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Music Rights, Grand Rights and Music Publishers: IMZ primer for Dance and Opera Arts Producers

The following is a partial transcript of the IMZ Workshop on Grand Rights at the Golden Prague International Television Festival on 9 May 2005. It is largely of interest to dance and opera arts television production producers.

In creating a television program, there are three sorts of rights which are important. Sync rights, Small rights and Grand rights.

Grand rights are triggered by broadcast and when the music has been published and is under copyright. This almost always the case with a living composer and often the case with a dead composer. In the case of a dead composer, they can be triggered in two ways. If he has recently passed away, or in the case if there has been a critical reedition of his work. They are at set fees on a per country basis and can be very high. As much $18,000 in Canada for a single song.

As the television market fractures into the hundred channel universe, the budgets for arts programming shrink smaller and smaller.

Often the Grand rights represent such a huge expense that they make the costs of a production prohibitive. Or the reairing of a production. Or the sale into extra markets after the production.

The IMZ organised a day long conference on the subject divided into a presentation followed by a round table, inviting arts producers, television broadcasters and publishing representatives to discuss their conflicting viewpoint. Chair for the discussion was Henke van der Meulen, President of the IMZ and Head of Music at Nederlands public broadcasting.

In the morning, a general definition of Grand Rights was sought.

Lawyer James M. Kendrick, president of EAMDLLC/Schott Music Corporation presented the American copyright situation with a full powerpoint presentation which took half an hour just to cover the basics. More or less, it was clear that the situation in America is that almost any piece of music is copyrighted somewhere by someone, either as an edition or under copyright. Although it is more than likely that the creator doesn’t personally actually hold any rights at this point.

So much for protecting the rights of the creator.

In the US, the lawyers seems to be the only ones reaping the benefits of the current situation. In Europe, the creator’s rights are often inalienably protected by law.

Ruth Towse a British cultural economist and academic makes the peculiar point that as opera is so heavily publicly subsidised in its creation, the Grand Rights should revert to the public as there is no reason the public should have to pay twice for the same piece of music and/or not enjoy the benefits.

Bernd Hellthaler, president of EuroArts Media states that the Grand Rights fees are simply too high and choking the production process. EuroArts Media are currently in a lawsuit over Grand Rights.

The afternoon began with the view from the music publishers side.

Jens Berninghauss of Schötte Music in Germany began with a prepared three page speech of admonishment, reproach and terror.

Publishers are willing to work with producers if the supplied information about the production is true. If untrue, producers should be obliged to pay stiff fines and should do so happily. All negotiation should be before the fact. Publishers only wish to work with professional organisations with commercial goals. Publishers are only protecting the interests of the composers who would not like to see poor quality productions of their works. Profit sharing serves no purpose. It is poor quality production, not in the interest of composers or broadcasters.

Sabine Hochhauser-Thomas Tietze-Jens Berninghauss

Sabine Hochhauser – Thomas Tietze – Jens Berninghauss

Henke van der Meulen took exception to this reasoning and pointed out the non-sequitur inherent in Mr. Berninghaus’s reasoning. Why should flexibility in Grand Rights negotiation necessarily result in poor quality productions.

Such specious arguments suggest again that there are too many lawyers to feed here and that we are a long way from the composers.

The next music publisher up at bat, Thomas Tietze of Bärehnheiter Germany points out that producers and publishers should not see one another as enemies but that open communication requires flexibility

Czech composer Zbynek Mateju recounts that he had had problems with my own work. When it was in the hands of the publisher, there was no advertising and no publishing of his pieces. The prices were so high that the musicians asked me for copies privately. After a time he dropped his contract with the publisher, and dealt directly with theatres. Work went much much more quickly for everybody, for payment as well.

His own model now is to keep his own publishing rights and to work with an agent. On the other hand he had had problems with film producers getting them to respect contracts. Perhaps publishers may be helpful in this sphere.

Next spoke German producer Reiner Moritz of Poorhouse International. He likes to work with publishers. They can server a valuable function. As an anecdote he was once working with Isaac Stern on a Peredzsky concert. The morning of the recording a price still hadn’t been agreed, Isaac Stern said to call the head of Schött at home and tell him they would record Brugues instead. The price dropped from $25k to $12k immediately.

Dr. Moritz pointed out that there is a problem with broadcasters, as they don’t want to pay the Grand Rights so the costs are deducted from the producer’s fee. Music hire, sync rights, broadcast rights. The producer pays too many times. To give us an idea of the costs, a traditional network pays about 20,000 euros per broadcast for grand rights.

Often the producer is getting a smaller license fee for his program than the publisher is getting for the Grand Rights. Specifically, ORF (Austria) often pays more for Grand Rights than they pay the show producer. This happened wsith a Prokofiev ballet – less money for license than for music rights.

As far as America is concerned this is all theoretical as nothing that doesn’t get ratings doesn’t get shown.

As a consequence of music rights fees very few new works are produced anymore. The system must change from flat fees per country to a percentage of what the producer receives.

Otherwise, Hungarian TV offers $1K for rebroadcast but since the music publisher wants $2K no sale can be made and it is impossible to get these works shown in smaller countries.

In Dr. Moritz’s opinion, license fees are not the barrier now, but publishers’ fees.

Chris Hunt head of Digital Classics in the UK sent in a written statement: of the thousands of hours of programming for which Digital Classics own the rights for there are hundreds of hours with Grand Rights attached. But no more new programming with Grand Rights involved as the fees for Grand Rights are higher than the market rate for worldwide license fee. We must move to a royalty based system.

Publisher Jens Berninghaus of Schött remade his point that for him Grand Rights are the sign of an investment on the producer’s side in the production. The composers and publishers are not interested in bad quality production.

Chair van der Meulen calls Berninghaus again on the non-sequitur. No connection between royalty system and bad quality productions. The audience applauds.

Publisher Sabine Hochhauser of Universal Edition Austria sticks up for her colleague Berninghaus. Universal tried no fee-models and it didn’t work. Will more productions get made if we don’t get paid? She doesn’t believe it. Moreover, she notices a strange contradiction. Producers want flat fee buyout and producers want profit sharing. Which is it?

American lawyers James M. Kendrick suggests that an adversarial relationship between music publishers and television producers is inherent to the situation and healthy. Producers are trying to get the lowest price possible and keep as much money as possible, while the publisher is trying to get as much money as possible.

Dr. Moritz comments that Universal will do flat rate buyout. Schött and Bussi won’t consider it. It is particularly a problem with buyout for critical editions as publishers want as much for critical edition as for new work while broadcasters don’t want to pay.

It would be better to move to a system where music publishers get 11 ot 12 or 14% of budget.

He insists that the argument that there is no upfront barrier to opera production is absurd and that the quality of productions would fall is absurd.

Ruth Towse makes the point that it is impossible to predict cultural success. The publishers and the broadcasters have to subsidise unsuccessful works with successful works.

Hazel Wright from the BBC International Sales division joins the discussion reminds everyone that you have often have to pay upfront to be able to sell. And while you believe in all your programs but they don’t always work out and you can’t recuperate your music publishing fee.

Publisher Thomas Tietze of Bärenheiter insists that the copyright protection for critical edition is entirely justified. It may be the only source of revenue for a music editor who travels to archives for years and works from two to four years uncompensated.

Austrian producer Bernhard Fleischer makes a point out of left field. As far as he’s concerned, publishers should help finance the promotion of film to promote their client.
Electronic publishing promotion costs entirely covered by film producers while publishers do nothing and just collect money.

Austrian music publisher Sabine Hochhauser of Universal Editions parries Fleischer’s accusation. Publishers have given up promoting work to ORF.
They went to ORF and tried to work on creating a series with them without publishing fees. The answer from ORF was simply no, we aren’t interested. After that, no Universal doesn’t actively try to promote the artists. Not that they haven’t tried.

A gentleman from Channel 4 from the BBC says that the upfront sums for music publishing are enormous and often they lose money on productions as a consequence.

Thomas Bedck of Suise TV DRS say the discussion is impossible to follow as he’s not a lawyer. He doesn’t have a lot of money or time for this part of the work. But the costs are prohibitive. 40,000 Swiss francs for opera for every run. His annual budget for his department is 2,000,000 Swiss francs. A production with Grand Rights attached he can run it once, but can’t afford to show it second or third time. We need more flexibility. We pay once but we should get a second or third run for free for arts production.

The Good Guys Thomas Bedck Speaks

Bernd Hellthaler – James M. Kendrick – Thomas Bedck – Dr. Reiner Moritz – Henke van der Meulen

Bad guy Schött publisher Jens Berninghaus Schott is unambiguous.

“You want a big package of rights, then you have to pay a big fee.”

Austrian publisher Hochhauser of Universal nuances again her colleagues statements and points are that the tarifs for Grand Rights were agreed with broadcasters. If they don’t like them, the broadcasters can reopen fees with publishers.

Henke van der Meulen jumps on this. Great. We can renegotiate tarifs at any time. Great. Let’s do it.

German producer/specialty channel representative Katia Petz Unicall points out that her specialty channel cannot afford to buy grand rights. 1600 euros for 2 hour broadcast our fee, while the music publishers want 2000 euros for rights. She doesn’t want the rights for free like some of those present, but producers should be able to live. Many programs die an early death as a consequence of Grand Rights and simply don’t get shown. Often the broadcaster wants three or four runs but only pay once, while the music publisher refused to see program shown so often.

James M. Kendrick suggests step fees. One fee for the German speaking territories, another for the rest of Europe, another for America. As each sale is made, the additional fees become due. Alternatively in his opinion a percentage of revenue model could work.

Jens Berninghauss of Schött tries to be more conciliatory that arts producers, television broadcasters and music publishers need to discuss the new technology. Perhaps we need new tarifs. Time and money seeking copyright infringements would be better spent in new negotiations.

Dr. Moritz insists that profit-share will not work, as there is no profit in arts programming. There is revenue sharing. Arts producers could get paid 90% of the license fees while 10% could go the music publishers. On a related tangent, Dr. Moritz points out that digital channels replace in a very bad way the system for arts production from twenty years ago. Now arts producers don’t get a third of what they used to get from public broadcasters.

Apparently the publishing houses must pay 50% of their Grand Rights fee to another German company. We have our problems too, adds Thomas Tietze.

Chair Henke van der Meulen suggests that things are in a sad way if the complexity of the rights field becomes an excuse for why a production can’t be made.

Independent dance producer Alec Kinnear differentiates dance from opera. In the case of independent dance film, there can be no question of paying Grand Rights. Too great a part of budget. Instead all music must be commissioned with Grand Rights thrown in. To the point that music for a dance piece must be recomposed if it is covered under Grand Rights. No publishing fees can be envisaged for dance production unless on a percentage of revenue basis.

Chair van der Meulen concurs that he usually commissions new music for dance films but has occasionally paid the rights. For bigger dance productions, it is is envisagable.

Thomas Beck of Swiss Television points out the obvious to the oblivious. There is no commercial success for modern music. To my program director I would like to promote a series at the Zurich Opera House. So many reasons against it – Grand Rights are the final straw. Perhaps in 20 years there will be greater commercial success and there will be something to share. We must work together towards this. But right now music publishers must cooperate. Or there will be nothing to share at all. The pie is shrinking every year.

Chair Henke van der Meulen concludes the discussion with the promise to have a position paper written up to present the music publishers in one month’s time and thanks everyone for their time and the music publisher representatives for joining us here.

The official IMZ Transcript of the Grand Rights seminar is now available online along with status update of negotiations with Music Publishers.

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