# Royalty problem/question....



## Jimbo 88 (Apr 16, 2012)

Hey all,

I recently scored a one hour special for the DIY Network. I signed a typical composer agreement and filled out the music cue sheet as usual. The show has aired multiple times arleady. Today I get an email asking to re-sign the composer agreement, the productions company says there is a liitle change in Section 5. Well the little change says this:

_""Furthermore, Composer shall receive no income and/or royalties whatsoever (e.g., publisher's share, writer's share, soundtrack album, synchronization, mechanical) from any usage of the Music and/or Masters as embodied in the Program. "_

So does this mean what i think it does? No royalties at all? 

Can anyone give me some advise, 'cause I ain't signing nothing that sounds and looks like this. Am i miss interpreting this? Will i still get my ASCAP Royalties from when the show aires?

Thanks!


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## José Herring (Apr 16, 2012)

Don't sign it. That's ridiculous bordering on illegal. They basically are trying to steal your music. If the show is already airing the you have no incentive to sign an agreement like that. Wow, that's the first time I've ever even heard of somebody trying to amend the contract after the show has aired. Just say no and stick to the original agreement.


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## gsilbers (Apr 16, 2012)

yep. you can sue if you dont recieve. breech of contract if you already signed an earlier agreement. 
some producer asistant fuked up. not your problem. you agreed to one thing. and signed a contract. 

with that said, its hard to deal with things like this cause you dont wanna break that relashionship. 
maybe let them know that royalties is what composers live for and the upfront fee you agreed upon (if u did ) was ok by you as long as u knew youd get royalties in the back end. 
let them know your equipment, libraries and expeses etc. so they emphazise w you. 

so with big regret let them know that you cannot signed a revision with that change. 
and would like to help out in any other way. 
or something non confrontational like that. 
cause you already won. they dont pay, you use. easy. 
but you still wana keep that relashionship .


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## reddognoyz (Apr 16, 2012)

ABSOLUTELY DO NOT SIGN IT.


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## José Herring (Apr 16, 2012)

There's no real relationship there. If they come with future projects, they'll have him sign an agreement that gives away all his rights. Not sure what DIY is paying upfront but I doubt its much, so he'll basically be working for nothing if they contact him in the future. 

Of course be nice about it, but he shouldn't expect that there's any kind of future relationship with a producer that's willing to pull this stunt. So he needs to ask himself, if the relationship worth it and if the credit is worth it. As I see it both answers to that question are no.


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## Blackster (Apr 16, 2012)

I totally agree, do not sign!

Besides, I really would take into account talking to somebody from that company about that. If that is the usual way they do business .... I don't know ... gives me a weird feeling.


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## reddognoyz (Apr 16, 2012)

I've heard of this sort of thing before. It's just straight up trying to steal from you. All companies try to maximize their income of course, but the writers share belongs to you.


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## Daryl (Apr 16, 2012)

There are various responses:

1) Tell the Production Company to f*ck off.
2) Ignore the email and don't reply.
3) Tell them that you were happy with the agreement that you already signed and those were the terms that you accepted the employment on, so you won't be signing any amendments.

FWIW in the UK as a PRS member, I wouldn't be allowed to sign any contract with that clause anyway. Does your PRO actually allow it?

As to fees, I assume that you've already been paid and this extra clause is because the Production company wants some sort of secondary usage to be free. If they go ahead without your consent, you will have to make the decision as to whether or not it is financially worth your while to fight it in court.

However, the Broadcaster will pay the Royalties for the current airings anyway, assuming that your cues are registered. You should check this out, and if not, register them immediately.

D


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## Jimbo 88 (Apr 16, 2012)

Thanks all for the responses...

Here is the kicker, I have worked with the production company for years and it has been aLLL Good! 

So the production company comes to me and says we are really slow and we have this small budget..$800. Normally I get $3,000. I send in my $800 invoice and they send me a check for $1000 and say " we found more money and we know you hired a guitar player". GREAT bunch of producers.

The call me back and say the DIY Network is super slow with paperwork check out the new agreement. They really don't even know how royalties work. 

SO COMPOSERS BEWARE OF THE DIY Network..


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## José Herring (Apr 16, 2012)

It may be a case where they think that they have to pay royalties. Explain to them that royaltees for righters and publishers shares don't come out of their pocket. The explain that if there's a soundtrack agreement that you'll negotiate at that time a separate agreement for the soundtrack.

best,

Jose


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## Mike Greene (Apr 16, 2012)

My guess is that DIY has a no PRO's policy. They wouldn't be the first cable network to do that. (E! and ESPN don't pay ASCAP or BMI royalties.) So I'm guessing your friends (the production company) gave you their usual contract that *does* provide for PRO royalties, then DIY finally saw the contract months later and said "whoooa!"

If my theory is true (call ASCAP or BMI and they can tell you for sure since they know which networks are problematic,) then you're in a tricky situation, because DIY isn't going to all of a sudden sign on to ASCAP and BMI just because you won't sign this contract. And you refusing to sign the contract may be getting your friends (the production company) in trouble, because they were probably supposed to have given you a different contract up front.

Here's what I would do: First, don't sign the contract as is. Never give up royalties, even if they're tiny, just because that's like crossing a composers' picket line. It's a matter of principle.

Since DIY doesn't pay ASCAP royalties (again, you need to check if my theory is even true,) then you're not going to get your royalties that way. But you *could* have them pay you the same amounts _directly._ In other words, if ASCAP would have paid 50 cents a minute (per airing,) then have DIY cut you a check every quarter for that same amount. DIY won't like the extra paperwork, of course, but there's *nothing* unusual or unfair on your part about a composer refusing to give up his PRO royalties. So don't let anyone guilt you into bending over and pulling down your own pants.

You're in the driver's seat with this, by the way. Shows have already aired, so you can sue for lost royalties if you wanted. (Not that you would, of course, but they know that you have that power now.) Just present yourself as a guy who wants to work something out, but also a guy who won't sell out his morals.


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## Andrew Aversa (Apr 16, 2012)

Afaik DIY is part of the Scripps parent company. None of the networks pay PRO royalties.


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## studioj (Apr 16, 2012)

Right, all that signing this will do is protect them from getting sued by you. You won't get your royalties if you don't sign. And its likely not worth it to sue. A better clause might be:

'It is understood and agreed that these musical works will be licensed by ASCAP/BMI/SESAC and the composers and Publishers shall be entitled to collect their respective shares of performance royalties from the Performing Rights Society with which they are affiliated (ASCAP/BMI/SESAC) *when the respective broadcasters or other carriers are ASCAP/BMI/SESAC licensors for the subject media format'*

That way if the music does end up getting used on a network at some point that is licensed by ascap, etc then the language is there for you to get paid.


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## gsilbers (Apr 16, 2012)

Jimbo 88 @ Mon Apr 16 said:


> Thanks all for the responses...
> 
> Here is the kicker, I have worked with the production company for years and it has been aLLL Good!
> 
> ...



so indeed you wanna keep that relashonship going. 

offer up to get more money upfront since there is no royalties. 

offer up to license your music to them and only to that movie/show and use that music in a music library. still, with more money upfront. 

offer to sign the new contract if you are guaranteed 4 or more shows/movies within this year. 

seems you are not getting royalties either way. and the copmany who gave the contract is not DIY (right?). so its basicallty the company you deal with messed up and made a mistake and they didnt know about royalties with this channel. 

i woudnt get up in arms like some are here in this thread. you wanna work with poeple not fight them. try to help out and get a good deal since you have the upper hand here.


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## midphase (Apr 16, 2012)

Can someone please explain to me how E!, DIY and other broadcasters are getting away with not dealing with ASCAP/BMI?

I thought this was a settled legal matter, I was under the impression that composer's right to collect performance royalties was not a matter of principle but an explicit matter of law?


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## Brobdingnagian (Apr 16, 2012)

zircon_st @ Mon Apr 16 said:


> Afaik DIY is part of the Scripps parent company. None of the networks pay PRO royalties.



Yes it is a Scripps network. As is Travel Channel, Food Network, HGTV...... 

FYI - scroll down to the middle of the following page and read about "The Buffalo Hearings." This is why Scripps doesn't pay out PRO money. Instead they do a direct license, if you are smart about it. Mike's post above is SPOT ON.

http://www.televisionmusic.com/Joomla_1.5.15/index.php?option=com_content&view=article&id=4 (http://www.televisionmusic.com/Joomla_1 ... ticle&amp;id=4)

FWIW, I now pass on any Scripps series that comes my way, unless I can simply license music to them on a yearly fee basis. Best of luck. Remember though, a lot of your producers and editors working on this stuff go on to other shows and situations that will pay PRO monies.

-B


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## Daryl (Apr 16, 2012)

midphase @ Mon Apr 16 said:


> Can someone please explain to me how E!, DIY and other broadcasters are getting away with not dealing with ASCAP/BMI?
> 
> I thought this was a settled legal matter, I was under the impression that composer's right to collect performance royalties was not a matter of principle but an explicit matter of law?


Maybe the music that is on the programmes on these channels uses non PRO composers.

However, I do know that Sex and the City aired on one such channel, and they had to come to a special deal to break their usual rules and pay Royalties, or they wouldn't be allowed to air the shows.

D


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## Mike Greene (Apr 16, 2012)

midphase @ Mon Apr 16 said:


> Can someone please explain to me how E!, DIY and other broadcasters are getting away with not dealing with ASCAP/BMI?


The "Work for Hire" clause in a contract takes away any rights as a composer that we might have. With that clause, the employer is now "author" of any music we write (under this contract.) As author, the employer can choose to surrender *his* right to collect performance royalties.

That's why we have additional clauses in our contracts that give us some of those rights back. (Our name registered as composer, right to collect ASCAP royalties, etc.) Without the additional clause(s), we would be just like any other hired hand and entitled to nothing beyond the payments outlined in the contract.


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## JohnG (Apr 16, 2012)

gsilbers @ 16th April 2012 said:


> i woudnt get up in arms like some are here in this thread. you wanna work with poeple not fight them. try to help out and get a good deal since you have the upper hand here.



I normally agree with a conciliatory, lets-just-get-along approach, but not in this instance. The minimum conditions to work, especially for cheap, are credit, cash, and performance royalties.

I would politely decline to sign a worse deal for myself. They wouldn't; why should you?


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## Daryl (Apr 16, 2012)

Mike Greene @ Mon Apr 16 said:


> midphase @ Mon Apr 16 said:
> 
> 
> > Can someone please explain to me how E!, DIY and other broadcasters are getting away with not dealing with ASCAP/BMI?
> ...


Luckily we don't have those in the UK.  

D


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## RiffWraith (Apr 16, 2012)

midphase @ Tue Apr 17 said:


> Can someone please explain to me how E!, DIY and other broadcasters are getting away with not dealing with ASCAP/BMI?



Because Scripps and/or the Scripps networks do not have contracts with ASCAP/BMI. If there is no contract, then ASCAP/BMI can not collect royalties from them.

In regards to the op:



> ""Furthermore, Composer shall receive no income and/or royalties whatsoever (e.g., publisher's share, writer's share, soundtrack album, synchronization, mechanical) from any usage of the Music and/or Masters as embodied in the Program. "
> 
> So does this mean what i think it does? No royalties at all?



That's right. You will receive your writer's fee,a nd that's all. If the music you wrote for them is not a WFH and is not on an exclusive basis, you can take that music elsewhere, and have it earn more money for you. If it is a WFH or is on an exclusive basis, all you will ever see is the writer's fee.

Now - if you have already signed a contract that specifically says you will receive royalties, then you can in fact sue if you so choose. If you signed a contract that did not stipulate royalties either way, then you can not sue, b/c again - the network you are dealing with does not pay royalites.

Cheers.


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## midphase (Apr 16, 2012)

RiffWraith @ Mon Apr 16 said:


> midphase @ Tue Apr 17 said:
> 
> 
> > Can someone please explain to me how E!, DIY and other broadcasters are getting away with not dealing with ASCAP/BMI?
> ...



I was under the impression that ASCAP/BMI could force a compulsory contract on anyone utilizing music in a public performance manner (such as broadcasters, but also public venues like bars and restaurants whom in the past have been sued by ASCAP and BMI for not paying).

If a broadcaster is free to simply ignore ASCAP/BMI...why wouldn't all broadcasters simply follow on the same path? One could argue that composers who are high up could threaten to push their shows from airing on the networks...but in that case any network could work out a private deal with the composers as it's been suggested by Mike Greene.

Back in the 90's, PAX cable tried to take writer's share royalties away from composers, but they were still paying ASCAP and BMI fees. That effort was exclusively an attempt at rerouting some of the license money back into their own pockets. 

But the idea that any broadcaster can simply refuse to pay ASCAP/BMI anything seems strange to me, and certainly one which would be subject to lawsuits. 

Why is this not being challenged in court? If DYI, HGTV, Food Network etc can get away from paying millions yearly to PRO's, why wouldn't NBC, Viacom, HBO, etc. not want to follow suit? They would have absolutely nothing to lose and everything to gain.

I swear each day that goes by, this business is becoming less and less attractive for composers.


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## Daryl (Apr 16, 2012)

midphase @ Tue Apr 17 said:


> Why is this not being challenged in court? If DYI, HGTV, Food Network etc can get away from paying millions yearly to PRO's, why wouldn't NBC, Viacom, HBO, etc. not want to follow suit? They would have absolutely nothing to lose and everything to gain.
> 
> I swear each day that goes by, this business is becoming less and less attractive for composers.


As I suggested, if the composer is not a member of a PRO, it is none of their business.

If the big channels weren't allowed to air programmes that used music written by PRO members, the standard would be pretty poor. Much as it is on the cr*ppy channels. :wink: 

D


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## Mike Greene (Apr 16, 2012)

midphase @ Mon Apr 16 said:


> I was under the impression that ASCAP/BMI could force a compulsory contract on anyone utilizing music in a public performance manner (such as broadcasters, but also public venues like bars and restaurants whom in the past have been sued by ASCAP and BMI for not paying).


The short answer is that the laws just say that songwriters are entitled to be paid for public performances. Songwriters aren't forced to accept the money. It's the same idea as the statutory royalty rate for songwriting for records. (The "mechanical" royalty.) Right now, it's set by law at around 9 cents, but almost all songwriters (are forced to) sign a deal taking a lower rate. It sucks, but it's legal.

The long answer is that ASCAP and BMI are just collectives so that radio stations and concert halls and TV stations don't have to deal with a zillion individual songwriters. The accounting would be a nightmare. So when ABC makes their deal with ASCAP, they just figure roughly what percentage of the music that gets played on their network will be written by ASCAP writers, then pay ASCAP accordingly. ASCAP then handles the accounting (cue sheets, etc.) and pays us.

Nothing in this process, though, requires that ASCAP or BMI be a composer's representative. SESAC, for instance, is much smaller, yet they deal mainly with composers with big enough credits that they can work out separate deals. So when SESAC goes to ABC, they can say, "Okay, we've got composer X who does 93 hours of primetime a year, so we want X number of dollars." Since ABC is paying SESAC for 93 primetime hours, they can subtract that piece of the pie for what they pay to ASCAP and BMI, since ASCAP and BMI have nothing to do with those hours.

Direct licensing is kinda sorta the same thing, except instead of an upstart PRO (SESAC) making a separate deal, it's the production company of a show making a separate deal. Either way, when a show is direct licensed, the network gets to subtract those hours from the pie as well. Composers belonging to ASCAP or BMI can still work on shows that are direct licensed, but they will get paid for those shows by whatever company handles the direct licensing money (RMI, for instance) instead of ASCAP.

I've done a couple of these direct license gigs myself. It's a crapshoot whether you'll make more or less than with ASCAP. With one show, I made way more. With another, I think I'm making less. You might expect that you would always make less, since the production company wants to make the show attractive (cheap) to the TV stations. But remember that the production company gets the publisher's share, so it can turn out to be a pretty cool deal if the production company has leverage. (Oprah was that way.)

Anyway, if a network can get 100% of its hours to be music that is *not* ASCAP or BMI, then they're out of the picture completely. So long as all the composers have agreed to alternate (or no) performance royalty compensation, they're covered. That's what ESPN and E! (and apparently DIY) have done.


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## midphase (Apr 16, 2012)

Mike Greene @ Mon Apr 16 said:


> if a network can get 100% of its hours to be music that is *not* ASCAP or BMI, then they're out of the picture completely. So long as all the composers have agreed to alternate (or no) performance royalty compensation, they're covered. That's what ESPN and E! (and apparently DIY) have done.



OK...now we're getting somewhere. So you're telling me that in all likelihood, the composers who provide music for Food Network or HGTV shows have renounced their royalties as the OP contract would seem to indicate (I assume the majority of them have not negotiated a direct licensing deal with RMI since I get the sense most of them are not presented with such an option)? 

So, what is keeping the rest of the networks from following suit? I can't imagine any of them is particularly thrilled to be shelling out millions of dollars each year to PRO's. By dealing directly with someone like RMI for the bigger names, and nobody with all the...well...nobodys, they could stand to increase their profits considerably.


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## RiffWraith (Apr 16, 2012)

midphase @ Tue Apr 17 said:


> So, what is keeping the rest of the networks from following suit?



Yeah - this worries me too. Of course they have to keep paying royalties for the duration of the contract, but when the contract expires, what's to keep them from saying, "ok, no more royalties"?


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## Mike Greene (Apr 16, 2012)

midphase @ Mon Apr 16 said:


> So you're telling me that in all likelihood, the composers who provide music for Food Network or HGTV shows have renounced their royalties as the OP contract would seem to indicate (I assume the majority of them have not negotiated a direct licensing deal with RMI since I get the sense most of them are not presented with such an option)?
> 
> So, what is keeping the rest of the networks from following suit? I can't imagine any of them is particularly thrilled to be shelling out millions of dollars each year to PRO's. By dealing directly with someone like RMI for the bigger names, and nobody with all the...well...nobodys, they could stand to increase their profits considerably.


I don't know for sure with Food Network or HGTV, but with ESPN and E!, yeah, the composers renounce their royalties.

I think the major networks haven't followed suit because only a certain calibre of composer would sign a deal where they completely surrender their royalties. Sure, saving a few bucks would be nice, but then they wouldn't be able to hire real guys with decent credits. Crap background music might be okay for _"Honey, Who Painted the House?"_ but not okay for a network primetime show. The small savings wouldn't be worth it.

Plus, if they make a composer sign away his royalties, then they're going to have to pay more upfront, so they're not really saving money in the long run. It's more or less a zero sum game.

MRI (I got the letters backwards in my earlier post) is a more real danger in the big leagues, but a lot of composers won't sign direct license deals either, because then they're at the mercy of whatever they negotiate with the network or TV stations. My lawyer urged me not to sign the one I did with Oprah, for instance. I took a chance and it worked out well with Oprah. But I'm getting burned on a couple newer shows, so I don't think I'll do it again.


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## Jimbo 88 (Apr 16, 2012)

Yep, it turns out you guys are right. DIY part of the Scripps Network. They do not pay royalties. So live and learn...

But when they decide to turn the show into a series (it was highly rated for them). i won't be available to score any more shows.

I really took a lot of time to match the music with the show. Wait to they see what happens when they have to use library music. It will cost them twice as much in man hours and still will not be as good.

They are going to wish they where paying royalties.....

Good Luck DIY ...later!!!


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## Brobdingnagian (Apr 16, 2012)

These are all valid points and worthy of discussion. It does keep me constantly thinking and (re)evaluating things. Our Public Performance Rights and IP are and will constantly challenged in the coming years - even moreso than they are now. One can only hope that the PRO's will have enough clout and lobbying power to solidly represent us.


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## rgames (Apr 16, 2012)

midphase @ Mon Apr 16 said:


> So, what is keeping the rest of the networks from following suit?



Here's my quasi-outsider view:

It's like the union: in theory, they have the best product (right?). Plus, as Mike pointed out, the PRO handles all the transactions, so the network pays a blanket fee, uses whatever they want, and the PRO takes care of the bookkeeping.

I don't think there's any legal requirement anywhere to use music from one of the PRO's - I'm with ASCAP and I can do whatever I want with my music - if that means licensing it directly to DIY Network or whomever then I have every right to do that. Likewise, DIY Network has every right to use music from whomever they choose. They don't have to pay license fees to a PRO.

Again, it's a lot like the union. PRO's are an option, not a requirement. Both would have you believe otherwise, and both are losing power in that position.

In my opinion, the idea behind the AFM "Yellow Dog" letter applies in this situation, as well: if you are a member of a PRO, you cannot be denied the opportunity to work a job. i.e. it is illegal for a production to require non-PRO composers. They don't have to pay the PRO license fee, but they can't deny you an opportunity simply because you're with a PRO. Again, it's an option, not a requirement.

In the end it doesn't matter: if there's no back end in a deal, you get more up front. Very simple. I realize my opinion on this subject has been unpopular in previous discussions but the writing is on the wall, fellas! It's neither good nor bad - just a different business model.

rgames


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## midphase (Apr 16, 2012)

It seems to me that networks that refuse to pay our PRO royalties are, for all intents and purposes, shifting the financial burden to the backs of the production companies.

Up until now, a production company wishing to utilize music on a TV show would find composers willing to get paid a lower fee because their "real fee" was in essence being amortized by the future PRO's money that they would be collecting. Hence a composer would make do with very little up front, sometimes nothing; knowing that about a year down the line they could count on future monies.

However, if PRO royalties are no longer part of the equation, that means that a professional composer needs to charge considerably more money up front...which needs to come out of the production company's pocket. Although it's possible that at first said production company might be able to find alternative composers willing to work for little money up front and no PRO checks, such operation is not sustainable as nobody can realistically make any living on a few hundred dollars.

Turning to music libraries doesn't compute either...music libraries make money through both licensing AND PRO's. If the latter is removed, then the licensing fees would need to increase to make it worth the time for the music library.

This is a complex situation and I get the feeling that this is just the beginning. All that it takes is an NBC/Universal or a Viacom to jump on board that bandwagon and the whole system would be turned on its head.

Regarding Mike's point that top shows would not be cool with this new system, this could be eased by offering direct licensing deals with the composers of the bigger shows (there really aren't too many of them). I don't think it's a zero sum game if you look at it that way.

My guess is that behind closed doors, these options are being discussed in a quite real manner...not sure what exactly it'll lead do, but I'm pretty sure we won't like it.


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## Brobdingnagian (Apr 16, 2012)

midphase @ Mon Apr 16 said:


> This is a complex situation and I get the feeling that this is just the beginning. All that it takes is an NBC/Universal or a Viacom to jump on board that bandwagon and the whole system would be turned on its head.
> 
> My guess is that behind closed doors, these options are being discussed in a quite real manner...not sure what exactly it'll lead do, but I'm pretty sure we won't like it.



Agreed 100%. I've always been a half full person, albeit still a curmudgeon. In my most optimistic view it is very much a time of gathering ye rosebuds whilst ye may.... The days of the consistently solid PRO quarterly statements most likely will not go on forever the way they have been going...ESPECIALLY the way things have been going in the business as of late....forgive my candor.

-B


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## MichaelL (Apr 17, 2012)

Going back to practicing law is sounding more attractive all the time. :(


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## Gusfmm (Apr 17, 2012)

Great thread for me a non-industry person. If I understood the workflow correctly, it all seems that the one party that really screwed up was the production company not having had that contract signed timely before the product was delivered. Jimbo - you didn't get a fully executed contract before hand, did you? Or maybe this is not always customary in the industry?


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## Jimbo 88 (Apr 17, 2012)

I did recieve and signed a very normal contract in the beginging. So I could stump my feet and cause all kind of trouble and I would win....probably get an extra $100. But I would lose a valuable client.

Nope, just gonna refuse any work for them in the future. let them deal with music libraries.


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## andersmaah (Apr 18, 2012)

Usually don´t post here, but read this forum from time to time. Since have studied the U.S. (quite unique) direct licensing model to some extent in the past, I found this case quite interesting. It is the copyright owner of the music that has to give a direct license to the broadcaster. That´s probably why this is quite a sticky issue, because at the moment, the network in question has aired something that they (seemingly, if the composer owns the copyright, i.e. no publisher in between) don´t have a license for (i.e. the performance license). In other words, at the moment they are open to be fined by the composer´s PRO because of that. Depending how the contracts have been written between the parties, in case the network would be fined by the PRO, the network may or may not try to sue or force a reimbursment from the production company. Someone is trying the fix this retroactively.


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