TPM 51 | Contracts

 

Do you know that you can protect your rights in the music industry? In this episode, Eric Farber, an entertainment lawyer with around 20 years of experience and founder/CEO of Creators Legal, tells us the importance of knowing your rights, especially in the music industry. Music can have lots of branches: the beat, the lyrics and writer, the singer, the publisher, and so much more. And if the music or song blows up, without a formal contract within each aspect could lead to problems, specifically on who owns the money. Learn what the benefits are for having contracts and enhance your knowledge in the legal matters in the music industry.

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Legally Protecting Your Rights In The Music Industry Through Contracts With Eric Farber

I’m excited to be here with Eric Farber from Creators Legal. This is an important topic and something that is neglected by indie artists until it turns out that we need to pay attention to it. I want him to give a little background on himself, his experience as a lawyer and now this new Creators Legal that he started. Give us your background, Eric.

I was a sports and entertainment lawyer for several years, representing all different entities, athletes, entertainers, filmmakers, musicians, artists, authors and whatever you can think of. I did a lot of work in the music business, mostly in the rap world, where I represented Tupac Shakur Estate for many years among a lot of other big names in the entertainment space.

What made you decide to start this new venture? I love learning things like catchphrase descriptors because it helps you understand and encapsulate what it is. I know it’s been called the LegalZoom of the entertainment industry. What was the other thing that someone said?

TPM 51 | Contracts

Contracts: If you’re a beat artist, you can come in here because people will buy and license your beats. So make sure that each time you sell one, you’ve got the right contract in place.

 

Daily Variety called us an entertainment lawyer in a box.

Do you feel like those are good descriptions of what you guys do?

We like to say, “One-click contracts for creators,” but an entertainment lawyer in a box is pretty accurate.

What kinds of things do you guys offer with this service and how does it work? We’ll get into why you created it but I want to give people an idea of what exactly it is first.

We are a do-it-yourself online service is the best way to put it. It’s a website and we are contracts for creators and all sorts of creators, whether you’re an indie filmmaker, a musician, author, you’re in live theater, web series, podcasters, etc. We’ve got more than 100 contracts. It’s probably about 120 contracts. We’re set up either as purchase a single contract or for more prolific creators, a subscription. We have a simple use form builder that helps people build the contracts, which take on average. We’ve timed them less than six minutes to do each one.

A full digital briefcase, which we call, Project Briefcase, where people can store all of the different contracts for all the different projects that they’re working on, plus we’re all digitized. We’re more modern than some of the other systems around us, especially lawyers. Once you build the contracts, you can get them signed. Send it to the other person through email and get it signed right there and everything’s kept in one spot.

Instead of using something like DocuSign, you’ve got that all built into your service, which I think is smart.

You get an email on their phone, they click it open, they can sign it and it’s done.

That’s key for situations where you end up in a room with people and you start writing a song. You want to be able to have that be simple and not have to worry about figuring out how to contact the people later. Just get it done.

The idea came from a good friend of mine. He is a guy named Ron Welty, who was the drummer of The Offspring for many years. I think they have a claim to fame of the highest-selling indie band of all time and that’s exactly what he said. He has a studio at his house and he’s like, “I never get anything signed because people come over and then by the time we know, we’ve cut a song and we didn’t realize that this was going to happen.” That came from him like, “What if we’re all sitting in a room?” I said, “Jump on and get a done.”

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I’ve heard many stories about that happening and then people later getting potential sink offerings and stuff like that and not even know how to track down the people to get their approval.

I can’t say all the stories but in the rap world, this was common, especially through the ‘90s. They’d have ten people working on a song. They’d go out and they’d take clips of other people’s songs. People think, “It’s a little tiny bit.” There is no such thing as a little tiny bit of sampling. You either sampled it or you didn’t. If you took something else, you got to get a license for it. There are a lot of beats.

People are licensing beats all the time and digital creators are creating beats and selling these things all the time. You’ve got to have those things. You never know when a song is going to blow up, especially nowadays. You never know when an indie song could take off and if you ended up getting a publisher or a more traditional distributor, you’ve got to have these things or they won’t take these songs.

In your experience being an entertainment lawyer, what were the things that you saw happening for people or the pain points that made you want to create this service to help people, so they didn’t get into these situations where legal was an afterthought until they needed it?

I saw many situations that happened and usually, it was people who would come and say, “I’m being sued. I’ve got a sue somebody because I did a collaboration on a song, the song did well and now nobody will pay me.” “Where’s your contract?” “We didn’t have one.” What I saw a lot of times, especially in the indie world, there is not a lot of money flying around to create stuff. They’re avoiding lawyers because lawyers can be such an expensive endeavor, so they don’t bother.

A lot of these contracts are simple. I always say lawyers over lawyers. Things are more complicated than they need to be. For the most part, entertainment contracts, music contracts and films, they’re just templates. All we did was give access, as we call it, the access to justice for the people who need this stuff. The most prolific creators and most of these creators are making a ton of money. We wanted to create something that was accessible for people.

What’s the subscription model look like? How prolific do you need to be to make that worth it versus doing one-offs?

It’s much less. In fact, we are about to set up a code for your readers and get BREE75 that can put that in. I think it’s less than $100 a year for all the contracts you want.

I’ve looked at contract websites where it’s like $40 per contract. If you’ve used 2 or 3 of them, you’re done. That’s it. There are all kinds of things that come up. You said you’ve got 100 different kinds of contracts. Give people some ideas of where they would be, what they would be doing or what might come up that would make them need a contract?

TPM 51 | Contracts

Contracts: Having contracts also leads to a good relationship with the artists, collaborators, and contractors.

 

I’m going to speak more specifically towards music because this is about music. We have an indie music package that has artist management, that has a single song collab contract, which is a couple of people working together on a song and it lets those two artists work things out in advance to collaborate. We have sync licenses. We have mechanical rights licenses and then hire the people that are working on the songs with you, like a side artist recording agreement or a featured artist recording agreement. If you’re bringing people in on those songs. I won’t even say traditional because I think indie is a traditional part of music now. It goes back for decades.

It’s more about individual songs than it is about albums these days. We’ve created these things that are about individual songs and getting things done on an individual song basis, but we have master use licenses and beats licenses. If you’re a beat artist, you can come in here because people are going to be buying and licensing your beats. Make sure that each time you sell one, that you’ve got the right contract in place.

If you’re not going through BeatStars or one of those websites, if you were selling them directly on your own website, you would have the ability to have the right contract for that.

What happens a lot of times is it’s not necessarily going through somebody else’s way, going through your website, so to speak. This stuff is happening person to person. That’s happening probably more than it is than going and buying a beat for people because one of the things that I’ve always loved about the music community is it is a community. People are working on stuff together and they’re collaborating together on a regular basis. We wanted to create contracts that were about those collaborations.

What about situations where you’ve got side musicians, you bring in someone to play a guitar part on a song, a backup singer or even if you’re a songwriter and you bring someone in to be the singer on your song, but they work for hire. Do you have contracts for all of that?

All of our contracts are work for hire when it has anything to do with the collab and the ability to do royalty splits within the contracts as well.

If there’s a situation where you want to offer them a percentage of the royalties, you can do that with the contract or you can say like, “No, you’re just a work for hire. You don’t get any access to royalties on the master or anything.” What about things for working with the studio as far as them not having any rights to your masters.

If you’re working with a studio, they’re going to have a contract for you. These are musicians-centered contracts. You’re the artist-producer but if you go into a studio, they’re going to hand you a contract.

I did not have a contract when I had my first studio experience. They did not hand me anything.

We don’t have a studio contract in there but I’m going to write that down because my experiences have always been that they’re going to hand your contract.

Let’s say you’re working with someone that has someone who has a studio in their garage, their basement or whatever. They might not have a contract. I think as musicians, we should be prepared for that, to make sure that they don’t try to make any claim on our masters.

One of the things that’s beautiful about the system that we’ve created and we’re doing a lot of talking to people about use case scenarios because we have many different segments of the entertainment business and the entertainment business is broad these days. I spoke with a woman who is a digital creator. She has a fashion brand, skincare line, a writer and has podcasts. There are these different things that we don’t even think about sometimes, as when we’re iterating and coming up with the new stuff. We’ve been looking at the traditional side.

People contact us all the time to say, “What about this?” We didn’t even think of that and we’ve been doing this for years like “I didn’t think about that use case.” It takes us a few days to put something together and then get it onto the site. I encourage anybody who uses our system. One is it’s still early, we’ve gotten a lot of subscribers already and a lot of users, and they’ll reach out to us. We love it when they reach out and say, “What about this? Have you thought of that?” We’re busy like little bees in the backroom trying to make more.

What about something that is not specifically music-related but things that musicians need. For example, if you hire a contractor for something, maybe they’re going to create album art for you or maybe they’re going to work for you on a limited basis on some projects. Do you have any contracts for that or can they adapt something that you have for that? Would they need to go somewhere else for that? If they’re working with a contractor about something that’s not about a song like they’re creating album art or they’re working for them for a different project.

We don’t have full album art stuff but we do have graphics. It’s similar to the self-publishing that we’ve got, where people are working on that. We do have that headline coming on album art and things like that. It may be in there already. The graphics and then social media managers, etc., for your online presence. All these people are as good as digital creators.

If somebody refuses to sign a contract, especially in collaboration situations, you should really think twice about working with that person. Click To Tweet

I’m thinking of anyone that a musician would need to bring on board. If you’re hiring, say, a PR, agency or something, they should have their own contracts but if you’re pulling some friend that you have or whatever, that’s going to work for you in a certain way or on a limited basis. I think it’s always good to have a contract. Everybody knows what everybody’s responsibility is. There may be things you don’t want them to talk about in public or you don’t want them to steal your stuff.

Here’s my take on contracts, as somebody who’s been doing this for a long time. Most things don’t end up in court. Generally, things end up in court when there is a lot of money invested and you don’t make any or somebody makes a lot of money and then everybody wants to argue about it. The vast majority of contracts that are out there in the world are there to create better relationships.

That’s what it’s about is creating a better relationship. You do that by being on the same page before it gets started. Everybody knows what’s expected of them, what their obligations are, what they get if they complete that, etc. That builds better relationships and that’s how you grow businesses by creating better relationships. Even the phrase on the same page comes from that. People were reading the same document at the same time.

I love that because that’s been my experience in my business starting out. Maybe we hadn’t hammered things out clearly with some of my contractors and I’ve been shoring up a lot of that in 2021. It’s like when you have an expectation of your children. If I don’t tell my kid what do I expect when I say clean your room, they’re going to come out with something that they think is clean and I’m going to be like, “This is not clean.”

It’s also to make sure that they understand this is what I expect the job is and that they know that they’re not going to come back later and say, “I thought it was this and that.” Having that sense of security on their side as a contractor has made the relationship and the working together easier as well. I think you’re right and people sometimes think that doing a contract is going to make the relationship strained and more uncomfortable, but I’ve found that it does make it better.

It’s the opposite. People are afraid of contracts. They shouldn’t be afraid of contracts. They should be afraid when there isn’t one, where somebody refuses to sign one. If somebody refuses to sign one, especially in these collaborations situations, you should think twice about working with that person. It’s a good benchmark of how somebody is going to be in the relationship itself. I ran a law firm as well for many years and that’s a business like any other business. People would say they’re going to hate sending me their contract, whether it was a vendor or whatever. I’m as easy as it gets when somebody sends me a contract. I have no interest in negotiating it heavily.

I just want to see what are the rights and obligations, how long is it going to last and what’s the compensation on it? I do little negotiating in a contract. That’s why I like templates. I am trying to get a sense of what, “What is this other party going to be like?” Hire a software development team. It’s the exact same thing. What are you supposed to do? How long is this going to last? How much is this going to cost and who owns it at the end of the day? All of these things are about who owns it at the end of the day?

One of the things that are important for musicians is the whole concept of work for hire. At the end of the session, you’re creating a piece of music and piece of art. That art has ownership rights to it. Who can go ahead and get the copyright to it? Who has the right to exploit it? Who has the right to sell it? Who has the right to license it? If there’s no work for hire contract between the collaborators and anybody who touches it, then they will have a right to a portion of that copyright.

If you’re a singer-songwriter or a musician and you want it under your name and you want total ownership, you must have a contract with anybody who touches it in the creation of it or they will have rights to the copyright. That’s the basics. Copyright is the right to copy, to make more, to exploit it. You want to have all of that copyright together.

It’s why having a contract with your studio is important or your individual that’s recording you because they have your files. I’ve seen this with a lot of students. It’s interesting that you say it that way because I think most musicians wouldn’t ever think of it like that. They think of it like, “I have the right to it because it’s mine. I created it. I came up with it.” They’re thinking about it from the songwriter perspective versus the perspective of the master recording, where it’s like, “These people did create this.” You paid them but they did create it. They have the right to it unless you make it clear that they don’t.

TPM 51 | Contracts

Contracts: At the end of the session, you’re creating a piece of music. You’re creating a piece of art, and that art has ownership rights to it.

 

It even goes further than that. Joint copyright holding in music, especially for anything. If you are the co-owner of a copyright, you have the right to license it. You may not have the right to license it exclusively to somebody else but you have the right to license the music to somebody without the consent of the other copyright holder. If you own the copyright with somebody unless it’s in writing that they can only license it jointly, all you become is the right to receive money from that license. As the other person, you have no say in it. You’re partners, go out and license it to commercials or to whatever they want and you say, “No, I wanted to protect the integrity of it. I don’t want it in some car commercial.” You have no right to argue that.

Some of these things are incredibly important for what they call the chain of title. We talk about this a lot in entertainment laws. The chain of title of things is you got to have every I dotted and T crossed to make sure that you’ve got a solid chain of title. If a studio comes along and wants to buy the album from you to distribute the album, if you don’t have all of these things, they won’t do it unless it’s a massive bestseller because they do not want to spend the time, energy and money to go out and clear up all these rights on your behalf.

Let’s say you get all this stuff in order. You got everything in order with your collaborators. You get a publishing company that’s interested, and they want to represent your song. Them getting on board, is that adding to the chain of title? How do you speak about that?

They’re going to want to see it. They’re going to want to see that chain of titles.

When they become a publisher of the song, then they have rights in there as well.

There are new rights being created from that. It’s the ball of the chain of title and they’re coming along after them.

Let’s talk about sync because that’s such a big exciting topic for my readers, especially now with the indie world and so much content being created that needs music. Having all of your contracts all in order and everything is going to help you get placements for sure. As far as sync licensing, do you have the actual contracts? Let’s say I wanted to license my song to someone else, do you have contracts in there?

We’ve got them from the musician perspective in the music category and then we’ve got them from the filmmaker and video maker perspectives in their categories.

If I wanted to do a direct license or something to somebody who’s creating some short film or something like that, I could get a contract for that?

Absolutely.

Are there any other contracts for musicians that we haven’t talked about yet that you guys offer?

I think one of the things that we do have in there is a split agreement. Musicians can go in do quick royalty splits as well in there. We are working on it. It’s not in there yet, but band partnership agreements and things like that are coming down the pike. It’s a little bit more difficult than the way that we built the system to do these larger numbers if the band is more than a few people. We were working on those as well.

Let’s say we need to give somebody these contracts to prove that we have this chain of title. What sharing options are there? Do they then download them as a PDF? Are they able to send a view-only copy?

Once a contract is completed, they can forward it to everyone. We thought of that because we knew that this stuff gets reviewed by other people quite often. Our Project Briefcase is designed to be by the project itself. We are working on the ability to zip a file. That’s one project. If your podcast is in there as well as different albums but your podcast gets picked up for distribution and somebody wants to see all the contracts, you can forward them all at once.

That can be useful for sync licensing, for sure. Music libraries and things like that. Is there anything else that you want to tell indie musicians about why they should not ignore the legal side?

Too much stuff gets shelved and you can’t bring it out unless you’ve got these things done properly and that’s an important piece that I think that a lot of people ignore is that if they don’t get contracts done. There is stuff that can sit on the shelf. One of the examples is I represented an extreme athlete for a lot of years and they did dozens of hours of various footage that they had done, then somebody came along and said, “We want to buy this footage. We want to license this footage and put it in bars who will play the extreme skiing and all that stuff.” They moved this stuff and they wanted to license it for a decent amount of money.

One of the camera people who was involved had never signed off to work for hire. While they’re trying to get it signed, he died in a wingsuit accident. All of a sudden, there’s somebody else who’s, “You got to track down the heirs.” People who aren’t necessarily in the business immediately see dollar signs. It never got signed. The stuff sits on the shelf. What I always say to people is make sure you’ve got this stuff because you never know what’s going to happen to it and the last thing you want is to be sitting in a dark room.

Make sure you've got the legal stuff in the music industry because you never know what's going to happen to you. Click To Tweet

You put so much of your creativity, blood, sweat, tears, all of that stuff and money into integrating this stuff. You don’t want it to be stuck in limbo.

Especially in the film, it happens all the time where your stuff is stuck in limbo. Nobody understands what the rights are on something they say, “Forget it, it’ll never come out.” The studios are filled with thousands of titles that they can’t do anything with.

This has been enlightening. I hope it’s encouraged to our readers to take some action. I know you mentioned the BREE75 as a coupon for my readers. Where do they go to get access to Creators Legal?

It’s CreatorsLegal.com. It’s pretty simple. BREE75 is 75% off the annual subscription. That’s $96 or something like that for the annual. It’s easily accessible. We would love it if you came and checked us out. Tell us the things that you’re looking for that we may not have as well, so we can make sure that we create the central place for creators to come.

I love that about newer services. They’re always looking to get input from people to build it out, to be exactly what they need. Thank you for doing that and thank you so much for sharing all this knowledge with us. I hope it prompts our readers to take some action on the legal side.

Thanks for having me. It was great.

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About Eric Farber

TPM 51 | ContractsEric Farber is the Founder and CEO of Creators’ Legal, the Legal Zoom for the creator industry. We are DIY legal solutions for Creators, Filmmakers, Indie Musicians, Content Creators, Podcasters, Self-Publishers. Recently launched, Daily Variety called them “an entertainment lawyer in a box”. We have a full suite of contracts for Indie Musicians. Eric was a 20-year entertainment lawyer representing dozens of indies as well as some bigger names like the Tupac Shakur estate for over 18 years. Eric wrote a bestselling book about company culture in 2020 called The Case for Culture – about growing your business by having a great culture and treating people in the workplace like humans.