Music labels, record companies, publishers, and individual artists need to be thinking about how to protect their rights when it comes to livestream and livestream services. When the pandemic started, artists immediately had to cancel shows and public events. As a means to keep the connection with their audiences, many artists went online to provide livestream shows and access to viewers from their home.
In fact, the livestream industry grew a staggering 45% between March and April 2020. On Twitch, for example, hours watched of “Music and Performing Arts” went from 92,000 hours on March 8 to 574,000 hours by March 22—just two weeks later.
While livestream is a great way to connect, it presents some unique issues when it comes to artists’ rights and royalties for record companies and publishers. But before addressing these issues, a review of the types of rights that affect music professionals is warranted.
An Overview of Music Professionals’ Rights
Let’s start fresh and remind ourselves a few terms that specifically apply to artists and other music professionals, including labels and music publishers.
Music Copyrights
Music copyrights are probably the biggest legal term that affects music professionals. A copyright legally protects songs, lyrics, and music compositions from use or publication by anyone that does not have the right to reproduce that music. Anyone that holds the copyright can do things like:
- Reproduce the work
- Distribute copies of the song or CD
- Perform the music
- Create derivative work
Unless permission is provided from the copyright holder, only the copyright holder can do any of these things with music.
Music Licensing
A music license allows someone to use the music for a specific purpose. While you can get broad licenses, it is more likely that the license is paired down for a particular use, often to save on costs. Some of the most common music licenses that may come into play with livestreaming include:
- Synchronization License (Sync License): Refers to using music paired with another form of visual media.
- Master License: This license allows someone to use a pre-recorded version of the song, but they cannot re-record a song as they would be allowed to do in a sync license.
- Public Performance: This license allows someone else to perform a song, which includes any form of broadcasting.
Music Royalties
Music royalties are generally derived from a form of music publishing, such as playing the song at an event. The royalty is paid to the owner of the copyright for using the song, either generally or each time the song is used. The same general rule applies to anyone that performs the song who is not a copyright holder, as well.
One of the major ways that artists, labels, and publishers get paid is through royalties. That means that when someone plays a song but does not provide fees to the right person, they are essentially stealing the use of the song in violation of federal copyright law.
Record Labels and Music Publishing
The role of the record label is to manufacture and distribute the artist’s music. The agreement between the record label or music publisher is generally to use the copyright for the song to accomplish certain goals, such as creating CDs or, more realistically, ensuring that the music is sold on specific online platforms.
Livestream: Creating Untold Problems
When livestream usage skyrocketed in March and April, the industry simply wasn’t ready. Music rights management was not at the forefront of anyone’s mind when livestream started using music at such large numbers.
When a song gets used here or there, the question of copyright might not be raised. But if you pair an untold number of usages and views with the fact that artists and record labels are not getting funds through more traditional means—like concerts and in-person music promotion—it becomes a huge problem.
Large streaming platforms, like Twitch, are apparently not paying licensing fees as they should when users post music with no copyright rights. As of June 11, 2020, however, Twitch announced that it would be scanning and deleting user clips that contain copyrighted music. While the streamers won’t be penalized, it obviously stifles the widespread use and access to music (although Amazon’s CEO was more than evasive on copyright management on Twitch during the US Congress audience).
While Twitch’s response may seem like a good start, it doesn’t fully address the issue. We simply do not have all of the tools to deal with music publishing rights, particularly in the context of livestream sharing. Livestream touches on several types of licenses, including performance, sync, and masters. On paper, that means that more than once license may be required for a livestream performance.
Managing Royalties with Royalty Management Solution
Royalties are still a huge part of any music professionals’ work, and with new ways to exploit music, managing royalties is now more important than ever. This is why we are working on Royalties Manager, currently in beta testing.
With Royalty Management, record companies and publishers can manage everything in one workspace, follow their chain of rights, and directly link their catalog to the contracts, and royalty splits on our SaaS platform. But most importantly, all accounting and follow up will be managed in one place, optimizing the whole process and considerably reducing the risk for errors. Interested in giving it a test drive for your business?
