Copyright and Business Notes

Copyright is essentially an economic right

Who gets what in the creative industries?

Business to business relationships

1.3

Some international organisations have defined the term Cultural and creative industries:

UNESCO
- cultural, artistic and heritage related nature
- CCI are growing steadily

WORLD ECONOMICS FORUM

- One of the most rapidly growing sectors globally

UNCTAD

OECD
- These activities use creative skills. They add value by applying knowledge and often depend on
intellectual property
- CCIs have grown faster than the economy as a whole, making them attractive to policy makers as
drivers of sustainable economic growth and employment.

EY
- Has global map of cultural and creative industries. https://www.cisac.org/CISAC-
University/Library/Studies-Guides/Cultural-Times-The-First-Global-Map-of-Cultural-and-Creative-
Industries

Within CCI sectors, creators get economic copmensation mainly in one of two ways:
- Royalties derived from commercial activities that offer their copyrighted work to the public
- AS employees or service providers who get a flat fee paid by an employer or contratcor

By the end of the course we will have a clear idea of who gets what in the business of the creative
industries

1.4

We will take a first look at CCI sectors.

In the above Cultural times study the listed the following CCI sectors:
Advertising, Architecture, Books, Gaming, Music, Movie, Newspapers and magazines,
Performing Arts, Radio, Tv, Visual Arts
Copyright – understood as the exclusive right one has in relation to a specific artistic work –
intervene in these “B2B” (business to business) relationships.

1.6

Art as Industry Video

- 1429 – Printing press invented by Gutenberg. birth of creative industry

- 1557, in england a new royal charter granted a new system of ownership to the Stationer’s
Company. Members had to register the acquisition of a text to give them exlusive righ to reprodice
copies. This was the origin of copyright.

- 1710 queen ann issues copyright act to promote competition, fight piracy, improve printing and
publishing. After a certain amount of time the knowledge comes back into the public domain

-1777 , boumarcher leads a strike forcing theatre owners to pay writers a proportion of the box
office in take. This promoted the foundation of the first authors organisation.

-1790. US established copyright as privilege of exclusivity. Europe harmonised the idea that there
was an inalienable link connecting authors to their works-

- 1886 the Berne Convention is signed. This is an international treaty for the protection of liteary
and artistic works. Included photography and cinematography

- 1912 birth of film industry. By mid 1940s hundreds of films being made. Copywight owned by
producers.

-1950s music recording industry becomes popular. Copyrights owned by producers.

- 1960s invention of the transistor radio. Broadcasters had exclusive rights to the sognals they
transmitted and banned retransmission by third parties.

- 1960s Tv broadcasting become popular. The boom of the film, music and broadcasting industries
lead to the Rome Convention. This agreement extended copyright protection to perfromers, sound
recording producers and broadcasters.

-1990s digital technology meant software rights added to the Berne convention.

- 1990s the world trade organisation is formed. A new set of international agreements were
developed for the trade related aspects of intellectual property rights.

-21st Century.

From comment section:

“I still think copyright laws are quite limited and unprotected to many different artists and
countries. For instance depending on mass media production vs micro media marketing, there are
many artists in the west who claim works of art that has not been mentioned or well known, many
copyright infringement issues that are ignored because no one holds an investigation to the original
copyright of an artist who may not be literate or living in western nations but have provided an
outstanding intellectual property to many great creative industries and individuals who are known
today “

A comment from the lead Educator: “You may be right, but you can't forget that one of the basic
principles of the international legal protection system is the automatic protection. The author
declares his/her authorship when publishing the work for the first time. This is a statement that it is
assumed to be true, unless someone can prove the contrary. This is to say that to claim rights on an
artistic work protected by copyright, it is necessary that the author gives it to the knowledge of the
public under his/her name as the original creator. “

1.7 – Economics of copyright

What does Economics mean? We are interested in giving meaning to the word “economics” with
the purpose of analysing certain business based on economic thought.

Production and distribution of goods and wealth accumulation is the object of economics as a field
of study. Copyright impacts the production and distribution of creative goods, as well as the way
business players share the results (the profits).

There is an economics of copyright.

“ the economics of copyright explore the quirks and idiosyncrasies of how the copyright and
creative industries vary from the traditional economic theory and how the economics plays out in
the real world “

We apply economic thought to understand the role of copyright in the structure and distribution of
reative industries goods and services, in the wealth produced by these industries and in how it is
shared between business players.

1.8 – Copyright and CCI sectors

two subsets
1.Creators and contractors. (B2B)
2. Buyers and vendors (B2C)

Contractors in this course are People or companies that have a direct relationship with creators.
Contractors
1.buy creators copyrights,
2. or publish and promote their works
3.or hire their creative services
4.or employ creators

Works refer to works and productions.

Vendors offer and make available to buyers products containing artistic works.
Movies
B2B:
Creators: Director, writer, Composer
Contractors : Producer
Copyright Owner: Producer

B2C
Vendors: Broadcasters, Distributors, Digital Services
Buyers: public, tv audiences, streaming service users

Producers license the reproduction, distribution and the communication to the public of their
audiovisual productions. The vendor pays the producer.

Music
B2B:
Creators: Composers, writers, performers
Contractors: Publishers, Sound recording producers
Copyright Owners: Composers/ writers are original copyright owners but they may assign their
rights to publishers. Producers own the copyright to the recordings containing artists performances
produced with artists consent.

B2C:
vendors: broadcasters, digital services, distributors
buyers: the public, audience, digital service users

Composers create something new and original (Do they?!). Therefore they own exclusive rights to
it.

Composers may assign the copyright to a publisher that will take care of the commercial
exploitation of the music. Composer will then receive royalties. This is common practice

Producers are copyright owners of the recordings the produce. However it depende on the artists
consent to record the performance

Producers, as CR owners, license the reproduction, distributions and communication to the public
of their sound record. However Sound recording carry musical works copyright of the publishers.

Therefore vendors need a license from the publisher and the producer. In exchange thet pay
royalties to publishers and producers “calculated out of the economic result” obtainedaccoring to
the agreement between the parties.

1.9
1.10

What is the role of copyright in the business of creative industries?

ME: The role of copyright is to assign the ownership of certain spatial and temporal structures of
materials, ideas and media, their documentation and the instructions for their design to individuals,
groups or organisations. This is to ensure their future use and dissemination is allowed only by the
copyright holder.

Why would you say that it is essential?

ME: This is a slightly leading question, though I do agree certain copyright laws are essential. Our
current economic system tends to reward the exploitation of labour and the theft of materials, and
concentrates profits with those with the ability and tenacity to do so. Legal frameworks are the only
thing that keep these practices at bay and attempt to rebalance the social benefits and economic
profits more fairly. Copyright law is an important part of this legal tapestry that keeps extractive
profits seeking in check. In essence, it is about trying to reward the work involved in creativity and
create fair compensation for the labour of artists and producers. It often falls short of this goal, but
it is important none the less.
¨

1.11

Revenue by sector/region. Revenue includes the selling of cultural and creative products and
services to end consumers and businesses (B2C and B2b)

There is also an underground economy (lol) which involves the exchange of cultural and creative
goods and services hidden from view eg piracy. This is considered missing revenue

Asia-Pacific
-Visual art highest source of revenue
- China has big art buyer market
“Some countries in the region have poor copyright protection. Economic studies suggest that India,
China and other Southeast Asian countries could have more robust creative industry economies if
they had stronger and better enforced intellectual property protection. “

Europe
- CCI economy built on strong concentration of creators.
- Advertising then TV is highest source of revenue

North America
- Tv is the biggest sector
- Live and recorded music account for 36% of global sector

Africa
-”However, informal distribution channels still run strong in Africa and the Middle East, with little
regard for the economic value of culture. In many countries, festivals and performances are free.
Artists must rely on other sources of revenue, such as sponsorships, to finance their creativity.
Culture is part of an informal economy. “
Comment from tutor:
“In theory maps are considered works protected by copyright. In practice, I don't know if there is a
market, if the fact that copyright is an economic tool means that people commercialize maps. “

1.12

in Advertising, Newspaper and Magazines and gaming,

- contractors hire creative services in exchange for flat fees they pay creators;
- contractors are the copyright owners
- vendors commercialise products and services containing copyright protected works

Boons, Music Performing arts

- In books, Publishers own all the rights on their edition a pay the writer royalties
- IN Music, autors and composers sign various types of publishing agreements that either transfer
their rights universally or restrict them to specific rigts and time frames. Publisher promotes work
and pay composers royalties.
-Revenue streams that directly depend on copyright represent a substantial share of overall
revenue .

Movies
- No universally agreed up on definition of who are the authors of a film, it varies from country to
country. We can consider director, screenwriter and author of soundtrack.
- Producers are the copyright owners, they set the conditions and control the commercial
exploitation of the films

TV and Radio
- Radio and TV own exclusive rights on their transmissions, while the signal they transmit carries
third parties copyright
- Royalties paid by radio and tv to remunerate broadcasting rights make them one of the most
important revenue sources for copyright owners.

WEEK 2

2.1 – Books

Who are the creators?

- Writers. Two people can right on the same story but the final texts will not be identical

What are their rights?

- The legal protection resides in the original form in which the ideas are expressed

Who are the other Players?

- Publishers print, publish and sell books. They acquire elusive rights to produce an edition of a
book for a certain period of time from the writer. Publishers pay writers a royalty.

Who owns the copyright?

- Writers own the copyright.
If the purpose of the publishing agreement is the commercial exploitation of an edition, do writer
retain rights to their original text? There is a separation between the literary work produced by the
writer and the edition that the publisher produces. Writers can still licence translations of film script
versions of their original works.

2.2 – Music

Creators - authors, composers and performers.

Contractors - Publishers and Record producers.

From the outset authors and composers own the copyright of the musical works they create.
Performers have the right to authorise or forbid the recording and transmission of their
performances.

Composers have the rights on their musical works, whether written, recorded or performed.
Performers have rights on their performances, regardless of the music they perform.
Performers can create their own recordings. In this case, they are both creators and contractors.

Publishers acquire rights on musical works and promote their commercial exploitation. The
publishing agreement defines what publishers can do with exclusivity regarding the
commercialisation of the musical work. The agreement also determines the royalties the publisher
will pay composers. The publisher can become the copyright owner if the composer transfers all
their rights.

When performers wish to record a musical work the producer of the recording needs to be granted
a licence by the copyright owner.

Producers are in the business of recorded music. They take on all the responsibilities related to the
production of the sound, including the costs involved. They are the copyright owners of the
recordings they produce.

Sound recordings carry both musical works and performances. The first are recorded under the
publishers licence. The performer’s interpretation is recorded and commercialised based on the
performer/ producer recording agreement.

A contract will set the performer’s share of the producer’s income deriving from the commercial
exploitation of recordings. Producers pay performers royalties.

A comment:
I have been involved in an ongoing debate regarding sheet-music or transcriptions of music. Some
have argued that, because the music is published in ways similar to books it should be a literary
right. Others have said, because the work is put into a different format requiring a 'reader' it should
be seen as a mechanical right.
Where do you think sheet-music should go? Answer : Mechanical rights
2.3 - Visual Arts, Architecture
The Berne convention is the main instrument of international law on authors rights .

Every type of production of a literary, scientific and artistic nature whatever e medium or form of
expression qualifies.

The resale right in the Berne Convention:

The author, or after his death the persons or institutions authorized by national legislation, shall,
with respect to original works of art and original manuscripts of writers and composers, enjoy the
inalienable right to an interest in any sale of the work subsequent to the first transfer by the author
of the work.

Visual artists and Architects retain reproduction rights.

Comments:
Why is it that with music, every time a radio plays in a public place, there has to be a certain
amount paid to an association that distributes this money to some but not all music creators,
whereas if paintings hang on walls of the same office to make it (as music) more appealing and
pleasant to stay in, there is nothing received by any of the visual artists?

2.4 – Radio and TV

The Berne Convention stipulates that “authors of literary and artistic works shall enjoy the
exclusive right of authorising the broadcasting of their works or the communication thereof to the
public by any other means of wireless diffusion of signs, sounds or images.”

Broadcasting organisations have the right to authorise or prohibit the rebroadcasting of their
broadcasts, the fixation of their broadcasts, the reproduction of such fixations, as well as to limit the
public exhibition of their television broadcasts

These rights are connected to the dissemination of the signal in itself, regardless of what the signal
carries and delivers to the public.

The content and the carrier are two distinct aspects. Whether they broadcast their own or third-
party content, they have exclusive rights on their transmissions.

2.5 – Performing Arts

although it may be written and the score may be published, music comes to life when performed,
whether that performance is live or recorded.
The performing arts sector includes activities related to the performance of artistic
works live in front of an audience, broadcast or otherwise transmitted, recorded,
filmed, or otherwise fixed.

It includes dance, music, opera, drama, and also magic, oratory and circus arts. Performers are the
actors, singers, musicians, dancers, and anybody who acts, sings, dances, plays or otherwise
performs literary or artistic works, regardless of whether the work performed is protected by
copyright, or not.

Rome Convention is the main international agreement for the protection of performers, sound
recording producers and broadcasting organisations.

The common point is that singers and musicians, just like actors, may perform live, and have the
right to forbid the transmission and fixation of their performances.

2.6 – Movies
According to the Berne Convention, it is up to domestic legislation to define who the author of a
motion picture is.
When considered a joint-work, a film’s co-authors are mainly the director, the screenwriter and the
music composer. In some countries, when the script is developed based on the adaptation of a
literary work, the writer becomes a co-author of the film as well. In other countries, anyone who
participated is a co-author.

In general, the producer does not give authors further remuneration for the exploitation of their
work. This is why the producer tends to have all economic rights over an audiovisual work.

2.7 –Advertising, press, games

Games
Designers, visual artists, screenwriters, composers, and programmers are creators of copyright-
protected works needed for the production of games. Much like in the film industry, authors in the
video game industry usually receive a single payment in the form of a lump-sum or salary .

Advertising
advertising represents a crucial source of income for these sectors.
Clients hire advertising agencies to create, produce and publicise commercial campaigns. The
campaigns are developed to promote and market client’s products or services. This is why clients
own the rights of the works created for this purpose.
Agencies hire, on behalf of their clients, production companies, or creators directly, to produce
campaigns based on their clients’ marketing strategies. Agencies also negotiate and buy commercial
space in all kinds of media.
Creators are paid lump sums .
Nevertheless, the use of pre-existing copyright-protected works in advertisements requires a licence
granted by the rightsholder, such as record and film producers and music publishers

Economics of Copyright

2.8 - Writers and publishers

In the 18th century, a new mindset brought in liberal ideas that considered monopolies a hindrance
to the production of wealth.
Publishers claimed that writers, as owners of property rights, could transfer their rights to
publishers. Once transferred, publishers would become the copyright owners of a literary work.

The Berne Convention, founded at the end of the 19th century, clarified that authors have the
exclusive right to authorise the translation, any kind of adaptation, the reproduction and
distribution, the public performance, the communication to the public of the performances,
the broadcasting and rebroadcasting and the transmission and retransmission of their works.

2.9 - Music: creators and producers

For centuries, the live performance of music has been the main activity of composers and
performers. It is perhaps one of the oldest forms of communication and reasons why people get
together.
composers or copyright owners, such as publishers, have the exclusive right to authorise the
recording of their songs, as well as the reproduction of copies and the communication to the public
of the recording.
Until sound recording became a business, performers’ activities were limited to performing before
an audience in theatres, concert halls, ballrooms, and later on the radio. With the development of the
recording business, once the performance was recorded, it could be played repeatedly in different
places, including where artists used to perform live. Consequently, hiring performers was no
longer necessary, even though the recorded performance would continue to yield economic
results.
The chain of rights begins with the author’s approval for the fixation of the work. Once music is
licensed, the final product will be carrying, not only the author’s and/or composer’s rights, but also
the rights of the other parties involved in its production: performers and producers.

COMPOSERS V PUBLISHERS
Composers and authors create musical works. Music publishers promote and market musical
works.
Publishers promote music by:
• offering performers and producers music to record.
• offering advertising agencies music to be used in commercials.
• offering film producers music to be included in soundtracks.
• promoting performances on radio & TV.
• promoting music in a playlist on online streaming services.

Composers can also do this themselves.

Rights
• The publishing agreement can either include an assignment of all rights from the
composer to the publisher; or
• A transfer, on an exclusive basis, of specific rights from composer to publisher, such
as for the reproduction, distribution and communication to the public.
• The assignment of rights is usually valid for the copyright term of protection. But it
can also be for a specific term defined in the contract, if as decided by the parties, or
mandated by law.
• In the case of the transfer of certain rights, publishers will enjoy these rights on an
exclusive basis for a limited period of time, as defined in the contract.
• Remuneration
• Publishers license the commercial use of music and pay composers royalties. The
publishing agreement sets composers’ royalty rate for each mode of music
exploitation.
• Composers and publishers may mandate a collective management organisation
(CMO) to license, collect and distribute certain rights.
PERFORMERS AND PRODUCERS

recording agreements were founded on two assumptions:

i) producers own the copyright of the sound recording they produce;
ii) performers have exclusive rights on their recorded performances.

What are the crucial points in a recording contract?

• Rights
• Recording contracts include an assignment of all rights from the performer to the
producer.
• Producers own the copyright, including performers’ exclusive rights. They license all
forms of exploitation of recorded music and pay performers royalties.
• The assignment of rights is valid for the copyright term of protection of the
recording.
• Remuneration
• The contract sets performers’ royalty rate for each form of exploitation of the
recording.
• Performers and producers may mandate a collective management organisation
(CMO) to license, collect and distribute revenue related to the communication to the
public of their recordings.