Artists Legal Definition & Terms

Definition of Royalty

  1. Usage base payment made by one party to the other

  2. The right to "Use" and Art Work also Intellectual Property (IP)

  3. Sums of money paid to a creator or participant in an Artistic Work

  4. Individual sales of the Art Work

  5. The Art Work must have a copyright or a patent

  6. Amount of Royalties to be paid is negotiated through a contract

Royalty Free

Artists declare their work "Royalty Free" so anyone can use it in order to get more visibility, free downloads, etc.

Licensing Fee

  1. A resource of a property is licensed as the right to use from on e party to another (if you buy a Microsoft Visio app, you buy the right to use, the license not the code in itself)

  2. Restrictions apply - term limitation, business or geographical usage

  3. Looks like a contract - it is another usage contract

Trade Mark Royalties

Words, Tag Line, Logos, slogans - distinct expression - i.e. Coke is It is a trademark. Must be distinct to a product or a service, it identifies a brand. The # 1 recognized brands and logo in the world in 2020 are: Apple, Google, Microsoft & Amazon. You do not have the right to re-purpose or use their logos or the brand name unless you are a partner, a re-seller with required contract terms. The same applies to any registered trademark.

Copyright Royalties

Owner has the right to protect his/her work and prevent other person, companies, entities from copying, reproducing or creating a derivative from the original work.  The "Type" of work from performances are called Residual Royalties

 

Copyright Royalties: Gives Owners the following Rights:

  1. Make copies of the songs through prints or recordings

  2. To distribute them to public for profit

  3. Public performance right, live or through recording

  4. Create derivative work based on the original

Music Royalties

Strongest form of Individual Property tied to individual (as protected by law):

  1. Individuals can OWN EXCLUSIVE COPYRIGHTS of their work/art/music/painting/photograph

  2. Ability to License Art Work for performance outside of corporations

  3. Recording + Artist create a "Sound Recording" - protected by a set of Copyrights and Royalties from the Sales of Recordings and the digital transmission.

Internet Royalties

For Webcasts and other digital performances, companies are now monitoring the web such as Facebook, YouTube and other popular music site such as Pandora, SoundExchange, SoundCloud and more. Technologies is enabling companies to track and trace views/users/creators and more. YouTube can pay you to post your own content and will require proof that you actually own and wrote the material - meaning you registered your work or that you are paying the publishers, artists if using other artist's content or if you do a Cover Songs.

 

Typically, Artists, Producers, Record Label Companies and Copyrights owners  are closely tracking and tracing their work as well as the number of users/usage related to  “art activities” such as, downloads, purchased tracks and so on. Record companies must provide complete transparency to the artists in order to collect and distribute royalties.

 

Bangladesh has 3 major record labels that have not paid royalties to the artists in decades. The same is true for the Telcos. Artists remain unaware of their rights, most likely never signed a proper recording, distribution, royalty, master recording and publishing contract therefore it is fair to assume that the Record Labels "owns the rights" to reproduce, publish, use the content as they please. Unless the content was a knock-off from other artists, they then become liable to that label, publisher or artist.

 

Did you know that broadcasters of digital performances of music must pay royalties to the songwriters and publishers of the music they play? Thanks to the Digital Performance Right in Sound Recordings Act of 1995 (enforceable worldwide) we must also pay royalties to the recording artists.

Performance Royalties

Performances royalties are usually tracked and calculated on a regular basis, they are paid to the Artist by the performance rights organizations like ASCAP, BMI, SESAC. Sound Exchange and YouTube are tracking all content on the web and paying royalties directly to the creators/owners of the artwork.

Local Business Landscape

Bangladesh Judiciary System has a limited IP Protection and Copyrights task force, meaning it does not protect the artists - musicians, performers, writers, actors of software entities’ work. This is a very big mistake; it reduces to zero any foreign investments and allows India and other countries to rip off local musicians. The major recording labels in Bangladesh are fully aware of the Judiciary System limited understanding of IP Protection and unwillingness to enforce Copyrights Law. The lack of enforcement iis a tremendous blow to the Entertainment , Publishing and Software industry as a whole, it prevents companies from investing and sharing revenue and growh with Bangladesh artists and abroad. The lack of legal enforcement allowed the Record Labels to profit and acquire revenue in the $$$ Millions.

Did you know that bands such as Warfaze, Black, Arbovirus and many more are collecting a fraction of what is actually due to them? How is it possible that 1 hit song in the West makes you a millionaire? Royalties, Concerts, Telco Ads – combined makes any artists or a band millionaire in any other country. What’s up with Bangladesh?  Yes, Music and Entertainment IS BIG BUSINESS. Recording Labels are the millionaire – not the bands, thanks to an unregulated market, they suppressed the artists and wannabe musicians/bands for years, all too happy to get a record deal, be touring and on their way to fame. Adding insult to injury the record labels directly employed the artists/musicians as appeasement for “little compensation”.

The Disruptor - YouTube Content Creator

YouTube is becoming the authority as the Content Creator Platform of choice, Soon, it will provide all the tools you need to create content – sound recording, videos, marketing and merchandising platform. You can create, upload, distribute and monetize your content and get paid directly by YouTube. The Music Industry is evolving through online services and online distribution, you can create your own label, be the owner and publisher your work and monetize all in one place. Sure, nothing like a live concert to “feel an audience”, however large venues provide limited intimacy and connections with your audience small venues and Live Streaming can be the complementary tool.

 

Technology is a great disruptor – start here https://creatoracademy.youtube.com/page/home

 

Have you noticed the changes on YouTube lately? They are curating content and taking down illegal uploads -whoever posted the content and if not the owner or nor permission to use – the track is being removed. This is a major step for any content creator. The search algorithm and pattern matching combine with AI can identify in seconds any melody/song and trace it back to its original owner or publisher of that artwork. You cannot hide anymore by ripping off other people's work – since many Artists, pop musicians and rock bands in Bangladesh did copy western melodies, the record labels and the artists would be wise to remove those songs else they will soon discover how much they owe to the original authors/publishers and Western Record Labels (Sony, EMI, WARNER, etc.).  ​

​ILLEGAL DOWNLOAD IS CATCHING UP WITH YOU ALONG WITH COVER SONGS

Yes, illegal downloads and piracy hurt the artists, their brand, but more so you are stealing the legitimacy of someone's work - everyone needs to get paid for their work - so consume and use ethically. Be aware of recording concerts or anything without the authorization of the artists or publishers -if the content is not yours or proof that you own it or have the right to it – you cannot use the work in any form or shape be a cover song or a jingle. You need a contract that gives you the legal rights to use.

Recommendations

Artists must register their work outside of Bangladesh or even reach out to outside recording and publishing music house outside of Bangladesh.

If you composed a song/melody then register it. Once you do so, anyone who uses that melody/song for any form of broadcasting mediums such as Radios, TVs, Concerts or Mobile/Telecom in order to advertise product(s) other than yours and without your consent - it is illegal and they owe you money/royalty fees. You have the right to legal action and compensation -register the case in Bangladesh and outside of Bangladesh - you will win the case.

Use YouTube to put your work out there, TikTok, Instagram all those platforms are great for awareness. The music genre such as Baul is a great example of Bangladesh Artists who gained fame while touring in India, Germany, UK, France, US, Sweden etc., they secured the protection of their arts and work and went on to sign recordings agreements with European Recording Labels.

 

​Artists all across Bangladesh should unite and create a Bangladesh Performance Rights Organization that would represent their needs and protect all forms of artwork. promote Bangla as a language and culture.

As an Artist, you must register your work with ALL 3 organizations ASCAP, BMI, SESAC - if releasing internationally on a platform like YouTube or Spotify or CloudEx change or iTunes, etc.

1.     Royalty begins when the song is registered with the performing rights organizations

2.     Once a song is registered, it becomes part of a PRO's collection and is available to all of its users.

3.     One type of Users may have a "blanket license" to use any or all of the PRO's music,

4.     Other users license on a per program basis and only pay for the music they actually use.

5.     The PROs deduct money for their operating expenses and the rest goes to the songwriters and publishers.

6.     PRO customers include just about anyone who plays music in a public place -- even those who play "hold" music for their business.

7.     Television networks, cable television stations, radio stations, background music services like, colleges and universities, concert presenters, symphony orchestras, Web sites, bars, restaurants, hotels, theme parks, elevators, retailers, circuses, you name it -- if they play YOUR music, they must have license and pay YOU royalties.

Tracking the Playlists

The difficulty for these organizations is tracking all music to get an accurate record of how much royalty money needs to be paid to which songwriters and publishers. Each of the PROs use a different system for calculations.  The American ASCAP system uses two methods for determining performances:  a) it counts them or b) does a sample survey.

No none yet from Bangladesh has requested this service or been able to enforce this, however, if YOU AS AN ARTIST register your work with the 3 major publishing entities in North America and Europe, then you can begin the development on tracking music patterns, waves and measuring track usage:

1.      For television performances, ASCAP depends on cue sheets that program producers provide them, as well as program schedules, network and station logs, and even tapes of the broadcasts. ASCAP developed its own computer program to help studios and program producers report performances. 

2.      For radio performances, ASCAP does a sample survey of all radio stations, including college stations and public radio. To do this, it uses a digital tracking system, station logs provided by the radio stations, and recordings of the actual broadcasts. Today new technologies and AI are greatly improving the mechanism and early tracking and collecting melodies and patterns to be matched against an original track. 

3.      For live performances, ASCAP reviews set lists provided by concert promoters, performing artists, and others. In the case of symphony performance information, the printed programs are submitted.

4.      Licensed Internet sites, circuses, theme parks, etc. provide ASCAP with their own music use data.

Others that use music, like restaurants and bars, are not surveyed and simply pay a flat rate that is distributed based on trends in local radio stations (based on the type of music).

 

5.     Others that use music, like restaurants and bars, are not surveyed and simply pay a flat rate that is distributed based on trends in local radio stations (based on the type of music).

Example of Royalties Calculation

ASCAP's royalty calculations are based on a system of credits.

 

Example of how the money is calculated based on the ASCAP system:

ASCAP weights different factors in order to come up with a song's total "credits" and a fair royalty calculation.

  1. The song is weighted based on the type of performance (theme, underscore, or promotional); this is known as the use weight.

  2. A song that is featured and sung by a recording artist on TV or radio gets more weight than one that was played as background music during a radio commercial.

  3. The licensee (radio station, TV station, etc.) is weighted based on its licensing fee, which in turn is based on the licensee's markets and number of stations carrying its broadcast signal.

  4. There is a weight applied to the time of day the music is performed (particularly in television). Music played during peak view/listener times receives more weight.

  5. ASCAP also uses a follow the dollar factor, which means that songwriters and publishers are paid based on the medium from which the money came. Money paid out from radio stations is paid for radio performances.

  6. A general licensing allocation is figured for fees that ASCAP collects from bars, hotels and other non-broadcast licensees. These fees are distributed to songwriters and publishers based on similar radio and TV broadcasts of the individual songs. In other words, they estimate that restaurants and bars are playing the songs at a similar rate as the local radio and TV stations.

 

How do they figure out the number of credits a song title has?

Use weight x Licensee weight x "Follow the dollar" weight x "Time of day" weight x "General licensing allocation" + Any radio feature premium credits (bonus credits for top played songs that reach a specific threshold within a quarter) = Total number of credits

 

The total number of credits is multiplied by the shares for the song (how the royalties are split between writers and publishers). This number is multiplied by the credit value for the song. The value of one credit (credit value) is arrived at by dividing the total number of credits for all writers and publishers by the total amount of money available for distribution for that quarter.

 

For example, if there are a total of 10 million credits for a quarter, and there have been 35 million dollars collected for distribution that quarter, then the value of one credit for that quarter is $3.50.

 

The final number is the royalty payment:   4,000 Credits x 50% (.5) Share x $3.50 Credit Value = $7,000 Royalty payments are paid quarterly. These calculations are quite difficult and vary somewhat between each of the three PROs.

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