January 07, 2015 Articles

Unpaid Royalties on Pre-1972 Recordings: Mony Mony!

In the absence of federal copyright protection, owners of pre-1972 recordings may turn to state law to collect unpaid royalties

By Michele M. Riley and Erich Kirr

The Recording Industry Association of America reported that in 2013, the United States music industry was stable at $7 billion in revenue, with music streaming revenue representing $1.4 billion of that total. Joshua P. Friedlander, News and Notes on 2013 RIAA Music Industry Shipment and Revenue Statistics. The growth in music streaming services and the song suggestion capabilities built into the services (e.g., Pandora's Music Genome Project) have increased popularity among listeners of both old and new songs alike. In fact, according to IBISWorld, in the Internet radio broadcasting industry, 13.5 percent of the songs played are in the "popular 1960s, 1970s and classic rock" category. David Yang, IBISWorld Industry Report OD5987: Internet Radio Broadcasting in the US (Aug. 2013).

This continuing popularity of older works and the ready availability of such songs on streaming services has also led to great interest from musical groups and music publishing companies regarding unpaid royalties owed to groups that recorded works prior to February 15, 1972 (pre-1972 recordings), which are ineligible for copyright protection under federal law. In September 2014, Judge Philip Gutierrez granted summary judgment to the founding members of the music group the Turtles in the lawsuit they brought against Sirius XM Radio for unpaid royalties on their 100 original master recordings, which are all pre-1972 recordings. Order Granting Plaintiff's Motion for Summary Judgment, Flo & Eddie Inc. v. Sirius XM Radio Inc., No. 2:13-cv-05693-PSG-RZ (C.D. Cal. Sept. 22, 2014), ECF No. 117. While damages in the matter have yet to be decided, this ruling opens the door for more unpaid royalties litigation from other owners of pre-1972 recordings.

This article will discuss: (1) the evolution of copyright law as it relates to pre-1972 recordings, (2) certain of the current cases brought by copyright owners alleging unpaid royalties on these recordings, (3) the expected magnitude of such unpaid royalties, and (4) potential red flags to be aware of when attempting to perform an accounting of unpaid royalties on these pre-1972 recordings, which are "sold" in both physical and digital form.

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