Music Promotion Regulatory Frameworks & Compliance 3 — Questions and Answers
Question 1: What is 'payola' and why is it illegal under US federal law?
- Undisclosed payment to radio programmers to play a song, violating FCC regulations on sponsored content (Correct answer)
- Paying streaming platforms to feature songs on playlists, which violates antitrust law
- A practice of bribing music journalists for favorable reviews, violating FTC rules
- Paying venue owners for guaranteed bookings, which constitutes commercial bribery
Correct answer: Undisclosed payment to radio programmers to play a song, violating FCC regulations on sponsored content
Payola is the practice of paying radio stations or DJs to play songs without disclosing the payment, violating FCC requirements that all sponsored airplay be identified on-air.
Question 2: A record label releases an album featuring samples of multiple songs. Who must grant permission for the sampled compositions?
- The music publishers who control the underlying compositions (Correct answer)
- The original performing artists
- The Recording Industry Association of America (RIAA)
- The US Copyright Office
Correct answer: The music publishers who control the underlying compositions
Sampling a composition requires a license from the music publisher or songwriter who owns the composition copyright, separate from any master recording clearance.
Question 3: Under GDPR, what must a music streaming platform based in the EU do before collecting user listening data for targeted marketing?
- Obtain explicit, informed consent from users before collecting and processing their personal data (Correct answer)
- Notify the European Commission within 30 days of data collection
- Anonymize all data before any use in marketing
- Store data exclusively on EU-based servers with no exceptions
Correct answer: Obtain explicit, informed consent from users before collecting and processing their personal data
GDPR requires a lawful basis for processing personal data, and explicit consent is typically required for marketing purposes, meaning users must actively opt in.
Question 4: What is the '35-year termination right' under US copyright law and who benefits from it?
- Songwriters and artists can reclaim copyright ownership from labels/publishers 35 years after the grant was signed (Correct answer)
- Labels can terminate artist contracts after 35 years without penalty
- Public domain status is granted automatically 35 years after a song's release
- Mechanical royalty rates reset to statutory rates after 35 years
Correct answer: Songwriters and artists can reclaim copyright ownership from labels/publishers 35 years after the grant was signed
Section 203 of the Copyright Act allows creators to terminate copyright grants to labels and publishers 35 years after execution, reclaiming ownership regardless of contract terms.
Question 5: An independent artist wants to distribute music to Spotify without a label. Which entity typically handles the statutory mechanical license obligations to publishers?
- The digital music distributor (e.g., DistroKid, TuneCore) or the platform itself via a blanket MLC license (Correct answer)
- The artist personally must file with the Copyright Office
- ASCAP or BMI covers mechanical licenses through their agreements
- No license is needed for self-released music on streaming platforms
Correct answer: The digital music distributor (e.g., DistroKid, TuneCore) or the platform itself via a blanket MLC license
Major streaming platforms obtain blanket mechanical licenses through the MLC, covering independent artists' music distributed via aggregators without the artist needing to file separately.
Question 6: What is the primary purpose of a 'controlled composition clause' in a recording contract?
- To reduce the mechanical royalty rate the label pays when the artist also wrote the songs on their own album (Correct answer)
- To give the label editorial control over the artist's songwriting process
- To prevent the artist from releasing songs written during the contract term on other labels
- To ensure the artist's compositions are registered with a PRO
Correct answer: To reduce the mechanical royalty rate the label pays when the artist also wrote the songs on their own album
Controlled composition clauses reduce mechanical royalties—often to 75% of the statutory rate—when the artist is both the performer and the songwriter, saving the label money.
Question 7: A concert venue sells merchandise featuring an artist's name and likeness without permission. Which legal claim is most applicable?
- Violation of the artist's right of publicity (Correct answer)
- Copyright infringement of the artist's musical works
- Trademark dilution under the Lanham Act
- Breach of the artist's recording contract
Correct answer: Violation of the artist's right of publicity
The right of publicity protects individuals from unauthorized commercial use of their name, image, or likeness, making unlicensed merchandise using an artist's identity a violation of this right.
Music Promotion Regulatory Frameworks & Compliance 3
What is 'payola' and why is it illegal under US federal law?