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You are here: Home > Current Topics > Mind your Business > 28 February 2005 |
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Image: 'The King' in action. Fans of Elvis will have been celebrating the fact that 'The King' hit the charts once again in 2005. His single 'One Night' became the 1,000th UK number one in January 2005, and his 20th chart topping single. Elvis Presley died on August 16th 1977 in circumstances that shocked fans - his problems with drugs, weight and depression have since been well documented. For his family and his fans, however, he left a legacy that continues to be a major force in the music industry. Few artists do not pay some sort of homage to the man who courted controversy throughout his career, upsetting the establishment with his on stage gyrations but then becoming their darling following his entry into the US military. 
Image: Lisa-Marie Presley (left) still owns Graceland and all her father's personal possessions but the deal with SFX has left her $100 million richer! His legacy includes his estate - the famous Graceland mansion in Memphis, Tennessee - and of course his back catalogue of music. The industry that surrounds Elvis goes on despite his death. The 1000th number one is just one single in a series that has been released in recent months by the BMG-UK group which has included such classics as 'All Shook Up', 'Jailhouse Rock' and 'Are You Lonesome Tonight'. BMG are releasing one special edition single each week between January 3rd and April 25th 2005, to celebrate the 70th anniversary of his birth. The singles are presented as a limited edition issue with special features designed to imitate the original 7″ vinyl issues. Estimates put the global volume of Elvis' record sales at over 1 billion - more than any other recording artist. The rights to Elvis' music are owned by RCA which in turn was bought by the Bertelsmann Music Group (BMG) in the 1980s. The ownership of the rights to the music, and where the royalties go is quite complex and highlights the issues over property rights in the music industry and in part links in with the controversy that has been raging over illegal music downloads. BMG recently completed its merger with Sony music to become Sony BMG. In December 2004, an announcement was made that Elvis Presley Enterprises Inc. (EPE) had sold an 85% share to the SFX group owned by Robert F.X. Sillerman. The SFX group represents sports and music stars around the globe, most famously being involved with David Beckham in the UK but managing and representing other stars such as Gary Lineker, Alan Hansen, Greg Norman, Andy Roddick, Michael Jordan and Alan Shearer. SFX paid $100 million for EPE although the sale does not include Graceland itself or any of Elvis' personal belongings which are still in the hands of Lisa-Marie Presley, Elvis' daughter. |
Image: A river - who owns it and does it make a difference if ownership can be established as to whether it is less likely to be exploited and damaged? Copyright: Remi Garneau, stock.xchng
Property rights have a wide range of effects and influences across business. Property rights are the rights to ownership of property - strangely enough - but this relatively simple definition hides a huge range of issues that impact on the environment, product development, knowledge ownership and transfer and, of course, the music industry.
A simple way of understanding property rights is to take a personal example. If I owned an Apple iPod (the ownership being proved by the receipt from the shop with traceable identification of, for example, the credit card on which it was bought) and you picked it up and threw it to a friend in jest but in so doing smashed it, I would have a good case to expect you to replace the item. Your actions will have damaged my property and I could expect some compensation for this. The very fact that you knew that you could be involved in some form of action against you (whether through some private agreement or if I chose to use the courts to back up my claim) helps to make people think twice about the actions they take.
Establishing property rights is an important legal and economic concept, therefore. If we could establish property rights over the sea, for example, we could take steps to help reduce the over-fishing that is currently alleged to be going on. If, for example, a quota was placed on the amount of fish to be removed from a body of water owned by Norway and fisherman were caught taking more than the specified legal amount, the fisherman concerned could be prosecuted - you would be able to pin down who is causing the damage to who and thus gain some form of compensation for the damage caused.
Image: Making music is fraught with copyright issues not least through people downloading music illegally - is technology the saviour or the destroyer of music in the 21st century? Copyright: Franco Giovanella, stock.xchng
Establishing property rights, however, is not as easy as it sounds in many cases. Who does own the sea? Who owns the rivers in the UK, who owns the air we breathe? These are all very difficult questions to answer but are very important to resolve if we are to have an impact on some of the most pressing issues that face the planet.
On a less global level, the issue of property rights is increasingly important in an age where knowledge transfer is important. Many people in the UK work in businesses that deal with information and knowledge. This knowledge is often bought and sold or moved from one type of organisation to another. It has value and in some cases can be extremely valuable. In the same way that you would not be allowed to take a Mars bar out of its wrapping and put it into your own wrapper and sell it as something else, there are restrictions about who is able to use different types of knowledge and information and for what purpose.
One especially tricky area of knowledge management and transfer is intellectual property rights. Intellectual property is the ideas and products of those ideas produced by an individual and the right of that individual to be able to establish the right of ownership of those ideas. For example, an author writing a novel has developed the characters, the plot and the story line - they are ideas as opposed to a physical product which is represented by the book.
The author has to establish the right to the ownership of those ideas, characters, etc. Another author, therefore, cannot come along and write a novel about those characters or the ideas contained in the book. I could not, therefore, write a novel on Harry Potter without the permission of J.K. Rowling who owns the intellectual property to Harry and the whole Hogwarts thing!
Such intellectual property extends to the use of images, video, news items, inventions, techniques, logos, trade marks, names and so on. Such rights allow the owner to be able to gain recognition for their work and to receive some reward for when the item in question is used.
Property rights in the music industry can be a complex issue. A hit single, for example, can incorporate a range of property rights issues: the singer or the band may have rights over the use of their name; the song writer may have some rights but the song writer may not have also written the lyrics; the rights to those may be owned by someone else; the firm who published the song may have other rights; and it may be that the performer has very little rights over the song they made famous - that right might belong to the record label.
Looking at the property rights in the case of Elvis might help to unravel some of these issues.
Elvis was under contract to the record label RCA. RCA owned the rights to Elvis' recorded songs and Elvis himself received a royalty for each record sold. This continued up to 1973 when Elvis made a deal with RCA who paid him a lump sum of $5.4 million. In return Elvis sacrificed the royalties earned on sales of recordings made before March 1973, hence RCA would, in future, take all the earnings from his work prior to that date.
Any records made after March 1973 continued to attract royalties for Elvis. It was not the ownership of the records that Elvis negotiated because Elvis never owned any of these records. If, therefore, RCA decided to put out a record which it owned (say an old version of a song Elvis recorded before he became famous) which Elvis did not like, it would be RCA's decision not Elvis. Of course, most record labels try to work with the artist but if they felt there was commercial value in doing such a thing they did not have to seek permission of Elvis because they owned the rights to the song.
The ownership of the songs themselves comes under a different regime. If another artist wanted to record a version of, for example, Jailhouse Rock, they would not have to ask permission of RCA but the company who owned the rights to the song itself - the music and the lyrics - not the recording made by Elvis.
That ownership will be in the hands of a publishing company. In some cases, the artist will have some involvement in the ownership but not necessarily. EPE currently owns many of the publishing rights to Elvis' songs, so if an artist wishes to make a recording of Jailhouse Rock, they will need to get the permission of EPE (and, most likely, pay a fee!).
It's a complicated situation, so here's a quick summary of who owns what:
| What? | Who owns it? |
| The rights to recordings of all Elvis' songs | RCA |
| The royalties on recordings of Elvis' songs made after 1973 | Elvis Presley (now EPE) |
| The rights to Elvis' songs' music and lyrics | EPE |
Many schools and colleges will put on plays and performances during the course of the academic year. To do this, the institution needs to get the permission of the various groups who may own the rights to the play, musical or whatever and will have to pay a fee for the right to use it. The fee then goes to help reward the original playwright, musician and so on who own the intellectual property rights.
