The movie '2012' pretty much illustrates the disaster that may be looming for major music labels in the year 2013. You see, Congress gave creators of copyrighted material the right to terminate any copyright grant after 35 years when it amended the U.S. copyright law in 1976. The first-year holders of sound-recording copyrights can take advantage of these "termination rights" in 2013, which means that copyrights for recordings from 1978 could be the first ones taken back by artists and possibly put up for bid on an open market.
"We're going to see huge fights over this issue," says Moses & Singer partner Ross Charap, who represents songwriters, record labels and the licensing arm of the National Music Publishers Association. "Litigation is going to get bloody, and record labels are legitimately very nervous over copyright termination."
One man who may make them nervous is Lee Phillips, a Manatt, Phelps & Phillips partner whose clients include The Eagles, Journey and Barbra Streisand. Phillips says he and his firm colleagues have begun gathering information about old record contracts and copyright registrations. By the end of the year, he vows, "We'll be sending out termination notices." Source: 'Copyright Battle Comes Home, IP Law & Business,' Law.com
If you are wondering, as I was, why music copyright termination by such classic stars could wreak havoc on an industry always chasing the newest star, according to Law.com, classic albums are where the money's at. That venerable acts, such as those in Phillips' stable, could cause such a headache for the record industry may seem surprising, but it's actually quite logical.
After all, album sales are reeling. Market research company NPD Group reports that close to half of all U.S. teens did not buy a single CD last year, while consumers ages 36 to 50 drove what sales there were. Since the latter group tends to prefer time-tested artists, the major labels have shied away from signing and promoting new acts in favor of relying on already established performers. The prospect that these artists would, as a group, launch a wave of terminations -- and regain control over their lucrative catalogs -- is viewed by many within the industry as a legal "third rail." Source: Law.com
Of course, record companies are gearing up to go to court to fight the anticipated flood of termination notices. It won't be easy for artists to grab back the rights to their music. Precision will be key, and to take advantage of the copyright provision, artists had better get busy. The copyright provision states that songwriters, performers, producers, engineers -- and anyone else who helped create a song -- can send a notice for songs created between 1978 and 1984. The implications of this copyright termination provision and the impending battle is now referred to as the "Fight over Funkytown." Why?
That's where "Funkytown" comes in. Steve Greenberg, who wrote, performed and produced the 1980 disco hit under the name Lipps, Inc., recently sent a termination notice to Universal Music Group, the parent company of Greenberg's original label. Source: Law.com
What do you think?
