BY:Michael I. Rudell and Neil J. Rosini
Originally published in the Entertainment Law column in the New York Law Journal on September 13, 2019.
This July, Taylor Swift voiced strong dissatisfaction with not owning her early recordings, which were sold by her former record label, Big Machine Label Group, to Ithaca Holdings, whose principal is Scooter Braun. Exacerbating the situation was that Mr. Braun managed Kanye West during a time that he released a song and a video referencing Ms. Swift in ways that offended her. Also, Ms. Swift’s efforts to purchase the masters from Big Machine for herself reportedly failed when the transaction was conditioned on her remaining with Big Machine. (She moved to Republic Records, a subsidiary of Universal Music Group, last November.) Ms. Swift wrote that she felt “stripped of [her] life’s work, that [she] wasn’t given an opportunity to buy.”
Suggesting that she might attempt to address that state of affairs by re-recording several albums to compete with the originals, Ms. Swift has shined a spotlight on re-recording restrictions in agreements between recording artists and their record labels.
Almost all recording artists grant to the company to which they are signed ownership rights in the masters they record. In return, the company pays the costs of recording (which customarily include a payment to the artist), and for advertising, promoting and publicizing the record and the artist. Those recording costs are considered advances against royalties that the artist will receive based on sales and other exploitation of the recordings.
This ownership arrangement evidently appeared in the contract signed by Ms. Swift in 2005 with Nashville-based Big Machine. Her first six studio albums were huge successes, each achieving multi-platinum status. (This means that at least two million “units” of each were sold. To certify status in this era of electronic delivery, the RIAA equates ten permanent track downloads or 1,500 on-demand “audio and/or video” streams from the album with an album sale.)
The sale to Ithaca heightened Ms. Swift’s concerns over neither owning nor controlling the early masters she recorded. She has stated publicly that the terms of her agreement with Big Machine will permit her to re-record songs from her first five albums beginning in November, 2020. The first five studio albums were released between October, 2006 and October, 2014, making November 2020 just about 6 years after the fifth release. All this comes at a time when her new album, “Lover,” has been released with apparent great success.
Typically, an agreement between an artist and a record company makes the artist’s recordings a work for hire for that company, or in the alternative, the company is assigned all rights. Further, it gives the record company “exclusive, perpetual and worldwide” rights to manufacture, sell, distribute and advertise phonorecords embodying master recordings” on the album made by the artist under that agreement.
However, record company agreements traditionally do not prohibit artists permanently from re-recording the compositions on an album. Rather, to prevent near term competition, the agreement restricts the artist from re-recording any of the songs on that album for any third party until the later of five years following the date of delivery of the completed master recording by the artist to the record label or two to three years following the expiration of the contract and any subsequent contract between them.
Taylor Swift would not be the first to re-record her music after moving to another label. For example, the Everly Brothers decamped from Cadence Records, which originally released “Bye Bye Love,” “Wake Up Little Susie,” “All I Have to Do Is Dream,” “Bird Dog,” “Til I Kissed You,” and “Devoted to You.” from 1957-1960, for Warner Bros. Records in 1960. At Warner, they re-recorded those six songs in close imitation of the originals for a 1964 album entitled “The Very Best of the Everly Brothers.” (Some felt, however, that the new versions lacked the “magic” of their more youthful efforts.)
There’s also the fact that re-recordings of musical compositions, by anyone who so chooses, has been ingrained in the music industry since 1909. That’s when compulsory licensing of reproduction and distribution rights in musical compositions entered the U.S. Copyright Act (now located in Section 115) and allowed anyone to make and distribute to the public for primarily private use a new recording of a song previously released with the authority of the copyright owner. The only conditions are payment of a prescribed royalty to the owner of the composition and satisfaction of administrative requirements. The record label that released the first record with the same composition has no control over those re-recordings, except to the extent their contract with the original recording artist provides.
The Copyright Act contains another provision that could be of assistance to Ms. Swift, should she decide to imitate the original recordings closely. Section 114(b) states that the exclusive rights of reproduction and distribution held by the owner of copyright in a sound recording (e.g., a record company) “do not extend to the making or duplication of another sound recording that consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate those in the copyrighted sound recording.” In other words, absent contractual restrictions Ms. Swift (and any other artist covering songs on her albums) could closely imitate the sound of the original without infringing.
If an artist has freedom to re-record, is there anything a record company can do to protect its investment in the original recordings against an incursion by new versions? For one thing, it may guard against consumer confusion between its recordings in the original album and the re-recordings. The original album art, which likely belongs to the record company, could not be re-used without permission. And to avoid marketplace confusion, Ms. Swift might be unable to exploit a new version of a composition without affirmatively distinguishing it from the earlier version — or at least avoiding false indications that the two are the same.
For example, if she were to use a photo of herself, in marketing the new songs it probably would have to be a different one from that used in the decade in which the originals were made. This particular point has been litigated, but usually in the opposite chronological direction. For example, in 1974 Charlie Rich successfully sought an injunction against a record company with which he was not currently signed, preventing it from re-issuing an album recorded over a decade before with a “current likeness” that falsely implied it was recently made. CBS, Inc. and Rich v. Gusto Records, Inc. 403 F. Supp. 447 (M.D. Tenn. 1974). In a similar set of circumstances, Brian Johnson of AC/DC blocked an album of his earlier work with another band from being packaged with a current picture of him. Johnson v. DCC Compact Classics, Inc. 1989 WL 74824 (S.D.N.Y. 1989).
Ms. Swift’s deal at this point of her career, with enormous revenues from streaming, likely will represent a vast improvement over the original deal, both with respect to her share of revenue from the sound recording and from use of the underlying musical compositions in which she has a composer’s interest. But it’s almost inevitable that the songs will not sound quite like the originals. Her voice has matured — she has matured — and like the Everly Brothers’, her re-recorded vocalizations probably will have a notably different quality. Moreover, background singers and musicians, even if the same are available, might be perceptibly different in performance. The producers may be different. Even the recording technology that is used may be different.
It remains to be seen if Ms. Swift will avail herself of whatever rights she may have to re-record her early material, and what the new recordings will sound like. Certainly Ms. Swift has the power, stature and fan base to test the limits if she decides to go take that route.