Read The Art of Voice Acting: the art and business of performing for voice over Online
Authors: James Alburger
Voiceover artists have to consider both sides of intellectual property issues, meaning, they have to be concerned with infringing on others
copyrights or trademarks, and they also need to protect their own ideas and creations through copyrighting and/or trademarks. The most common area where voiceover talent can run into copyright infringement issues is through their demos. Another common area this author has witnessed concerning infringement are infringement of trademarks in voiceover artist’s branding or logos, and unlawful use of trademarked logos on talent’s websites.
It is very important that the music used on the demo is properly licensed by the copyright owner. In addition, it is very important for the talent to have proper permission from the producer of a spot to use the spot on their demos. The voice talent does not automatically have the right to use a spot on their demo as that spot has been copyrighted by someone other than the voice talent, unless of course, the voice talent also produced the spot, then they may have copyrighted it.
This author has heard stories of voice talent receiving “cease and desist” letters from companies objecting to either the music on the artists demos, or the use of a particular spot on their demo. Cease and desist letters usually demand a voice talent cease using the copyrighted material immediately or face further legal action, like a lawsuit for infringement.
The cease and desist letter is actually the first step in the legal process and one of the reasons it is employed is to set up a “willful infringement” cause of action. If one uses material they know is copyrighted, then the author and/or copyright owner of the material can sue in Federal Court for statutory damages which go as high as $150,000 for each act of willful infringement. A defense to this willful infringement is that the user was “innocent” in that they did not know the material was copyrighted. That is why the cease and desist letter is sent out because that defense becomes impossible upon receipt of that letter as the receiver of that letter cannot argue they were innocent after they are informed with such a letter.
Similarly, those who produce voiceover demos, commercials or other material that will be broadcast must be cognizant of copyright law. For producers, there are a few things that must be kept in mind. First, using a copyrighted song on a commercial, for example, is an infringement of the copyright owner’s rights and that producer could be sued by that owner for willful or negligent infringement, which results in statutory damages ranging from $200 per use up to $150,000 per use for willful infringement.
In addition, organizations like ASCAP and BMI, which regulate royalty payments to artists and publishers, will seek payments on behalf of the owner of the publishing rights to that music for royalties that are supposed to paid each time the song is played over the airwaves, or “displayed publicly.” These are actually two separate and distinct rights; one bundle given to the copyright owner, and one bundle given to the publisher, which may or may not be the same.
Voice talent also need to understand how to protect their creative works through copyrights. Voice talent are most certainly hired to do most voiceover jobs as a “work for hire,” meaning that whoever hires the voice talent is retaining the right to copyright the finished product with the talent’s voice on it. This is normal and customary in the business.
However, if a voice talent produces commercials, creates music for commercials, or drafts copy for commercials, that voice talent should do whatever is necessary to retain rights to that spot, meaning, they should specifically state in their contract that their services will not be considered a “work for hire” and that the talent has the right to copyright the spot.
Copyrighting is a very powerful protection as it prevents others from infringing on the work for the entire life of that author, plus 90 years after the authors death. Civil penalties can be as high as $150,000.00 for the willful infringement of a copyrighted work. This provision is probably not going to apply to most commercial spots that are produced as the practical life expectancy of the spot is limited. The provision, however, will prevent another company from stealing the spot, and also allows your heirs to continue to protect your work for you after you have passed away so it can continue to generate income after the author’s death.
Voiceover artists also need to be aware of trademark law to protect the business names under which they operate. Once a voiceover artist picks a name for their business, like “ABC Terrific Voice,” a trademark search should be done to insure that no one else is using the name. A search can easily be done on the United States Patent and Trademark Office (USPTO) at their website:
www.uspto.gov
. A search prior to using the name is wise so as to avoid any legal action for infringement of the trademark by the holder of the trademark.
If available, it would be wise for a voiceover artist to “trademark” the name by registering it with the USPTO. This will help to ensure that the talent will not have to use a different name later on to avoid confusion if someone else starts to use it. However, filing of a trademark can be a very confusing task for the uninitiated so this is something a voice talent would probably want an experienced intellectual property attorney to handle. Technically, since voiceover artists render services, the name would be “servicemarked” rather than being “trademarked.” Like copyrights, trademarks also survive the death of the trademark holder and thus your heirs can ensure no one infringes on the use of the name.
This author has also seen several voice talent infringing on famous trademarks through the talent’s branding and/or websites. I have seen several instances where voice talent will take a famous logo, for example,
Coca-Cola, and use the logo and name and say something like: Coca-Cola Voiceovers: There Is Nothing Sweeter” or something like this. Not only does the voice talent generally use the name, but also uses the logo and artwork and just replaces the trademarked product name with their own. In this author’s opinion, this is complete infringement of the trademark, subjecting the talent to payment of statutory royalties and penalties to the mark’s owner, that is Coca-Cola.
I find this both ironic and really bad business. It is ironic because if, for example, this voice talent was asked to do a voiceover audition for Coca-Cola, and Coca-Cola “used” the audition for a commercial or other purpose without the talent’s permission, I am sure the talent would be the first to be upset about that, as I have heard this concern many, many times from talent doing online auditions. Yet, these same talent think nothing of using Coca-Cola’s intellectual property for their commercial purposes.
It is bad business because if Coca-Cola, for instance, did not do anything about the infringement for a number of years, so that the brand
did
become associated with the voice talent, and then Coca-Cola decides to send a “cease and desist” letter as described above, then where does that leave the talent? They are either going to have to abandon all of that work with their “brand” and “rebrand,” or take on a multinational corporation in Federal Court, which has exclusive jurisdiction of United States trademarks.
Likewise, this author has seen numerous examples of voice talent “taking” trademarked logos from websites, for example, Coca-Cola, and putting those logos on their own websites representing clients that the voice talent has done work for. If this is done without permission of the trademark’s owner, this is also an infringement that I have personally heard resulted in receipt of “cease and desist” letters. Again, this is the first step in litigation and there is nothing to stop a trademark owner from suing the talent even if the talent agrees to remove the trademark voluntarily.
For voiceover artists that have employees, and/or have a separate studio space outside of their home, the answer to this question is a resounding
yes
! For those who have employees, virtually every State in the Nation requires that you carry worker’s compensation insurance to cover injuries to employees sustained while on the job. Most insurance companies sell worker’s compensation insurance as part of a business policy. Likewise, if you have a separate studio outside of your home, then you should certainly have business insurance to cover losses from theft and fire, and to protect you in the event that someone is injured while inside your studio.
For voiceover artists who have no employees and work out of a home studio where people occasionally enter their home to use the studio, it
would probably be an excellent idea to obtain business insurance, as home insurance policies often contain exceptions from covering “business uses” of your home.
Finally, for voiceover artists who have no employees and work out of a home studio where no one ever enters to use the studio, the business insurance is optional. One advantage for any voice talent to obtain business insurance is that most policies cover “personal and advertising injuries,” which will cover claims for certain offenses you commit in the course of business such as libel, slander, disparagement, or copyright infringement in your advertisements, discussed earlier in this chapter.
For solo voice talent with a home studio and no employees, these business policies are likely to be very inexpensive as the risk of loss is very low for insurance purposes.
Generally, if a voice talent has any personal assets, it would be an excellent idea for the talent to work under some form of corporate structure, like an LLC, and to obtain business insurance. This will provide the greatest protection to the talent so that their personal assets will not be at risk. It would take quite a catastrophic loss to exceed these safeguards, and such a loss is very unlikely to occur in this business in this author’s opinion.
A question I am asked frequently by voice talent, as well as producers, is “Do I have to charge and collect sales tax for my work?” The answer to this question is very State specific. However, a few generalities exist concerning sales tax. In general, voice talent do not need to charge or collect sales taxes for performing. Producers, or voice talent selling production services or studio time, may have to charge and collect Sales taxes for renting of their studio spaces or other production services. This is controlled by each State, so the producer should check with their local and State Department of Taxation or Revenue to answer this question specifically.
However, another generality, sales taxes only needs to be charged and collected for work performed for clients within the State where the production facility is located, not for work performed outside of the State. For instance, a production facility or studio that is located in New York will only have to charge and collect sales taxes from clients also located in New York.
A voice talent should be sure that they are operating their voiceover business as a business and not a hobby. The quicker the voice talent treats voiceover as a money-making venture, the better off they will be, in this author’s opinion, not only for tax purposes, but also in obtaining clientele and increasing income. As discussed in the first section of this chapter, if the IRS determines that an activity is a hobby and not a legitimate business, it will not allow any deductions for any expenses of the “business.”
Also, a voice talent, in treating the “business” as a “business”, must keep detailed records for all expenses, including receipts. A separate checking account should be set up for the voiceover activities, and a talent should
never
“commingle” fees received from voiceover with personal funds. Any automobile travel should be logged in a book recording the trip, the total mileage, and the business reason for the trip, such as an audition or recording session.
Of course, equipment purchased for the home studio can be deducted. The talent has the option of depreciating the equipment over time, or can take a “Section 179” depreciation deduction, which allows deduction of up to $125,000 in equipment purchases in the year of purchase. $125,000 can certainly build a
really
nice home studio!
Finally, one deduction that voice talent should be particularly cognizant of is the “home office” deduction. This deduction is one that traditionally has raised a red flag for the IRS due to past abuses by taxpayers. In order for one to take the home office deduction, the home office must be used
exclusively
for business.
For instance, if a home studio is set up in the living room where the family also gathers to watch television, then the IRS will generally not allow a taxpayer to deduct the use of the living room as a “home office.” If, on the other hand, the studio is located in a segregated area of the house, like a basement or attic, which has a sound booth or acoustic improvements, then a home office deduction will most certainly be allowed as clearly the studio is being used exclusively for the voiceover business.
Many people out there are taking on voiceover as a second career, or as a “side venture.” If this is the case, it is very important that this be done properly or a bulk of the expenses will not be tax deductible.
The IRS does not allow deductions for entering into a “new trade or business.” Publication 970 from the IRS states: “Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education. This is true even if you do not plan to enter that trade or business.”
However, start up expenses are deductible up to the first $5,000. IRS Publication 535 reads as follows: “Business start-up and organizational costs are generally capital expenditures. However, you can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs paid or incurred after October 22, 2004. Start-up costs include any amounts paid or incurred in connection with creating an active trade or business or investigating the creation or acquisition of an active trade or business. Organizational costs include the costs of creating a corporation.”
This is another very compelling argument as to why to form an LLC or Corporation
prior
to undergoing training and working on your demo, as all of these expenses can be classified as start-up expenses. It is extremely important such expenses are couched in these terms, rather than as “tuition,” as “tuition” for voiceover training could certainly be held by the IRS to be a nondeductible expense qualifying one for a “new trade or business,” whereas training to prepare one to record a demo could be classified as a start-up cost.
The factors that the IRS says you should weigh to decide if your voiceover activities are a business or hobby are: