in the sound recordings they perform in. This is because in most “older” recording agreements labels pay royalties from sales and royalties from licenses. Royalties from sales are traditionally lower than those from Licenses. The distinction may mean earnings worth many more millions of dollars for larger selling artists. You can read an article about this here.

This distinction though may be a short lived victory given the downhill path that download revenues are taking as a result of the meteoric rise of subscription and streaming services, which essentially means lower royalties for creators (streaming a track cost less than downloading it).

Distribution & Publishing

Notwithstanding their greater independence today, creators do still require the expertise of others. Nominating the right distributor and publisher may be key to gaining effective access to markets and ensuing revenue streams. Reaching the most popular online retail stores does usually require a digital distributor, and ensuring proper management of uses and revenue from collecting societies does require an experienced music publisher.

When a creator nominates a distributor or a publisher he is in fact giving a share of his earnings to an entity that should have the required experience, legal acumen and organizational skills to ensure a proper dealing with his creative properties. Sadly, this is not always the case. It is thus always recommended, when granting distribution and publishing rights, to do so for a limited period of time. This will ensure that in the long run, if one is unhappy with a distributor or a publisher, one can always move elsewhere.

Pushing Borders

The “long tail”, a term well known to independent musicians in connection with revenues emanating in the digital distribution arena, is also relevant today to other revenue streams such as collecting society income and income from sync licenses. For this reason, creators are for forced to constantly diversify their “work portfolio” to sometimes unchartered waters. Pushing borders means exciting times for the independent creators. After all, isn’t that what art is all about?

Reality though means not only a shifting in the structure of a creator’s activities but also in the ensuing revenue streams. Greater freedom, coupled with technological advances and a more accessible and communicative world means greater collaboration, exploration and potential exposure for creators in places and cultures which were impossible to reach in the past. In terms of revenue streams this diversity also means a greater need for effective management of creative properties, a skill which creators do not always have or do not want to have. But this though, we shall have to leave for another post…




Israel’s Big Brother Saga Continues

Saar Sheinfine, the runner up in the second season of the israeli version of the Big Brother hit TV series, and now a local celebrity thanks to the intense media coverage the program receives, issued proceedings in the Tel Aviv local court today against the producer of the program, Kuperman Productions and the programs psychiatrist, Dr. Ilan Rabinowitch. According to an article published in Israel’s leading news website, Ynet, Mr. Sheinfine is suing for damages to the sum of INS 2,500,000 (approx 500,000 euros) claiming that his participation in the program has rendered him 30% disabled. According to Sheinfine, at quite an early stage in the program he wanted to leave, but was convinced otherwise by the programs production team and the programs psychiatrist, who allegedly also persuaded Scheinfine to take psychiatric drugs.

Participants in such high profile programs usually sign very “tight” agreements which are meant to protect the programs production company, the broadcaster and key personel from exactly such scenarios. In this respect, it will be interesting to see how the agreement Mr. Sheinfine signed fares this storm. Mr. Sheinfine, has obviously taken into account that the pressure he is putting on the powers that be, may force them to reach an out of court settlement with him. But even there Keshet will be taking a huge risk given that any settlement, even out of court, may encourage other participants to take a similar path. There is much at stake here not only for the broadcaster of the program Keshet Broadcasting, but also for other production companies, all eagre to see this saga unravel.

Given the public nature of the proceedings, the Israeli public and broadcasting media professionals will receive an unprecedented insight into the behind the scenes workings of Israel’s most popular TV program.

Big Brother Looked At

The 2nd Authority for Television and Radio, Israel’s commercial TV and Radio regulator, has commenced looking into the psychiatric treatment that is given to participants in the Israeli version of the hit prime time reality TV show “Big Brother“.

Israeli news has been flooded in recent days with the revelations that some of the participants in the “Big Brother” show were allegedly given psychiatric medicine.

Keshet, the broadcaster of the show has been asked to provide clarifications and information with regard to the matter.

The 2nd Authority for Television and Radio has said that the newspaper reports in this matter are a cause for concern and that it will look into the way participants are chosen, the medical treatment they receive and the extent of the medical treatment actually dispensed during the show.

According to an article by Shelly Pritzker of Calcalist published on the 2nd Authority for Television and Radio’s website, Keshet has stated that in the current season of the program, psychiatric treatment and medicine were not required for this season of the program and that all in all, out of one hundred participants of the program to date, only 6 have required such treatment, and that this number is lower than the national average.

Pinterest’s popularity soars, but copyright questions abound

Pinterest is a “virtual pinboard” that “lets you organize and share all the beautiful things you find on the web.” Pinterest’s sole function is to provide a network of virtual pinboards and a means for its users to “pin” photos to them. Unlike Facebook, YouTube, and Twitter, Pinterest isn’t about user-generated content. Beyond the ability for users to comment on their pins, Pinterest is about aggregation of third-party content.

Most social networking site operators happily rely on the “safe harbor” afforded them by the Digital Millennium Copyright Act (DMCA). In this respect, Pinterest appears to have its procedural ducks in a row. It has a designated copyright agent, displays the DMCA notice and take-down procedure, and has a clear copyright policy.

Copyright matters though are about to become its biggest concern, and in this respect Pinterest has taken additional steps to preclude copyright infringement. Pinterest has developed a “nopin” meta tag, which site owners can use to disable the Pin It applet on their websites, thus preventing Pinterest users from easily pinning photos from that site to their pinboards.  

So what is next for Pinterest? Is its sudden popularity merely the flashpoint for copyright woes that will sink the site as quickly as it appeared? Can it find a way to allow its users to retain the freedom to pin and simultaneously appease copyright owners? Or does Pinterest represent something else entirely — a new breed of social networking heralding an era of “relaxed” copyright protection? For full article see Pinterest’s popularity soars, but (p)interesting copyright questions abound – Lexology.

Record companies win first round v The Pirate Bay in the UK but pirates remain at large

In a decision handed down by Mr Justice Arnold on 20 February 2012, the High Court finds that UK users of The Pirate Bay website are liable for copyright infringement for communicating copyrighted sound recordings to the public and that the operators of The Pirate Bay authorise infringements of copyright by its users and are jointly liable for these copyright infringements (Dramatico Entertainment Limited & others v British Sky Broadcasting Limited & others [2012] EWHC 268 (Ch).     

Record companies win first round v The Pirate Bay in the UK but pirates remain at large – Lexology.