Auditrix, Inc.: October 2014

Sunday, October 26, 2014

Recap of Last Week

Top items shared last week on LinkedIn and Twitter by Cedar Boschan:

L-R: Cedar Boschan, Austin Lucas & Kyla Akasha at The Observatory in Santa Ana

Great post on music publishing valuation by Derek C. Crownover @dickinsonwright via @nekstbiz

Association For Electronic Music highlights £100 million missing performance royalties | Complete Music Update

Auditrix:

Best of Last Week

The California Copyright Conference's #Streaming for Dollars Panel @cacopyright #irespectmusic

I just published "You Need a Better YouTube Strategy"

@musicbizcast: Ep. #7: Chris Opperman's journey from the basement of UMPG to Record Label Ownership @chris_opperman

Spotify curation startup gets bought by WMG via @guardian

Ford Seeks To Dodge Class Action Over Music Royalties - Law360

The music industry: "What used to be a question of persuasion has become a problem of prediction."

Americans are mad for music festivals, Eventbrite's study finds - NY Daily News

The New Yorker: "Crooner in Rights Spat"

# # #

Tuesday, October 21, 2014

All the Ways One Can "Buy a Record"

My favorite octogenarian attorney recently asked me:

"Please give me a list of all the ways someone can buy a record."

I came up with the following and included uses that may not strictly constitute sales or phonorecords under the U.S. Copyright Act:

1 – Consumers can purchase permanent copies of recordings in various configurations, such as:

a. From retailers (online like Amazon.com or brick and mortar like Target and Walmart) or directly from an artists’ website or at a concert (e.g., together with merchandise):

i. Vinyl Record

ii. Compact Disc

iii. DVD

iv. Embodied on video games

b. Permanent downloads from music services (e.g., from iTunes and Amazon.com) and video game console manufacturers (e.g., Sony’s PlayStation network and Microsoft’s Xbox store)

2 – Also, consumers pay for access to listen to recordings by subscribing to a music service such as the following:

a. Interactive services like Spotify and Beats (where users can stream on demand)

b. So-called "non-interactive" services like Pandora and Sirius XM (which offer users less control over programming)

3 – Alternately, companies pay to advertise to listeners or viewers of free programming on services like YouTube, Vevo, MTV and the services mentioned in #2 above. In this case, access to the recording is “free” to the consumer because the advertiser subsidizes the cost, but the consumer must watch or listen to ads in exchange for such free access.

4 – Finally, consumers who purchase electronics devices such as a Samsung phone or iPhone may find that music has been bundled with the device by the hardware seller, which pays the music rights holders for the right to do this (and thusly must build in the music cost in the device's price).

What ways to buy a record did I forget?

Please tell me what I failed to mention below!

Cedar Boschan

Clients with royalties?

Call the royalty experts: (424) 248-8866

Music Royalty & Litigation News Feed here.

Interactive Royalty & Litigation News Feed here.

Saturday, October 18, 2014

Best of Last Week from The Auditrix

7 qualities of addictive games
California Copyright Conference's "Are You Getting Paid? Best Practices for Unmatched Royalties" panel discussion, which I recapped here.

#IRespectMusic at the California Copyright Conference

Why most people aren’t downloading apps anymore - Quartz

UMG earns a "‘listener hour guarantee,’ which they know is going to up their compensation by about 40% — since it’s per listener hour, not per track, the artist gets screwed because it’s not attributable to a track, so the artist doesn't get a royalty." - Per Rich Bengloff of A2IM
30 years of the #music #industry in 30 seconds | Geek-Cetera
Per @schuylermmoore 506 offerings are outside of #state #laws
#crowdfunding @BHBA_EntLaw

Your Music #crowdfunding article by omarshamout (featuring quotes from me) - @LABJcommunity

Six Strikes plan to eliminate piracy finally operating at ‘full capacity’
What I spoke about last week to #business #managers:

Highlights from The California Copyright Conference's October 2014 Music Royalties Dinner

Last week, the California Copyright Conference presented a panel discussion entitled, "Are You Getting Paid? Best Practices for Unmatched Royalties"

October 2014 California Copyright Conference: L-R: Scott Berenson – Director, Claims Department at SoundExchange; Jake Wisely - President The Bicycle Music Company; Diane Snyder Ramirez – Vice President Royalty Accounting & Administration, Royalty Review Council; Chris Castle – Founder, Christian L. Castle, Attorneys, Austin; Anne Cecere – BMI, California Copyright Conference President; Not Pictured: Eric Palmquist - Vice President, Audit & Income Tracking, BMG Chrysalis

I tweeted a few insights from the panelists, such as:

One highlight was when panelist Chris Castle called on Henry Gradstein to speak on state copyright protection of pre-1972 sound recordings:

Henry Gradstein at the California Copyright Conference: Section 980 in California was amended to allow for common law (c) protection

But, a few tweets can't impart all of the valuable information that the panelists shared. To view the complete discussion, click here to join the California Copyright Conference.

#IRespectMusic

Eventually materials from the program will be uploaded here for anyone to access free-of-charge.

Sunday, October 12, 2014

Friday, October 10, 2014

Why You Need a Better YouTube Strategy

I was recently honored to speak with an elite group of L.A.'s best business managers about how YouTube drives a recording artist's recoupment of video accounts and earnings.

According to a recent Viacom study, 91% of 13-40 year olds "listen to the song/watch the video on YouTube prior to purchasing."

Yet, YouTube cannibalizes record sales and it and Vevo - through which UMG and SONY take an extra cut - pay controversially low royalty rates.

Thus, whether independent or major, your clients are best served by a very thoughtful YouTube business strategy.

Here are four points I consider when helping business managers develop a YouTube financial plan for music clients:

Cost - Fund production costs with brand integration, engage in budgeting, document approvals, make sure clients aren't subsidizing production
Collections - Consider re-records. Also, metadata tells licensees who to pay, so you want to get it right (see this Metadata style guide for tips).
Control - Don't let Vevo ads erode brand equity.
Compliance - For crowdfunded videos, we provide tax planning and verification of accredited investors for a 506 offering.
Claims - Potential audit findings include incorrect recoupment and/or cross-collateralization, incorrect costs, so-called "digital breakage," Vevo fees, publishing synch fees

Are you a business manager, attorney, personal manager or advisor?

Call me today at 424.248.8866 to influence these and other key factors of your clients' financial success.

Sunday, October 5, 2014

Wednesday, October 1, 2014

Screenplay Prices: Q&A With Dinah Perez, Esq.

Entertainment lawyer Dinah Perez, Esq. wrote “The Legal 411 for Screenwriters,” section of the Hollywood Screenwriters Directory, available here. In the Q&A below, Ms. Perez shares a bit of her vast expertise on the topic of screenplay purchase prices. Many additional insights about screenplay rights and dealmaking can be found in her truly informative contributions to the Hollywood Screenwriters Directory.

Cedar Boschan: What is a standard purchase price for a screenplay?

Dinah Perez: There is no such thing as a "standard" purchase price for a screenplay. WGA members cannot accept less than the sum prescribed in the WGA Schedule of Minimums, but can exceed the minimum, and non-WGA members can sell their screenplays for any price they are able to negotiate. Sale prices typically range between 1% and 3% of the cash production budget of the picture.

Boschan: What factors do producers consider when making an offer?

Perez: Producers consider the screenwriter's track record; whether there is a bidding war for your screenplay; whether the screenplay is based on a best-selling novel; whether it is about a salacious, interesting or well publicized person or event; the screenplay's genre; and, if known ahead of time, the picture's potential production budget.

Boschan: Can you share any negotiation tips to get the best price?

Perez: If the production budget is not known going into the negotiations, I suggest a purchase price based on a sliding scale, e.g., "for a picture not to exceed $15,000,000 dollars, the purchase price shall be 2 ½% of the cash budget of the picture, but in no event less than WGA low budget minimum and no more than $250,000. The purchase price will be increased by $10,000 for every $1 million increase in the picture's production above $15,000,000 not to exceed a total purchase price equal to $500,000." The attorney attempts to secure the highest ceiling possible while the producer tries to limit it.

Boschan: Technically, what is an “Option?”

Perez: You acquire the rights to a literary work by entering into an “Option/Purchase Agreement” whereby you have the exclusive option to buy said literary work for a determined period of time. The Option/Purchase Agreement has two components: the Option Agreement (“Option”) itself states how much time you have to buy the literary work, and the purchase agreement includes the sale price and rights to be granted. You purchase the literary work by exercising the Option and paying the purchase price prior to the Option’s expiration date. You do not actually purchase the literary work until the commencement of principal photography – when you know that the picture is being produced.

###

DINAH PEREZ graduated Loyola Law School and has been in the practice of entertainment law since 1996. She practices film, television, theater, music, new media, publishing, copyright, and trademark law. She enjoys practicing entertainment law because she has great respect for the arts and those who create, and relishes helping her clients attain their professional goals.

Ms. Perez has been published in Story Board Magazine, Release Print, Script Magazine, “The Screenwriters Guide to Agents and Managers,” and “The Hollywood Screenwriting Directory”, and “Hollywood Screenwriters Directory” (2014). She recently entered into a publishing agreement to co-write the “Hollywood Producers Directory” (2015). Ms. Perez has been quoted in Entertainment Weekly, Wired Magazine, Wired.Com, and featured in “Alone In A Room.”

Ms. Perez has participated in panels and/or spoken at the Black Hollywood Film Festival, the Latin Heat Film Festival, Women in Film, Cinewomen, Independent Feature Project West, American Film Market, the Inktip Pitch Summit, the Screenwriters World Conference, the Writers Store, and the Showbiz Store and Cafe.

She is a member of the Beverly Hills Bar Association (Entertainment Law Section, Executive Committee), the California State Bar, Film Independent, and NARIP (National Association of Record Industry Professionals). She was a founding board member of Cinewomen in Los Angeles, CA.

Auditrix, Inc.