Rupa Marya v. Warner Chappell Music Inc

Filing 63

DECLARATION of Betsy C. Manifold in support of plaintiffs' opposition MOTION to Dismiss Second Amended Consolidated Class Action Complaint and/or Motion to Strike Plaintiffs' Proposed Class Definition 52 filed by Plaintiffs Good Morning to You Productions Corp, Rupa Marya, Robert Siegel. (Attachments: # 1 Exhibit 1-3, # 2 Exhibit 4-5, # 3 Exhibit 6)(Manifold, Betsy)

EXHIBIT 4

EX.4
25

Tble of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
(Mark One)

El

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended September 30, 2011
OR

D

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from

to
Commission File Number 001-32502

Warner Music Group Corp.
(moot nome of Regintrant no opecified in ito chorier)

Delaware

13-4271875

Stale or other jnrkdictinn of
incorporation or organization)

I.R.S. Etnplovrr
ldrnlilicalion No.)

75 Rockefeller Plaza
New York, NY

10019

(Addreoo of principal roeratioe offieo)

Zip Code)

Registrant’s telephone number, including area code: [phone]
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Secunties Act.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act,

Yes D

Yes El

No El

No 0

Indicate by check mark whether the registrant (I) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes 0 No El
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulations S-T (232.405 of this chapter) during the preceding 12 months (or for shorter period that the
registrant was required to submit and post such files), Yes El No U
Indicate by check mark if the disclosure of delinquent filers pursuant to Item 405 of Regulation S-K(229.405 of this chapter) is not contained herein.
and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part Ill of this
Form 10-K or any amendments to this Form 10-K. El
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of large accelerated tiler,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act,
Large accelerated filer U
Non-accelerated filer El
(Do not check if a smaller reporting company)

Accelerated filer U
Smaller reporting company U

Indicate by check mark whether the registrant is a shell company (as defined in Rule l2b-2 of the Exchange Act.)

Yes U

No El

There is no public market for the Registrant’s common stock, As of December 8,2011 the number of shares of the Registrant’s common stock, par value
S0.OOl per share, outstanding was 1,000. All of the Registrant’s common stock is owned by Al Entertainment Holdings LLC (formerly Airplanes Music
LLC), which is an affiliate of Access Industries, Inc.

EX.4
26

Tab’e of Contents

Music Publishing (19% of consolidated revenues, before intersegment eliminations, for the twelve months ended September 30, 2011 and 18% of
consolidated revenues, before intersegment eliminations, in each of fiscal years ended September 30, 2010 and September 30, 2009)
Where recorded music is focused on exploiting a particular recording of a song, music publishing is an intellectual property business focused on the
exploitation of the song itself. In return for promoting, placing, marketing and administering the creative output of a songwriter, or engaging in those activities
for other rightsholders, our music publishing business garners a share of the revenues generated from use of the song.
Our music publishing operations include Warner/Chappell, our global music publishing company headquartered in New York with operations in over
50 countries through various subsidiaries, affiliates and non-affiliated licensees. We own or control rights to more than one million musical compositions,
including numerous pop hits, American standards, folk songs and motion picture and theatrical compositions. Assembled over decades, our award-winning
catalog includes over 65,000 songwriters and composers and a diverse range of genres including pop, rock, jazz, country, R&B, hip-hop, rap, reggae, Latin,
folk, blues, symphonic, soul, Broadway, techno, alternative, gospel and other Christian music. In January 2011, we acquired Southside Independent Music
Publishing, a leading independent music publishing catalog, further adding to Warner/Chappell’s catalog. Warner/Chappell also administers the music and
soundtracks of several third-party television and film producers and studios, including Lucasfilm, Ltd., Hallmark Entertainment, Disney Music Publishing
and Turner Music Publishing, In 2007, we entered the production music library business with the acquisition of Non-Stop Music. We have subsequently
continued to expand our production music operations with the acquisitions of Groove Addicts Production Music Library and Carlin Recorded Music Library
in 2010 and 615 Music in 2011.
12

EX.4
27

Tarte of Contents

Music Publishing Portfolio

Representative Songwriters
Michelle Branch
Michael Bublé
Eric Clapton
BryanMichael Cox
Dido
Dream
Kenneth Gamble and Leon Huff
George and Ira Gershwin
Green Day
Dave Grohl
Don Henley
Michael Jackson
Claude Kelly
Lady Antebellum
Led Zeppelin
Lil Wayne
Little Big Town
Madonna
Maná

James Otto
Johnny Mercer
George Michael
Van Morrison
Muse
Tim Nichols
Nickelback
Harry Nilsson
Paramore
Katy Perry
Plain ‘White T’s
Cole Porter
Radiohead
The Ramones
REM.
Damien Rice
Alejandro Sanz
Stephen Sondheim
Staind

I95O and Prtor

Summertime
ppyda To You

Night And Day
The Lady Is A Tramp
Too Marvelous For Words
Dancing In The Dark
Winter Wonderland
Ain’t She Sweet
Frosty The Snowman
When I Fall In Love
Misty
The Party’s Over
On The Street Where You Live
Blueberry Hill
Makin’ Whoopee
Dream A Little Dream Of Me
It Had To Be You
You Go To My Head
As Times Go By
Rhapsody In Blue
Jingle Bell Rock

1960s

People
I Only Want To Be With You
When A Man Loves A Woman
I Got A Woman
People Get Ready
Love Is Blue
For What It’s Worth
This Magic Moment
Save The Last Dance For Me
Viva Las Vegas
Walk On By
Build Me Up Buttercup
Everyday People
Whole Lotta Love

TI.
Timbaland
Van Halen
Kurt Weill
Barry White
John Williams
Lucinda Williams
Rob Zombie

1970s

Behind Closed Doors
Ain’t No Stopping Us Now
For The Love Of Money
A Horse With No Name
Moondance
Peaceful Easy Feeling
Layla
Staying Alive
Star Wars Theme
Killing Me Softly
Stairway To Heaven
Hot Stuff
Superfly
Listen To The Music

13

EX.4
28

Tahe of Contrmts
l980s

Eye Of The Tiger
Slow 1-land
The Wind Beneath tvly Wings
Endless Love
Morning Train
[3eat It
Jump
We Are the World
Indiana Jones Theme
Celebration
Like A Prayer
Flashdance

1990s

Creep
Macarena
Sunny Came Home
Amazed
This Kiss
Believe
Smooth
Livin’ La Vida Loca
Losing My Religion
Gonna Make You Sweat
All Star

2OOO,,,dAiir

ifs Been Awhile
Photograph
Complicated
U Got It Bad
Crazy In Love
Cry Me A River
White Flag
Dilemma
Work It
Miss You
Burn
American Idiot
Save A Horse (Ride A Cowboy)
We Belong Together
Promiscuous
Crazy
Gold Digger
Hey There Delilah
Sexy Back
Whatever You Like
I Kissed A Girl
All Summer Long
Gotta Be Somebody
Single Ladies
Blame It
‘Fouch M-y Body
Rockstar
Misery Business
4 Minutes
Home
Let It Rock
Circus
Take Me There

Music Publishing Royalties
Wamer/Chappell, as a copyright owner and/or administrator of copyrighted musical compositions, is entitled to receive royalties for the exploitation of
musical compositions. We continually add new musical compositions to our catalog, and seek to acquire rights in songs that will generate substantial revenue
over long periods of time.
Music publishers generally receive royalties pursuant to mechanical, public performance, synchronization and other licenses. In the U.S., music
publishers collect and administer mechanical royalties, and statutory rates are established by the U.S. Copyright Act of 1976, as amended, for the royalty
rates applicable to musical compositions for sales of recordings embodying those musical compositions. In the U.S.. public performance royalties are
typically administered and collected by performing rights organizations and in most countries outside the U.S., collection, administration and allocation of
both mechanical and performance income are undertaken and regulated by governmental or quasi-governmental authorities. Throughout the world, each
synchronization license is generally subject to negotiation with a prospective licensee and, by contract, music publishers pay a contractually required
percentage of synchronization income to the songwriters or their heirs and to any co-publishers.
14

EX.4
29

Thte of Contents

Warner/Chappell acquires copyrights or portions of copyrights and/or administration rights from songwriters or other third-party holders of rights in
compositions. Typically, in either case, the grantor of rights retains a right to receive a percentage of revenues collected by Wamer/Chappell. As an owner
andJor administrator of compositions. we promote the use of those compositions by others. For example, we encourage recording artists to record and include
our songs on their albums, offer opportunities to include our compositions in turned entertainment, advertisements and digital media and advocate for the use
of our compositions in live stage productions. Examples of music uses that generate publishing revenues include:
Mechanical: sale of recorded music in various physical formats
•

Physical recordings (e.g.. CDs and DVDs)

Performance: performance of the song to the general public
•

Broadcast of music on television, radio, cable and satellite

•

Live performance at a concert or other venue (e.g., arena concerts, nightclubs)

•

Broadcast of music at sporting events, restaurants or bars

•

Performance of music in staged theatrical productions

Synchronization: use of the song in combination with visual images
•

Films or television programs

•

Television commercials

•

Videogames

•

Merchandising, toys or novelty items

Digital:
•

Internet and mobile downloads

•

Mobile ringtones

•

Online and mobile streaming

Other:
•

Licensing of copyrights for use in sheet music

Composers and Lyricists C’ont,’acts
Wamer/Chappell derives its rights through contracts with composers and lyricists (songwriters) or their heirs, and with third-party music publishers. In
some instances, those contracts grant either 100% or some lesser percentage of copyright ownership in musical compositions and/or administration rights. In
other instances, those Contracts only convey to Warner/Chappell rights to administer musical compositions for a period of time without conveying a copyright
ownership interest. Our contracts grant us exclusive exploitation rights in the territories concerned excepting any pre-existing arrangements. Many of our
contracts grant us rights on a worldwide basis. Contracts typically cover the entire work product of the writer or composer for the duration of the contract. As
a result, Wamer/Chappell customarily possesses administration rights for every musical composition created by the wnter or composer during the duration of
the contract.
While the duration of the contract may vary, many of our contracts grant us ownership and/or administration rights for the duration of copyright. See
“Intellectual Property-Copyrights”. U.S. copyright law permits authors or their estates to terminate an assignment or license of copyright (for the U.S. only)
alter a set period of time.
15

EX.4
30

Tatse of Contents

Marketing and Promotion
We actively seek, develop and maintain relationships with songwriters. We actively market our copyrights to licensees such as recorded music
companies (including our Recorded Music business), filmed entertainment, television and other media companies, advertising and media agencies, event
planners and organizers. computer and video game companies and other multimedia producers. We also market our musical compositions for use in live stage
productions and merchandising. In addition, we actively seek new and emerging outlets for the exploitation of songs such as ringtones for mobile phones, new
wireless and online uses and webcasting.

Competition
In both Recorded Music and Music Publishing we compete based on price (to retailers in recorded music and to various end users in music publishing),
on marketing and promotion (including both how we allocate our marketing and promotion resources as well as how much we spend on a dollar basis) and on
artist signIngs. We believe we currently compete favorably in these areas.
Our Recorded Music business is also dependent on technological development, including access to, selection and viability of new technologies, and is
subject to potential pressure from competitors as a result of their technological developments. In recent years, due to the growth in piracy, we have been forced
to compete with illegal channels such as unauthorized, online, peer-to-peer filesharing and CD-R activity. See “Industry Overview—Recorded Music—Piracy.”
Additionally, we compete, to a lesser extent, for disposable consumer income with alternative forms of entertainment, content and leisure activities, such as
cable and satellite television, pre-recorded films on DVD, the Internet, computers, mobile applications and videogames.

The recorded music industry is highly competitive based on consumer preferences, and is rapidly changing. At its core, the recorded music business
relies on the exploitation of artistic talent. As such, competitive strength is predicated upon the ability to continually develop and market new artists whose
work gains commercial acceptance. According to Music and Copyright, in 2010, the four largest major record companies were Universal, Sony Music
Entertainment (“Sony”), WMG and EMI Music (“EMI”), which collectively accounted for approximately 77% of worldwide recorded music sales. There are
many mid-sized and smaller players in the industry that accounted for the remaining 23%, including independent music companies. Universal was the
market leader with a 29% worldwide market share in 2010, followed by Sony with a 23% share. WtG and EMI held a 15% and 11% share of worldwide
recorded music sales, respectively.
The music publishing business is also highly competitive. The top four music publishers collectively account for approximately 69% of the market.
Based on Music & Copyright’s most recent estimates published in March 2011, Universal Music Publishing Group, having acquired BMG Music
Publishing Group in 2007, was the market leader in music publishing in 2010, holding a 23% global share. EMI Music Publishing was the second largest
music publisher with a 20% share, followed by WMG (Wamer/Chappell) at 14% and Sony/ATV Music Publishing LLC (“Sony/ATV”) at 13%. Independent
music publishers represent the balance of the market, as well as many individual songwriters who publish their own works.
In November 2011, Universal announced it had signed an agreement to acquire EMI’s recorded music division and a group including Sony Corporation
of America (an affiliate of Sony/ATV) announced they had signed an agreement to acquire EMI Music Publishing. Both transactions remain subject to a
number of conditions, including regulatory approvals. The sale of EMI’s recorded music business may affect the competitive landscape and relative market
share of the major record companies going forward. The sale of EMI Music Publishing may affect the competitive landscape and relative market share of the
major music publishers going forward.
16

EX.4
31

EXHIBIT 5

EX.5
32

labte of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended September 30, 2012
OR

C

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
to

For the transition period from

Commission File ?‘umber 00 1-32502

Warner Music Group Corp.
(Coact name of Regittrant

at

tpecified in its charter)

Delaware

13-4271875

State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

75 Rockefeller Plaza
New York, NY

10019

(Addrest of principal eectttise oftie,)

Zip Code)

Registrant’s telephone number, including area code: [phone]
Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes

Yes

C

No

No

C

Indicate by check mark whether the registrant (I) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes C No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website. if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulations S-T (232.405 of this chapter) during the preceding 12 months (or for shorter period that the
No C
registrant was required to submit and post such files). Yes
Indicate by check mark if the disclosure of delinquent tilers pursuant to Item 405 of Regulation S-K(229.405 of this chapter) is not contained herein.
and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part Ill of this
Form 10-K or any amendments to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule l2b-2 of the Exchange Act.
Large accelerated filer C
Non-accelerated filer lS
(Do not check if a smaller reporting company)

Accelerated filer C
Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

C

Yes

C

No

There is no public market for the Registrant’s common stock. As of December 13, 2012 the number of shares of the Registrant’s common stock, par
value $0001 per share, outstanding was 1.000. All of the Registrant’s common stock is owned by affiliates of Access Industries. Inc. The Registrant has filed
all Exchange Act reports for the preceding 12 months.

EX.5
33

1bts of

Contents

Music Publishing (19%, 19% and 18% of consolidated revenues, before intersegment eliminations, for fiscal year ended September 30. 2012,
twelve months ended September 30, 2011 and fiscal year ended September 30, 2010)

Where recorded music is focused on exploiting a particular recording of a composition, music publishing is an intellectual property business focused on
the exploitation of the composition itself. In return fur promoting, placing, marketing and administering the creative output of a songwriter, or engaging in those
activities for other rightsholders, our music publishing business garners a share of the revenues generated from use of the composition.
Our music publishing operations include Warner/Chappell, our global music publishing company headquartered in Los Angeles with operations in over
50 countries through various subsidiaries, affiliates and non-affiliated licensees. We own or control rights to more than one million musical compositions,
including numerous pop hits, American standards, fblk songs and motion picture and theatrical compositions. Assembled over decades, our award-winning
catalog includes over 65,000 songwriters and composers and a diverse range of genres including pop, rock, jazz. country, R&B, hip-hop, rap, reggae. Latin,
lblk, blues, symphonic, soul. Broadway, techno, alternative, gospel and other Christian music. In January 2011, the Company acquired Southside
Independent Music Publishing, a leading independent music publishing company, further adding to its catalog. WamerChappell also administers the music
and soundtracks of several third-party television and film producers and studios, including Lucasfilm, Ltd.. Hallmark Entertainment and Disney Music
Publishing. In July 2012, we announced that WarneriChappell had acquired the master and publishing rights with respect to film music owned by Miramax,
which contains the film scores and certain masters from numerous critically acclaimed films. Our production music library business includes Non-Stop
Music. Groove Addicts Production Music Library, Carlin Recorded Music Library and 615 Music, collectively branded as Warner/Chappell Production
Music.
Music Publishing Portfolio

Representative Songwriters
Michelle Branch
Michael Bublé
Eric Clapton
Bryan-Michael Cox
Dido
Dream
Kenneth Gamble and Leon Huff
c;corge and Ira Gershwin
Green Day
Dave Grohl
Don Henley
Claude Kelly
Lady Antebellum
Led Zeppelin
Lil Wayne
Little Big Town
Madonna
Maná
James Otto

Johnny Mercer
George Michael
Van Morrison
Muse
Tim Nichols
Nickelback
Harry Nilsson
Paramore
Katy Perry
Plain White T’s
Cole Porter
Radiohead
The Ramones
R.E.M.
I)amien Rice
Alejandro Sanz
Stephen Sondheim
Staind
TI.

Timbaland
Van Halen
Kurt Weill
Barry White
John Williams
Lucinda Williams
Rob Zombie

12

EX.5
34

Table of Contents

Representative Songs
I 960s

1955s and Prior

Summertime
Happy Birthday To You
Night And Day
The Lady Is A Tramp
Too Marvelous For Words
Dancing In The Dark
Winter Wonderland
Ain’t She Sweet
Frosty The Snowman
When I Fall In Love
Misty

The Party’s Over
On The Street Where You Live
Blueberry Hill
Makin’ Whoopee
Dream A Little Dream Of Me
It Had To Be You
You Go To My Head
As Time Goes By
Rhapsody In Blue
Jingle Bell Rock

People
I Only Want To Be With You
When A Man Loves A Woman
I Got A Woman
People Get Ready
Love Is Blue
For What It’s Worth
This Magic Moment
Save The Last Dance For Me
Viva Las Vegas
Walk On By
Build Me Up Buttercup
Everyday People
Whole Lotta Love

Behind Closed Doors
Ain’t No Stopping Us Now
For The Love Of Money
A Horse With No Name
Moondance
Peaceful Easy Feeling
Layla
Staying Alive
Star Wars Theme
Killing Me Softly
Stairway To Heaven
Hot Stuff
Superfly
Listen To The Music

13

EX.5
35

Tab!e of Contents
iSSOs

Eye Of The Tiger

Slow Hand
The Wind Beneath My Wings
Endless Love
Morning Train
Jump
Indiana Jones Theme
Celebration
Like A Prayer
Flashdance

i990s

2OOO

ttiOnndafier

Creep
Macarena
Sunny Came Home
Amazed
This Kiss

lt’s Been Awhile
Photograph
Complicated
U Got It Bad
Crazy In Love

Black & Yellow
Firework
Grenade
Just The Way You Are
Last Friday Night (T.G.I.F,)

Believe

Cry Me A River
White Flag
Dilemma
Work It

Lighters
No Hands
Rocketeer
Somebody That I Used To Know
We Are Young

Smooth
Livin’ La Vida Loca
Losing My Religion
Gonna Make You Sweat
All Star

Miss You
Burn
American Idiot
Save A Horse (Ride A Cowboy)
We Belong Together
Promiscuous
Crazy
Gold Digger
Hey There Delilah
Sexy Back
Whatever You Like
I Kissed A Girl
All Summer Long
Gotta Be Somebody
Single Ladies
Blame It
Touch My Body
Rockstar
Misery Business
4 Minutes
Home
Let It Rock
Circus
Take Me There

Music Pohli.ching Rove/ties
Wamer/Chappell. as a copyright owner and,or administrator of copyrighted musical compositions, is entitled to receive royalties for the exploitation of
musical compositions. We continually add new musical compositions to our catalog, and seek to acquire rights in songs that will generate substantial revenue
over long periods of time.
Music publishers generally receive royalties pursuant to mechanical, public performance, synchronization and other licenses. In the U.S., music
publishers collect and administer mechanical royalties, and statutory rates are established by the U.S. Copyright Act of 1976, as amended, for the royalty
rates applicable to musical compositions for sales of recordings embodying those musical compositions. In the U.S., public performance royalties are
typically administered and collected by performing rights organizations and in most countries outside the U.S.. collection, administration and allocation of
both mechanical and performance income are undertaken and regulated by governmental or quasi-governmental authorities. Throughout the world, each
synchronization license is generally subject to negotiation with a prospective licensee and, by contract, music publishers pay a contractually required
percentage of synchronization income to the songwriters or their heirs and to any co-publishers.
14

EX.5
36

ThhLe of Contents

WamerChappell acquires copyrights or portions of copyrights andor administration rights from songwriters or other third-party holders of rights in
compositions. Typically, in either case, the grantor of rights retains a right to receive a percentage of revenues collected by Wamer/Chappell. As an owner
and/or administrator of compositions, we promote the use of those compositions by others. For example, we encourage recording artists to record and include

our songs on their albums, offer opportunities to include our compositions in filmed entertainment, advertisements and digital media and advocate for the use
of our compositions in live stage productions. Examples of music uses that generate publishing revenues include:
Performance: performance of the song to the general public
•

Broadcast of music on television, radio, cable and satellite

•

Live performance at a concert or other venue (e.g., arena concerts, nightclubs)

•

Broadcast of music at sporting events, restaurants or bars

•

Performance of music in staged theatrical productions

Mechanical: sale of recorded music in various physical formats
•

Physical recordings (e.g.. CDs and DVDs)

Synchronization: use of the song in combination with visual images
•

Films or television programs

•

Television commercials

•

Videogames

•

Merchandising, toys or novelty items

Digital:
•

Online and mobile downloads

•

Online and mobile streaming

•

Mobile ringtones

Other:
•

Licensing of copyrights for use in sheet music

Composers and Lyricists’ Contracts
‘

\VamerChappell derives its rights through contracts with composers and lyricists (songwriters) or their heirs, and with third-party music publishers. In
some instances, those contracts grant either 100% or some lesser percentage of copyright ownership in musical compositions and/or administration rights. In
other instances, those contracts only convey to WarnerChappell rights to administer musical compositions for a period of time without conveying a copyright
ownership interest. Our contracts grant us exclusive exploitation rights in the territories concerned excepting any pre-existing arrangements. Many of our
contracts grant us rights on a worldwide basis. Contracts typically cover the entire work product of the writer or composer for the duration of the contract. As
a result, Warner/Chappell customarily possesses administration rights for every musical composition created by the writer or composer during the duration of
the contract.
15

EX.5
37

Tab’e of Contenta

While the duration of the contract may vary, many of our contracts grant us ownership and/or administration rights for the duration of copyright. See
“Intellectual Property-Copyrights”. U.S. copyright law permits authors or their estates to tenninate an assignment or license of copyright (for the U.S. only)
after a set period of time.

Marketing and Promotion
We actively seek, develop and maintain relationships with songwriters. We actively market our copyrights to licensees such as recorded music
companies (including our Recorded Music business), filmed entertainment, television and other media companies, advertising and media agencies, event
planners and organizers, computer and video game companies and other multimedia producers. We also market our musical compositions for use in live stage
productions and merchandising. In addition, we actively seek new and emerging outlets for the exploitation of songs such as new wireless and online uses and
webcasting.

Competition
In both Recorded Music and Music Publishing we compete based on price (to retailers in recorded music and to various end users in music publishing),

on marketing and promotion (including both how we allocate our marketing and promotion resources as well as how much we spend on a dollar basis) and on
artist signings. We believe we currently compete favorably in these areas.
Our Recorded Music business is also dependent on technological development, including access to, selection and viability of new technologirs. and is
subject to potential pressure from competitors as a result of their technological developments. In recent years. due to the growth in piracy. we have been forced
to compete with illegal channels such as unauthorized, online, peer-to-peer filesharing and CD-R activity. See ‘industry Overview—Recorded Music—Piracy.”
Additionally, we compete, to a lesser extent, for disposable consumer income with alternative forms of entertainment, content and leisure activities, such as
cable and satellite television, pre-recorded films on DVD. the Internet, computers. mobile applications and videogames.

The recorded music industry is highly competitive based on consumer preferences, and is rapidly changing. At its core, the recorded music business
relies on the exploitation of artistic talent. As such, competitive strength is predicated upon the ability to continually develop and market new artists whose
work gains commercial acceptance. According to Music and Copyright, in 2011, the four largest major record companies were Universal, Sony, us and EMI,
which collectively accounted for approximately 75% of worldwide recorded music sales. There are many mid-sized and smaller players in the industry that
accounted for the remaining 25%, including independent music companies. Universal was the market leader with a 28% worldwide market share in 2011,
followed by Sony with a 22% share. We and EMI held a 15% and 10% share of worldwide recorded music sales, respectively.
The music publishing business is also highly competitive. The top four music publishers collectively account for approximately 67% of the market.
Based on Music & Copyright’s most recent estimates published in May 2012. Universal, having acquired BMG Music Publishing Group in 2007, was the
market leader in music publishing in 2011, holding a 22% global share. EMI was the second largest music publisher with a 19% share, followed by us
(WarneriChappell) at 14% and Sony/ATV at 12%. Independent music publishers represent the balance of the market, as well as many individual songwriters
who publish their own works.
In 2012. Universal closed it.s acquisition of EMI’s recorded music division and a group including Sony Corporation of America (an affiliate of
SonyATV) closed its acquisition of EMI’s music publishing division, each of which were contingent upon the divesture of certain assets. The sale of EMI’s
recorded music division may affect the competitive landscape among the major record companies going forward. The sale of EMI’s music publishing division
may affect the competitive landscape among the major music publishers going forward. See “Risk Factors—Consolidation in our industry may materially and
adversely affect our ability to compete.”
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EX.5
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