For a “cliff notes” version of this blog, you can visit my Instagram profile at @tyrobins and view the saved story highlight “Music Business”.
There are two main money making properties in the recorded music business, the Song Copyright and the Sound Recording Copyright. These properties and their owners are protected by U.S. Copyright Law and subsequent amendments.
Song Copyright is the song composition, owned by the songwriter(s).
This legal protection begins once a song is “fixed in a tangible medium of expression”, which means it has been recorded or written down. Some songwriters are under the mistaken impression that they must do something, such as file certain paperwork, to “get the song Copyright-ed”.
This is incorrect. Copyright Law protects author’s ownership as soon as the work is “fixed”. This confusion is likely because a song and it’s subsequent copyright protection can be registered with the Library of Congress. This registration allows for easier proof of ownership in court in case of infringement, and allows for owners to seek particular statutory damages. Registration is recommended, but copyright ownership and protection is automatic once the work is “fixed”.
The music industry and Copyright Law view a song as 50% music composition, which includes vocal melody, and 50% lyrics. If a song is authored by a single writer, they assume 100% ownership. If multiple writers author a song together, they must decide how to split the ownership of the song based on each writer’s contribution. These ownership percentages are then detailed on a Song Split Sheet. If no decision is made, and no Song Split Sheet is filled and signed, the law will split ownership equally between all songwriters, regardless of contribution.
Sound Recording Copyright is a particular recorded version of a song. This copyright is also known as the “Master”.
The Master is owned by whoever paid for the recording to be made. This is typically a record label or an independent artist.
The Copyright Law has a different set of protections for owners of Sound Recording Copyrights. For instance, song owners have the protected and exclusive right to perform or broadcast their songs publicly. In the U.S., this protection is not given to owners of master recordings.
Protected Rights
As mentioned above, the Copyright Law gives owners exclusive rights over their work, and protects them from infringement.
This means that only the songwriter/owner can:
- Record and distribute the song
- Perform and broadcast the song
- Synchronize the song with a visual work
If someone who is not the owner of the song would like to use it, that person must first get permission from the song owner. This gives the Song Copyright owner the ability to sell limited permissions to use the song.
Similarly, only the master recording owner can:
- Use the master recording
If someone who is not the owner of the master recording would like to use it, that person must first get permission from the owner. This gives the Sound Recording Copyright owner the ability to sell limited permissions to use the master.
This buying and selling of limited permissions is what “Music Licensing” is all about.
Music Licensing
If someone would like permission to Record and Distribute a song, they must buy a Mechanical License. This is usually purchased by record labels who take this permission, make recordings of the songs with their artists, and distribute those recordings to the public.
If someone would like permission to Perform or Broadcast a song, they must buy a Performance License. This is usually purchased by broadcasters like radio stations and TV networks, so that they can broadcast songs. It is also purchased by venues like restaurants and bars for permission to play songs for their patrons.
If someone would like permission to Synchronize a song with a visual work they must buy a Synchronization License. This is usually purchased by TV shows and film studios for permission to synch songs with their visual work.
Similarly, if someone would like to use a master recording they don’t own, they must buy a Master Use License. This is usually purchased by TV and film production companies who wish to use a particular recording in their work, or artist’s and their labels when using samples of master recordings in their own new works.
There is an interesting inter-play between Song Copyrights and Sound Recording Copyrights. It is possible to use a song without using a particular recorded version of that song. But it is not possible to use a master recording without simultaneously using the underlying song.
This means that any time a Master Use License is purchased for permission to use a particular recording, the purchaser must also buy a license for use of the underlying song.
A frequent example of this is when a TV show or film seeks permission to use a recording in their show or movie. They must purchase a Master Use License from the owner of the master, and also purchase a Synchronization License from the songwriter.
Music Publishers
Music Publishers are companies that take on the task of selling permissions on behalf of the songwriter. They collect the licensing revenue and account for it all.
This way the songwriter can focus on doing what they do best…writing songs.
This help selling licenses is so valuable to songwriters that the industry standard split of revenue between publishers and songwriters is 50/50. This split can change once the songwriter enjoys success and gains leverage when negotiating their next deal.
This 50/50 split of song licensing income has become so typical in the music industry that each songwriter’s ownership portion and income is talked about in two halves…the writer’s portion, and the publishing.
Here’s an example:
A song is written by two writers. One writer writes all of the music, including the vocal melody. The other writes all of the lyrics.
Writer #1 owns a full 50% of the song copyright. This portion is referred to by its two halves…the writer’s portion and the publishing.
If writer #1 signs with a publisher to a typical publishing deal, they will give up the “publishing” portion of income to the publisher. If they haven’t signed a publishing deal, then they are considered self-published, and are on their own to entice labels, TV and film companies, etc… to purchase licenses and collect those payments.
The same goes for writer #2.
That’s all for now. In the following weeks I’ll be diving in to each license to explain the revenue streams and collections of each. Stay tuned!
-Ty