March 1, 2013
I - INTRO
Thank you for the opportunity of speaking to you today. There's nothing quite like a keynote address to force one to think, to take the time to assess the value of what you do, to focus on answering questions like: What have you been doing with your life and career over the last 30 years? Why do you continue to do what you do?
Before I answer these questions, I‘d like to share a few biographical facts I believe will help you to understand my perspective in relation to my keynote address to-day.
II MY BACKGROUND
As I have said before: I “blame” it on The Beatles. They’re the reason I got into the music business in the first place. They made it look so fun and easy.
Well the music business can certainly be fun, but it’s also lot of hard work too, if you wish to succeed. It’s often 10X harder than expected. Most music careers are an “overnight” success after 15 years of hard work. I have witnessed this first hand in my law practice. I’ve been providing legal services to those in the music business since 1983.
As you might guess, not unlike others that are drawn to the music business, I am a music lover, player and have been involved with music all my life. I studied classical piano for ten years beginning at age 7 and I started teaching myself guitar at age 11.
I still play guitar in and write songs for Blue Room (www.blueroommusic.com) an original blues band musical group which I founded and which has performed at the Beaches Jazz Festival, JVC Jazz Festival with John Hammond, shared the bill with B.B. King, Buddy Guy, John Hiatt and Jully Black among others and has independently released three CDs.
I spent three years after high school trying to make my living as a musician and working day jobs to make ends meet. I had every intention of making my living as a musician, not attending university and becoming a lawyer. During that time I also worked as a dishwasher (yes, I broke plates), on the night shift on an assembly line, (lots of swearing) as a lumberjack for a summer, (really hard, sweaty work-don't recommend it - lucky I survived) government clerk, filling in forms for the government, (that was exciting!-not) at a warehouse moving furniture and many other odd jobs to support myself. Even a really bad day practicing law in the entertainment field beats working as a lumberjack, or a dishwasher, etc.
In essence, I got my BA from the “University of Hard Knocks”. This life experience kicked me in the head, my heart and my butt-hard, forced me to focus on what I really wanted to do with my life and gave me the fortitude and perseverance to succeed; to do what I do today.
I learned first hand “never to say never” and that many are called, but few are chosen for success in the music business as a musician.
I also learned the necessity of diversifying and adapting in order to stay in the music business. That‘s common in this high risk business. For example, agents become lawyers, musicians become A&R reps for record labels, A&R reps become managers, etc.
When I was still a struggling musician, I also worked for a short time as a messenger for a law firm in Toronto then known as Borden and Elliott (affectionately referred to as B&E, now Borden Ladner and Gervais). (That's where learned to tie a tie.) The idea was formed then that one could marry the two disciplines of music and law. That way, I could (1.) try to help change the way that lawyers are perceived - “an honest lawyer?” and (2.) help musicians in my legal career; and (3.) pursue my own artistic endeavours and become my own patron of the arts. Did someone say I’m idealistic?
With that goal in mind, I entered law school after two years of undergrad and earned an LLB, the only degree I needed. To this day I do not have an undergraduate degree.
I graduated from Osgoode Hall Law School in 1981 and worked on becoming a music business lawyer after being called to the Ontario bar in 1983. It took two years of focused effort thereafter, including having two published legal texts to my credit, to get a break by becoming an associate of Clark Miller, a prominent music law lawyer in 1985.
Yes, I went to law school to try make a difference. That's what I have attempted to do with my career, specifically by focusing on practicing arts and entertainment law. I do my best every day to try and make it better for those in my sphere of influence, including friends, clients and those in the industry with whom I work and associate. I try to keep in mind that a law practice is a service and a profession, not just a business.
III - WHAT DO I DO?
If you wish to know, go to my firm’s website, in particular, the FAQ section and the “I Wrote The Book” section and of course, take a look at my book “Musicians and the Law Canada”. This gives you some idea what it is like to be in my world.
I literally live the book everyday in my practice. What I do is a specialty form of commercial practice. One certainly needs to know about contract and copyright law and other legal basics that one learns in law school are quite relevant, however about 90% of my day is spent on contract drafting and contract negotiations.
I also listen to a lot of music for both client development and personal reasons.
I do set up phone appointments and when I can, meet with clients personally to establish the lawyer client relationship, preferably if at all possible, at the initial meeting. That is still important. You cannot replace the face-to-face meeting- something is screened out by technology, even telephone technology, but I find more and more that I meet clients less and less, because of the Internet.
I spend many hours a day sending, receiving and reading e-mails – many of which are not billable. Regrettably we have no trade paper in Canada. We used to have two: RPM and The Record. Now there is no central source of industry information, so we look to various specialty e-newsletters and of course Billboard, which is very US centric, but is a trusted source of music business information. I suggest you read NextMedia on a daily basis and for general law, the Canadian Lawyer e-newsletter and the Ontario Reports. You also can read Moses Avalon's: “Moses Supposes” and Bob Lefsetz’s e-newsletters. Both of these individuals are industry commentators based in the US who provide interesting insights into the music industry, its current status and where it is going.
I still go to clubs and shows at night to meet with my clients and cement the lawyer client relationship. I lecture frequently. I write frequently. I teach at Metalworks Institute of Sound and Music Production, a private post secondary school specializing in music business training.
I do volunteer work. I sit on the board of the Toronto Blues Society and Artists and Lawyers for the Advancement of Creativity (ALAC) which runs Artists Legal Advice Services (ALAS). ALAS for those who do not know, is the first and longest running summary legal advice service in Canada. It provides free legal advice for artists of all disciplines, primarily in Toronto. If you would like to know more about the first 20 years of the history of ALAS, see my firm website www.sandersonlaw.ca under the “I Wrote the Book” section.
I also do quasi-litigious work, meaning that if I can't settle a litigious matter, it is referred to litigation counsel. I also do corporate work, such as the shareholder and partnership agreements and trademark work. I am a registered trademark agent. These types of services seem to go well with the solicitor based specialty entertainment law practice that I engage in to make my living.
At the international level, I do mostly licensing and sub-publishing deals in Europe, Japan and elsewhere and direct signings in Canada and the U.S.
I attended Midem regularly between the years of 1988 - 2,000 to further my clients interests at the annual music industry conference in Cannes, France, which is the largest music industry conference in the world. “Shopping” or soliciting talent seems to go with being an entertainment lawyer and I do some of that, on a very selective basis.
This is what I do to make my living practicing law in the entertainment field, specializing in music law in Canada, which I will have done for the past 30 years as of April 7, 2013.
IV WHAT IS IT LIKE TO PRACTICE ENTERTAINMENT LAW?
Well it is not for everyone.
If you practice the type of law that I do, a "transaction-based" business law model, you primarily will be drafting and negotiating contracts specific to the music industry.
That’s the way I define entertainment law. In fact, what I do is a specialty within a specialty, that is, “music law” is a subset of the larger area of practice which is entertainment law which includes film, TV, theater, book publishing, etc.
I don’t consider, for example, corporate tax for a large entertainment client as entertainment law, as some do. That’s corporate tax law! Not to say that you don't require some knowledge of basic corporate and tax law, you do.
Not unlike the record industry, my practice is based on volume and numbers. You need many clients in the arts and entertainment field to try and make a living as a practicing lawyer in the field.
How can you achieve this? By networking, going to conferences etc., being thoroughly knowledgeable about the music business, often to the point where you can help if your clients require business advice.
I am well aware that as lawyers we are not insured to give business advice, but it is impossible to practice law in the music industry or in arts and entertainment
law without a significant understanding of the business aspects of such specialty areas.
I often equate practicing entertainment law in private practice as being like running a recording studio. That is, a recording studio, like a law firm, needs small clients, developing clients as well as the larger corporate and established artist clients to keep the doors open.
Engaging in work in progress (WIP) is not unlike going for a swim in a river each day. The currents may be either calm, or raging. Most of my client work is often resolved within a matter of weeks, unless it is a more complicated negotiation, protracted litigious or contested trademark matter.
In many ways an entertainment law office is also like a central nervous system for the industry. All types of issues, legal and otherwise, arise. In fact, my practice can change in a heartbeat-within the hour, just as by analogy, my clients may not know where they may be from one day to the next.
One learns there is no perfect agreement. We don’t live in a perfect world. I recall a family law practitioner in my bar admission course saying, “Each side has to hurt a little for the deal to stick, otherwise it is likely that contract will find its way into court”. These are words that you can live by. It is difficult to understand the wisdom of these words until you experience them first hand. What we see is a media version of law – a glamorous winner take all system and indeed it is adversarial, but court is expensive and as a solicitor, you try to help your clients avoid court whenever possible. All law has dispute resolution at its heart and that ultimately means reducing the resolution of a dispute to the written word.
Ultimately practicing law means being part of a team, including the artist, label, publisher, publicist, booking agent, accountant, business manager etc. I enjoy seeing my clients showcase and perform at various clubs, music conferences, award shows including CMW, The Junos. It is rewarding to see your clients succeed. It feels good to be part of that success.
VI - THE MUSIC BUSINESS: THE PRESENT
You could state fairly accurately that the music business is often 80% hype and 20% reality. Not that that’s necessarily a bad thing. Without hype or more accurately, promotion, often nothing at all happens; but you have to be able to distinguish between the two in order to succeed.
Not surprisingly, music is a business built on rejection. The industry of “Nos.” Even the Beatles, the world’s most successful recording group ever, were turned down by every record label until they were finally signed by George Martin for Parlophone, a small subsidiary label of EMI which specialized in recording and releasing comedy records by Peters Sellers and the BBC’s Goon Show.
(Parlophone without the Beatles masters was recently sold for $765 million dollars).
These are interesting times indeed for the music and record industries. It’s a sobering reality - double digit decline annually in the Canadian and international record industry since 2002, although the IFPI recently reported a .3% increase. This is the first increase in ten years. (Page 1 - Billboardbiz Bulletin February 27, 2013)
But where there is crisis, there is opportunity. Just as technology creates problems and opportunities, it can solve problems and take away opportunities. For example, the rise of the Internet has resulted in the continuing decline of retail record stores. In Canada, A&A Records and Sam the Record Man, once both national retail record chains, do not exist. But ringtones, DVDs and legal downloads are now part of the music industry equation. Together they have helped slow the double digit decline of record sales in the record industry.
Where does Canada fit in? Canada has one of the highest per capita record buying populations in the world and is in the top seven countries economically in the world.
Canada remains the sixth largest record buying market in the world. It has approximately 3-5% of the world market. In contrast, the U.S. has approximately 30-35%. Canada is also behind Japan, Germany, France, and England.
Canada has been and is fortunate to be one of the countries globally that receives the most financial and structural support from government and industry for its cultural industries, which includes the music business. Such support includes funding programs such as Factor/Musiqueplus, Videofact, local, provincial and federal arts council funding, OMDC, other government initiatives Canada wide and a statutory and regulatory framework including Cancon requirements, that fosters Canadian music. The sum total of these has been instrumental in helping develop the music business in Canada as it exists today.
VI SOME CURRENT MAJOR TRENDS IN THE MUSIC BUSINESS
1. Not surprisingly, re-structuring and the merging of record companies continues.
2. The artist as a “brand” that partners with third parties outside of the music business for licensing opportunities, endorsements, sponsorships, commercial tie-ins, etc, is a major trend. It is no longer generally frowned upon to partner in such a way and has actually become a necessary part of the business.
3. 360° and multi-rights agreements are part of the music industry business model for both independent and major record labels. By definition a 360° deal encompasses every right and revenue source in the entertainment field including: the four major sources of rights and revenue in the music industry, namely: 1. recordings, including audio and audiovisual recordings; 2. music publishing; 3. live performance and personal appearances; 4. merchandising, endorsements and sponsorships; and “ancillary rights" and income; for example, from the artist's services as an actor, author, etc.
For more information on such agreements, you can go to my law firm’s website where I have posted an excerpt, in first draft form, which is an addition to Chapter 8, the Recording chapter from the upcoming fourth edition of “Musicians and the Law in Canada”.
4. Good management is more important than ever for artists because of the increasing complexity of the business.
5. DIY will continue. The “indie”pendents the “indie”vidualists. For example, think Amanda Palmer and crowd funding.
6. Increasing stratification in the industry - small artist labels doing specialty niche music, consolidated large record companies that need the next Lady Gaga will continue.
7. According to the Bryan Mead, INgrooves Senior Vice-President for Artist Services, “micro transactions and mass data accounting will become the new norm.” (February 28, 2013 Lyric Financial interview). Meta data will continue to be increasingly important as the record industry becomes even more based on digital transactions.
VII THE FUTURE- SOME PREDICTIONS – DANGEROUS, BUT FUN
1. The music business will keep getting more complicated. “Musicians and the Law in Canada”, is graphically illustrative. It was over 200 pages in its first edition in 1985, over 400 pages in 1992 and is over 600 pages in the third edition published in the year 2000. Will it be 800 pages in the 2014 edition?
2. The good news is that there are more resources, courses, schools, books, and on-line teaching aids than ever before that enable one to become educated about the music business.
3. Nothing short of exceptional will do in this increasingly competitive and global world. The music business has always been international, but is even more so now in the Internet era. You are now competing with the best internationally, not just locally, or even nationally. Because of this, the world will continue to shrink and the music and record market will continue to fragment.
4. It has always been the case that very few artists can succeed in Canada alone and have a sustainable career. The reality is that worldwide success requires a skilled team in all aspects of the business: live, recording, publishing, merchandising, and legal, accounting and management.
5. The cream rises to the top. Talent rules. The music business, the record industry and the world, needs great artists. Canada has some of the most successful artists in the world and I believe Canada will continue to be
competitive because of its talent, diversity and quality music, production and education.
6. There is still and will always be tension between art and commerce. Note there is a distinction between the music business and music. It’s easy to confuse music with the music business, but they are separate and yet can be interrelated. Note also that I don’t refer to the music business as the record industry. That’s because the record industry, although it is a significant part of the music business, is a part of the larger music business. This will continue to be an increasingly important distinction for the future.
7. I say to my clients: Be an artist. Do it because you love it. Pay attention to your art and craft from the mixes to the artwork, posters, website, throughout the whole process - everything and don’t underestimate the power of a song.
8. We in the music business and cultural industries generally, live by the Copyright Act. The right to own, reproduce, distribute and control the manufacture of copyright protected works versus the consumer’s right to access to such works is a continuing balancing act. This has been true ever since the days of the printing press through to piano player roles to CDs and DVDs, downloads, streaming and is true in the Internet era.
9. Despite the Internet and predictions of the futurists, copyright laws will not go away soon. The vested interests of private property, a fundamental building block of our society, will not give up the fight. Nor will contract law go away. These basic legal foundations will subsist and their principles will continue to apply. What is the alternative? What is the better system? No rights? No remuneration?
10. Copyright is necessarily a limited monopoly: the creator’s right to own copyrights and be remunerated versus the right of consumers to access copyright protected works. This tension will not subside. It is inherent in the Copyright Act and is particularly evident every time a major technological change that fosters copying or distribution occurs.
11. Ideally there will be a balance of consumer access, copyright protection and respective remuneration and the dividing line will constantly evolve due to public demand, demands of the marketplace and technological and legal evolution.
12. Copyright law reform will continue to be a priority, not only for the music business, but for businesses that are intellectual property related and which continue to ever increasingly contribute to western industrial nations’ gross domestic products and employment.
13. The truth is often a shade of gray, not black and white. The answer lies in balancing the competing interests of companies, artists and consumers. For a
truly viable music business we need viable companies, talented artists and consumers.
14. There will be music and a music business. If you ever watched a TV show or a film, or played a video game without music, you will know what I mean. People want and need music. The future of the world without music is not as livable. In fact, I believe music will continue to be more and more ubiquitous and is integral in our future society.
As we're all aware, the computer revolution, the digital era, is here. It is not just in the music business, but worldwide throughout all society. The change is exponential and we are only are at the beginning, the early stages of this era.
No one can really predict the future with absolute certainty. Ultimately, the future is in your hands. The future is now. You have the opportunity to invent the future as you forge your own careers.
Work hard. Play hard. Have fun and remember:
1. “Get it in writing”;
2. “You don’t get what you deserve, you get what you negotiate.”
If you would like a copy of this keynote address visit www.sandersonlaw.ca where it will be posted or e-mail this request to email@example.com.
Copyright, Paul Sanderson, 2013.