A K-pop-based Explanation of Music Copyright Part 8.

Posted by Joseph Hwang Joseph Hwang 8/19/2024

A K-pop-based Explanation of Music Copyright Part 8.

Joseph Hwang

K-pop-related music copyrights are tough for individual copyright holders to exercise and manage. In other countries besides South Korea, it's probably supposed to be challenging for individuals to exercise and manage their copyrights. As previously explained, the classes of rights and methods of copyright exercise are quite diverse and complex for an individual to manage. Therefore, most music copyright holders entrust music copyright management organizations or companies through contracts. Generally, music copyright management is carried out through two organizations: music copyright management organizations and music publishers.

The Korean Copyright Act provides for a “trust service” in which the copyright holder transfers the copyright to a non-profit organization for a certain contract period and then returns the copyright when the contract ends. “Trust” is a legal exercise of rights in which the right holder transfers property rights to the management organization (trustee) and receives a share of the profits from the exercise of the property rights during the contract term. Of course, the management organization returns a management fee from the revenue generated from the exercise of the property rights, and the contracted rights are transferred back to the original rights holders at the end of the contract. Therefore, during the term of the trust contract, the original right holder is not the right holder, the contracted management organization becomes the right holder instead of the original rights holder.

Even if the individual rights holder does not enter into a trust agreement with a music copyright trust management organization, he or she can still exercise the rights. However, due to the complex concept and process of performing rights and the need to exercise a blanket license with broadcasters, transmitters, and performing organizations through collective negotiations, individual rights holders are highly likely to be disadvantaged compared to those managed by a trust management organization.

1. Music Copyright Trust Management Organization

A music copyright license by the individual copyright holder endowed with legal knowledge or assistance from an expert is possible to exercise without hardship. This is because the phonogram producers can determine the number of records to be copied and distributed, and the license is granted within a limited and controllable range of the producers. This is called a mechanical license. However, it is difficult to determine the frequency of use or measure the scope of music copyright exercise for performances, digital transmissions, and broadcasting because the form of use is for an unspecified number of people. Therefore, the Copyright Act stipulates that the business operator must first use the music for performances, digital transmissions, and broadcasting and pay remuneration with an annual blanket license. Therefore, the music copyright trust management organization is necessary for collective negotiations.

A music copyright (including neighboring rights) trust service must obtain permission from the Minister of Culture, Sports, and Tourism, and an agency and brokerage service must report and register with the Minister of Culture, Sports, and Tourism (Article 105, Paragraph 1). The South Korean government permitted only one organization because the music copyright trust service organization was inconvenient for users when the rights management organizations were divided. However, designating only one organization resulted in a monopoly effect, and when internal operational irregularities and illegal activities occurred, the South Korean government gave permission to another organization. For that organization, please refer to the reference below.

2. Music Publisher

The Korean Copyright Act provides for a company that regulates agency and brokerage services with a music copyright trust service organization. It is called a music publisher. A trust service must obtain permission from the government, but an agency and brokerage service can operate as long as a for-profit company registers with the government.

Since it is difficult for music authors to do the license business alone, most authors join a trust service organization or sign a contract with a music publisher to manage their copyrights. However, moral rights are not subject to contract.

Music publishers became copyright management companies because, before the development of recording, music publishing and distribution was done by music publishers who published sheet music. Music publishers made a lot of money by selling scores when a composer's song became a hit, so they signed exclusive contracts with composers who wrote many hit repertoires. Composers who were dependent on music publishers were called contracted composers.

The music publisher wanted to have as many contracted composers as possible. By hiring many contracted composers and providing them with studios equipped with pianos, music publishers created a system of mass production of music. The Broadway alley in New York was noisy with the contracted composers' sound of playing pianos all day, so 28th Street on Broadway in New York was called “Tin Pan Alley”. Here, composers and music publishers interacted and gathered to form the American Society of Composers, Authors, and Publishers (ASCAP), one of the two mountain ranges of American music rights management organizations. As such, music publishers play a very significant role in the history of copyright management organizations.

In contrast to the United States, music publishers in South Korea were not influential in the industry. This is because South Korea's copyright management system is centralized. The reason for this was that the copyright of many music authors was held in trust by a single government-authorized organization, and it was convenient for users to obtain a license from that organization. Therefore, the music publishers had no space to intervene between the music authors and the trust management organization. The concept of music publishers began to emerge when major global record labels entered South Korea.

Due to this historical or legal background, Korean music publishers began their activities as sub-publishers of trust organizations. It is as if the trust management organization is the master publisher and the music publisher is the sub-publisher.

* References and quotations:

- Music Copyright Trust Services Organizations

KOMCA

https://www.komca.or.kr/foreign2/eng2/K0101.jsp

KOSCAP

http://www.koscap.or.kr/english/greeting

- Performers' Neighboring Rights Organization

Federation of Korean Music Performers

https://www.fkmp.kr/eng/

- Phonogram Rights Organization

RIAK

http://riak.or.kr/index.php?tpf=main/index