Music royalties and copyrights is very complex a topic. However, this guide outlines the basic rights and usages of musical compositions.
TYPES OF MUSIC COPYRIGHTS
There are two sides of music copyrights: master rights and publishing rights.
Master rights belong to the owner of a master sound recording. A master recording is an original song or sound used for reproduction and distribution. Master rights usually belong to either the artist(s), record label, recording studio, or any other party that financed the recording.
Publishing rights belong to the owner of the actual musical composition. The publishing side of music refers to the notes, melodies, chords, rhythms, lyrics, and any other piece of original music.
WHO GETS MUSIC ROYALTIES AND ADMINISTERS MUSIC ROYALTIES
The following roles either receive or distribute music royalties for the use of copyrighted music.
1. SONGWRITERS
Songwriters are those who write both the music and lyrics for a song. They receive either mechanical, performance, or sync royalties depending on the usage of their recordings.
2. PUBLISHERS
The publisher is the person or company responsible for ensuring copyright holders receive payment for the use of their music. For example, a music publisher will obtain the copyright from the songwriter in exchange for royalty privileges. They also issue licenses for the use of music they represent as well as collect licensing fees. These fees get split between the publisher and the songwriter.
3. RECORD LABELS
Record labels are responsible for marketing and distributing an artist’s recordings. Generally, they issue contracts that allow them to exploit recordings in exchange for royalty payments over a set length of time. They also often have the master rights to a recorded song, but not the publishing rights. Moreover, record labels generate royalty income from mechanical and performance royalties. The artist then receives a percentage of these royalties.
4. PERFORMANCE ARTISTS
A performing artist is anyone who performs the songwriter’s original work. Performers do not have publishing rights unless they are also the songwriter. Moreover, public performances of copyrighted music generate performance royalties for songwriters. These fees are often collected by the PROs such as ASCAP, BMI, or SESAC.
5. PERFORMING RIGHTS ORGANIZATION (PRO)
PROs collect public performance royalties and distribute those fees to the songwriter and music publisher. These organizations also track performances and broadcasting of registered music played in public. The PROs in the United States include ASCAP, BMI, and SESAC.
6. MECHANICAL RIGHTS AGENCY
Mechanical rights agencies manage mechanical licensing rights for the music publisher. They also issue those rights to anyone reproducing and distributing copyrighted musical compositions. These agencies often charge a set percentage of gross royalties collected for their services.
7. SYNC LICENSING AGENCY
Sync licensing agencies acquire the rights from record labels and music publishers to issue licenses for syncing music with visual media. They also distribute royalties for sync licenses to whoever owns the master recording rights.