CHELSEA, MANHATTAN: The long arm of the law reaches out and grabs even us creative types some times. In fact, having a lawyer on speed dial should indicate that there’s good stuff going on — contracts, licenses, and publishing deals must be flying around, right? New York City entertainment legal eagle Elliot Resnik, who lends his talents to such producers as Ben H. Allen and Mike Hartnett, artists as diverse as Ferry Corsten, Starkillers, Lez Zeppelin, The Kin, and record labels as Chocolate Industries, Plant Music and Definitive Jux.Net, sees a legal landscape that’s rapidly changing in the music industry.
Resnik started his own Manhattan-based practice in 2003 after learning the intricacies of the label side at TVT records. He’s a frequent panelist at seminars, and with good reason — he loves to talk about music and business.
Q: What’s fun about being in entertainment law in 2009?
A: What makes my practice so enjoyable now is that the ground is shifting so rapidly in so many respects. It’s a continuing refinement of music distribution and technology that has turned the industry paradigm that existed for 40 years on its head. You’re able to get content that much faster, and it’s much more about promoting the artist in all their endeavors than the record itself.
Now we’re coming out of this phase where piracy was incredibly rampant — Napster, Grokster — and that’s making things interesting for me from the artist-lawyer perspective, as well as the label attorney side. In some respects, things are shifting towards the 360 degree deal — touring, record sales, merchandising and publishing: The largest labels can’t rely purely on record sales to support their model, and their model is about a big push in terms of marketing and promotion and terrestrial radio when a record is really working, as opposed to working blogs, internet radio and the iLists of the world which can be viewed as a more indie zone. Now, labels want to aggregate more rights, whereas before they could eat off of the record sales to make their model work.
This is one of those evolutions of the industry that makes it challenging. Artists and producers may have one ideal, the reality of the business landscape is another ideal, and it’s only where the twain shall meet that you can have a successful run at it.
What’s making the legal landscape for producers and artists more complex now? How do you have to evolve to handle it?
In respect to the producer, what’s making the legal landscape more complex is both a question of record label economics, and secondarily a question of technology. Although the two are intertwined, it’s technology that keeps pushing down the price of the record products. Thus, with diminished returns on records, record labels have less to spend on making records, and producers are working with smaller budgets and fees.
Frankly in 2009, in this economic crisis, our sector of the entertainment industry has been significantly impacted. Music is a luxury, not a necessity. And despite the large efforts to counter-act the trend, people are still stealing music and I don’t expect that to change without serious intervention at the ISP level through legislative action.
So as an entertainment lawyer, the challenges are staying abreast of the fundamental business changes that are happening and how the same are addressed in legal documents. But also it’s looking for deals for my clients, and understanding the workings of the industry as the new economics continue to evolve.
In your opinion, what can producers, artists, audio engineers, etc. do to best prepare themselves to navigate the legal hurdles of their professions? When should they bring in a lawyer?
All of these categories, with the limited exception of engineers because of the nature of their business, should know and understand the deal before they sign it.
Let me address parties that work on an advance/royalty basis. Whenever I’ve got producers going into a studio scenario, you have to examine who the other party is. A producer, if they’re hired by a proper label to produce a record, for example, you pretty much know the deal before going into the studio. But in respect of producers working on spec, many seem to let it develop organically and put focus on the creative process as if to say, “I’ve met a band, I’ve got a studio, let’s cut a couple of tracks and see where it goes.”
In all those scenarios, they should balance the creative and the professional ends. But that’s challenging for these guys. It’s tough to juggle the two split personalities, the creative and the business.
For an artist working on spec with a producer, they should know what the deal is, because they might not own the masters they just spent a month slavishly working on. When a producer says, “Let’s go to the studio and cut stuff,” understand that’s what the producer does, that’s their career.
As opposed to producers and mixers who can command royalties for their work, engineers are usually paid a flat fee on a day-to-day basis. The artist should understand the deal of the producer/studio that’s being hired there. The legal hurdles are sometimes diminished by the amount of experience that each party has. Then it’s about the business hurdles, rather than the legal hurdles.
What makes sense for this person?
They may be a Grammy-winning producer working for less than their usual rates because the artist is the hottest new band and they really want to do the record. In almost any deal, if both parties come to the table feeling like they gave something up and got something, then both parties will walk away with some satisfaction.
The point to bring an attorney to the party is when the business end of things needs to be addressed, although the pace at which the artist and producer can make something really hot often outpaces the pace at which their respective management and legal representatives can get the deal papered and signed. So if the project is going smoothly because of the clarities that the parties achieved at the onset, it should be easier to get through the process.
On the other hand, if those issues aren’t resolved — the main issues — there could be problems. By that I basically mean, “What is the fee/advance and royalty structure?” “How many tracks?” “Who’s paying for the studio?” Not working that out makes it difficult to stay immersed in the recording process.
So the short answer is to bring a lawyer in as soon as possible, as the process is going smoothly. But the worst time to bring a lawyer in is when all the work is done and the attorneys have to figure out issues that could have been addressed earlier and make each party’s life a bit easier.
Sounds like sage advice! What makes NYC a unique place to work from a legal standpoint?
As a transplant who came here for law school and the music business, I love to joke that NY is the capital of the Earth. And we’ve got one of the best music scenes in the world, with both new talent and legendary artists playing every night from the smallest venues to Madison Square Garden. It’s an exciting city, but the vibe is different from LA. Here, running an entertainment law practice in a city that?s not as dominated by the entertainment industry as LA makes life a little more interesting and balanced. That said, I try to remember that any deal can change in a New York minute so it makes you stay on your toes.
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