This is a legal guide that I first wrote and published on Avvo earlier this month. I have linked the information below for reference.
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The underground hip hop and rap music industry can be one of the toughest industries to find success especially if one is clueless on how the music game operates. This guide identifies four (4) things the hip hop artist must consider in order to be in the music game as a business instead of a hobby.
1. Financing of the Project
How will the music be made? An artist can either self-finance or finance through a record company. If the artist is financing the project, then the artist will want to consider forming a legal entity (LLC or corporation) in the State where the artist will be conducting the business operations. This entity will provide certain liability protections and can handle the recordings and the publishing. Some people set up multiple entities for these purposes. Having a legal entity shows a level of professionalism. An artist does not need to have significant monies to run a record label, but it certainly helps, because the artist-label will need to pay for studio time, producers, musicians, sample clearances and mechanical royalties. The artist will also need money to retain an attorney and CPA to handle certain matters. If a record company finances the project, then the company will likely own/control the rights in the recordings and the attorney should review all such recording agreements.
2. Ownership of the Materials
The person who controls the copyrights in the music controls the exploitation of that music. There are 2 main copyrights for music: the sound recording (masters) & the underlying musical composition (publishing). The artist will own both copyrights when self-financing. The label will own the masters and some % of the publishing when the label finances. I recommend that my clients finance their own projects, or secure deals where they are not employees and do not have to assign their copyrights. The artist should have contracts and split sheets with every person who performs a service. These contracts should have work-for-hire language to ensure the artist owns the rights in the contributed works. There is still some argument whether sound recordings qualify as works-made-for-hire, so the artist will also need to include an irrevocable assignment. There may be payment obligations with using union musicians. Consider ADR for dispute resolution, so matters are private, not public record.
3. Marketing and Promotional Campaigns
Marketing is essential to increase the sales of music and ancillary materials. The artist must market and promote the music. Marketing can come in many different forms from ads, promotional appearances to social media. I tell artists to conquer their cities block by block and street by street. Once the artist conquers the city, the goal should be to conquer the State, the region, the nation and then the world. If the artist is talented and cannot conquer where they currently are, then move to a different place. Touring can be a steady income stream for many artists. The artist should tour in places where there is demand, and hit up local radio and mixshows too. The artist should also do fan contests and sweepstakes to collect marketing data and information. Blogs are huge in the hip hop game, so it is always good to have relations with outlets that share a similar audience and fan base. The artist should give a shout-out to any media that gives the artist's material a fair review.
4. Ancillary Exploitation and Branding of the Artist and Music
Many music artists are not content with just being musicians. They want to expand into other ancillary areas such as movies, television, web, theater and politics. An artist must properly brand himself and his music if the artist wants to have these ancillary opportunities. I came of age in the 1980s and 90s, and we used to call this "cross-over appeal" because the artist could become bigger than just the music. Think artists like Jay Z (sports agent) or Diddy (alcoholic beverages) who today have expanded their brands outside of music. Most new artists understand this from a conceptual level in that they want to be famous, but they do not know that fame is a function of the artist's branding efforts across various product and service categories. Choosing the performing name is the biggest decision to be made. The name and likeness should be memorable and eligible for trademark protection across the standard categories in merchandising, publishing, music, video games and multimedia.
5. Conclusion
The artist should retain a qualified music attorney before entering into any agreement with any other party. A qualified attorney will be a key asset to the artist's team, because the attorney will be able to review agreements and provide overall guidance for the artist's career. A classic song is eternal and every musician I have ever met dreams of making a classic song. Therefore, the song and the bad deal the artist makes today could have ramifications for years, if not decades. Please do not be that musician who makes a classic song, but does not get to reap the benefits because he did not have his legal affairs in order.
About: Joseph Ford is a sole practitioner who provides legal advice in connection with entertainment licensing, distribution and production, including merchandising, publishing, copyright, trademark and piracy. Currently, Mr. Ford also serves as a Legal Consultant for NBCUniversal Media, where he provides licensing counsel to television shows such as Downton Abbey and Sharknado, advising high-level executives and attorneys, and in addition, has closed numerous transactions with high-profile companies. Joseph is a member of the California Bar and is a licensed patent attorney.
