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 countries other than South Korea, it’s probably challenging for individuals to manage their copyrights as well. As previously explained, the classes of rights and methods for exercising copyright are quite diverse and complex for individuals to handle. Therefore, most music copyright holders entrust copyright management to organizations or companies through contracts. Generally, music copyright management is carried out through two types of 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 by 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 holders.

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 those rights. However, due to the complex nature of performing rights and the need to obtain a blanket license with broadcasters, transmitters, and performing organizations through collective negotiations, individual rights holders are likely to be at a disadvantage 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, can be exercised 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 involves 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. Consequently, 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 monopolistic effect, and when internal operational irregularities and illegal activities occurred, the South Korean government granted 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, along with a music copyright trust service organization. It is known as 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 conduct licensing 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 contracts.

Music publishers became copyright management companies because, before the development of recording, music publishing and distribution were handled 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 numerous hit repertoires. Composers who depended on music publishers were called contracted composers.

The music publisher wanted to have as many contracted composers as possible. By hiring numerous contracted composers and providing them with studios equipped with pianos, music publishers created a system of mass production for music. The Broadway alley in New York was noisy with the sounds of contracted composers 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 major organizations for American music rights management. As such, music publishers play a significant role in the history of copyright management organizations.

In contrast to the United States, music publishers in South Korea are not influential in the industry. This is because South Korea’s copyright management system is centralized. The reason for this is that the copyrights of many music authors are held in trust by a single government-authorized organization, making it convenient for users to obtain a license from this organization. Therefore, music publishers have no room 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 for 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