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Recently there has been a lot of debate over the issue of exclusive versus non-exclusive catalogs. As most of you know, our position at Red Arc Music Group is that our catalog is based on exclusivity. I wanted to elaborate as to how we arrived at that decision, talk about some of the pros & cons of each, and give some insight as to where the industry is headed.

First, a bit of history: From the early days of the publishing industry up until about 10 years ago, mostly all music catalogs & libraries were exclusive in nature. Much of it stemmed from the early days of music publishing where songwriters were actually signed to “songwriter agreements.” They became staff writers for the publishing company for the whatever length was the term of their agreement. Anything they wrote during that term was owned by the publishing company they were signed to. In those days, most of the recording artists sang music from outside songwriters. It was the publishing company’s job to pitch songs, usually in demo form, to artists who were or were about to go into the studio to cut an album. In essence, the publishing companies were song-pluggers. In most formats, that process has gone by the wayside as more & more artists either write their own material or cut tracks provided solely from their producers or “entourage,” country music being one of the sole formats still operating that traditional way. When music libraries came on the scene, they operated under the traditional publishing model. Not so much with songwriter agreements but acting like true publishing companies in that they own the copyrights and all the music was exclusive to them.

This takes us to about 10 years ago when the proliferation of the non-exclusive/re-title libraries began. Generally, how these companies work is that you give a piece of music over to them, they retitle it, and then they file a new copyright registration under the title as a derivative work of the original. Here begins problem number one. For a work to generate a new copyright as a derivative, it is supposed to substantially change from the original. That can be a new arrangement, using the main themes and creating a new cue, etc. Simply changing the name does not generate a new copyright as the fundamental work is not just close but exactly the same as the original copyright. Copyrights are supposed to be unique in nature as an individually valuable work. So now there’s 2 copyrights floating around for the exact same “individual” work. Uh oh. But wait, what if the same track is with 5 or 6 different non-exclusive catalogs. Well, the problem rises exponentially.

It’s a problem for all of the following reasons:

  • If there is a copyright infringement suit in the event someone plagiarizes the original track (think Vanilla Ice’s Ice Ice Baby and Queen’s Under Pressure). Who gets the right to sue Vanilla Ice? Is it Queen, the original copyright holder? Is it the company with the derivative copyright for non-exclusive #5, retitled as Lots Of Stress? Remember that the musical work itself is completely unchanged so each copyright holder could make a valid claim against Vanilla Ice. It works the other way around, too. Let’s say Ice Ice Baby is the one that was passed around to retitled catalogs. Is Queen suing Vanilla Ice in addition to non-exclusive company #7 who has the copyright for Cold Cold Honey? If the original copyright holder is found originally liable, are they on the hook to pay the damages levied against all the non-exclusive companies who filed derivative copyrights on that plagiarized work? Hijinks ensues.
  • Put yourselves in the shoes of a music supervisor. Actually, I’ll give you an example rooted in reality. A supervisor I know put out a music request to her contact list for a song that included the word doorbell in it for a particular placement use. She received 4 songs….er….scratch that. She received 1 song with 4 different titles from 4 different companies. That put her in the predicament of having to decide which company got the license. She used the questionable method of picking the company that sent it to her first. She then had to send the 3 other companies copies of their competitors e-mails with timestamps to prove that the company getting the license was the first one in. PITA during tight timeframes. Not to mention, what if budget-wise, she wanted to go with the company that has the lowest license rates. But, wait, if one of the other companies knew about the lower rate then maybe they would lower their own rate. Ugh. All of this goes to the well known fact now that the top music supervisors across TV & film are now refusing to license any music that has ever been retitled or show up in non-exclusive catalogs. That instantly takes out most all of the high dollar budget films and TV series. That’s not a good business move for working songwriters, composers and artists. If they want to keep trying to reap the regional late-night placements, more power to them as launching pad shows like Grey’s Anatomy are now off the table.
  • Both of the above, among other reasons, are why a major broadcaster who shall rename nameless but rhymes with Gisney put out a mandate last fall. The mandate to their people in the various music departments, including independent contractors like music supervisors, that no show on any of their networks will be allowed to license retitled music. Uh oh again. Ballpark, that’s roughly 60 some-odd shows across 20 networks. That’s ABC, ABC Family, Lifetime, A&E, Disney Channel, the entire ESPN family, and so on. That’s a lot of mighty high hanging fruit to leave on your business tree.
  • All of this devalues you as the artist. You are now relegated to just hitting singles rather than going for home runs. And think about how many bunt singles you’ll have to hit to equal the lost home run of a Grey’s placement. And that’s just financially, never mind the lost promotion value. And it’s even worse for artists and songwriters who rely in any form on retail sales. Let’s say one of your retitle companies gets a placement for you on Gossip Girl. At the end of the show, they show a graphic (called a chiron) saying the audience heard a song called “Running With the Wind” by you. Awesome! Here comes the huge download sales buy bump! Ummmm…..one little problem. That’s the retitled song. The original song on iTunes off of your album in the iTunes Store is called “Faster Motion.” Say bye-bye to that sales bump.
  • From a business standpoint, it also devalues your work. If your music is only available from one company, that company can set the market rate for licensing one of your songs. If multiple retitle companies represent the same song, a bidding war can ensue for a particular placement. Only problem is that you, as the writer, is on the losing end as the win goes to the lowest bidder. Let’s say that a production is in love with your song Just The Facts for its new courtroom drama feature. If your music was exclusive to a company and that company says that the license will cost X amount, then the production company will have to pay X amount. On the other hand, if the same song with different titles is available to the production from multiple companies, they can keep underbidding each other until achieving the placement. Who loses? You do. Once again, you are devalued as an artist.
  • Technology is rapidly advancing. Both ASCAP & BMI are moving in the direction of using sonic fingerprinting to survey broadcasters. Their software will “listen” to a network all day and identify through sound what registered works are being played. I think you can see where I’m going with this. You’ve got 6 registered titles for the same song. When the software hears your song, who do they award the performance royalty to? They’ve got 6 hits for the sonic fingerprint. Now comes the red tape and human sorting. Someone has to go pull the actual cue sheet for the show to find the title used, and that’s not counting if one of the other companies with an alternate title doesn’t make a claim that it was their “version” (though they are identical) that was used. All of which means more delays than the PRO’s already slow 6-9 month payment lag. Loser? The writer.

I can certainly sympathize with writers. On the surface, it seems like win-win. You feel like you haven’t given up ownership, though technically you have because now your “individually unique” copyright has been diluted with legally questionable derivatives. You feel like now there’s multiple companies pushing your same catalog of music so now there’s more chances at placements, and yet as noted above that the multiple representation issue is a turn-off to most of the major music supervisors not to mention that little media company with headquarters in Burbank. Add that together with retail sales confusion, conflicts with the PRO’s survey software, lower market rates for licensing your material, etc., and it doesn’t seem so win-win anymore.

I know proponents of non-exclusve/retitling will say that I’m only writing this to make a case for the Red Arc business model. That’s a fair position and they are entitled to it. And yet, up until 10 years ago, the entire music publishing world operated with exclusivity. Only recently (in the grand publishing timeline) has this new model cropped up. With the industry finally digesting it and now setting its course for the future, the question to answer is which ship are you going to be on?

– Marc

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