U.S. copyright law contains provisions specifically directed at the entertainment industry. For example, the songwriter—or the copyright holder, if the songwriter has transferred the song's copyright or created the song as a work for hire—decides who can first record a song for publication. However, once the song has been recorded and published, the copyright holder may no longer limit who may record the song. If a song's copyright owner has previously granted permission to someone to record a song or if the songwriter has recorded and commercially released a recording of the song, the copyright holder is required by copyright law to grant a license to anyone else who wants to record that song. This is called a compulsory license. A licensee who records a song under a compulsory license is required to follow strict statutory guidelines for notification of its use and reporting sales and royalties to the copyright holder. The fee for a compulsory license is set by Congress at a few cents per recording manufactured, and is adjusted for inflation every few years.
Another primary contract in the entertainment industry is the contract for rights. This contract often involves a transfer of copyright ownership or a license to use certain creative property (e.g., a song or photo).
Many times, a contract for rights is combined with a personal service agreement. The agreement will often state that any work created by the artist during the term of the agreement is considered a work for hire. The company with whom the artist has contracted often receives automatic ownership of the copyright to a work for hire. For a work for hire to exist, the artist must either be an employee of the company or create the work pursuant to a valid written agreement—and even then the work must fall within a few specific categories defined by copyright law.
