Copyright and the Music Marketplace

The Kernochan Center Hosts a Dialogue With Jacqueline Charlesworth, General Counsel of the U.S. Copyright Office, and Entertainment Law Veteran Tucker McCrady '01
New York, April 9, 2015—U.S. copyright law for musical compositions and sound recordings hasn’t kept pace with technological change and is sorely in need of reform, said Jacqueline Charlesworth, general counsel and associate register of copyrights at the U.S. Copyright Office (USCO), and Tucker McCrady ’01, a partner at Greenberg Traurig who formerly managed litigation for Warner Music Group, at a March 31 Columbia Law School discussion hosted by the Kernochan Center for Law, Media and the Arts.
After an introduction from June Besek, executive director of the Kernochan Center, Charlesworth outlined the history of U.S. copyright law and music from 1790, when musical compositions were first protected as books, up to the present day, with compulsory licensing for distribution and reproduction of musical works in sound recordings. Sound recordings themselves weren’t protected by federal copyright law until 1972, and have a performance right limited to digital audio transmissions, with a compulsory license for webcasting. She discussed a recent government study she co-authored, “Copyright and the Music Marketplace,” that recommends reforms to help creators secure fair compensation, streamline the licensing process, improve access to authoritative data for licensing, and make payment and usage information transparently available to rights holders.

“From a copyright perspective, we are using a victrola,” Charlesworth said, pointing to the rise of downloads and streaming and the decline of physical media sales from 98 percent of the market in 2004 to just over a third today. “Music is now largely a singles market rather than 12-track albums.”

Charlesworth argued that the top fraction of content producers are able to appropriately monetize their work, but that smaller players struggle for reasonable compensation in a system where single spins of a song often earn less than a penny.

“We should allow market freedom, but with a collective option for smaller content producers,” Charlesworth said.

McCrady cautioned against likening spins on streaming services to spins on terrestrial radio or album sales, arguing that it’s difficult but important to compare licensing revenues by individual listens of a song. He agreed there is a pressing need for reform, calling USCO’s recent study a “stunning piece of scholarship,” and proposed a centralized licensing database with built-in incentives to encourage publishers to continuously correct and update information.

“It’s very difficult to get industry momentum behind even a great plan,” McCrady said, “because homo sapiens is wired to fear loss more than appreciate the potential for gain.”

The discussion was one in a series of spring IP events hosted by the Kernochan Center.