A Guide to Music Performance Royalties, Part 1

Let’s start at the beginning.  Broadly speaking, each recording of a song contains two copyrights: the copyright in the “musical work” or what is commonly called the “song” and the copyright in the recording of the song, commonly called the “track” or the “master”.

90% of all mistakes made by anyone in discussions of the online music business (and really the music business in general) starts right there. If you made this mistake, don’t feel self-conscious.  You are not alone, believe me.  Sometimes shockingly not alone.

Ownership and the Inception of CreationA song is not a recording and a recording is not a song. Each can be, and usually is, created by different people.  Songs are created by a “songwriter” (usually teams of songwriters coming together to write a single songs or many songs).  Recordings are created by “artists,” usually teams of artists known as a group or a band.  Songwriters may be artists and artists may be songwriters, but not every songwriter is an artist and not every artist is a songwriter.  Artists may, however, elect to record only their own songs, and only write songs with members of a band.  On the other hand, artist-songwriters may co-write with non-artist-songwriters occasionally or frequently.  The songwriting team of Bryan Adams and Jim Vallence comes to mind as an example, as does Elton John and Bernie Taupin.  Jim and Bernie were not featured artists on the recordings of their songs.

People who invest in songwriters are called venture capitalists–actually, no, venture capitalists never invest in songwriters, they invest in people who profit from songwriters after they have hits.  More of a bounded random walk or a “monkey with a dartboard”.

No, people who invest in songwriters are called “music publishers”.  The word “publisher” in the music business does not mean the same as the word “publisher” used in the game business.  In return for their investment, publishers get ownership or “administration rights” (a kind of control) over the songs they invest in.

People who invest in artists are called “record companies” sometimes “record labels”, but never “music labels”.  In return for their investment, they get ownership or control over the songs or sound recordings they invest in.  (Love/hate relationship begins here.)

Monkeys with dartboards have a short life expectancy at music publishers and record companies.

Copyright Symbols

The copyright symbol in a sound recording is designated as a P in a circle or ℗ (“P” stands for phonogram or phonorecord).  The copyright in a song is designated as the more familiar C in a circle or © (the “C” is used for works other than sound recordings).  (See Copyright Notices.)  (But note the “℗&©” symbol you see on physical records or in metadata refers to the copyrightable elements in the artwork and the sound recording–not the song.  Just to make it easy.)

The respective copyrights in songs and sound recordings are usually owned by different people and may be owned by still more different people depending on the territory concerned and the agreements among the songwriters and the separate agreements with the artist.

Copyright Owned by:

Song ©

Recording of Song ℗

Songwriter Yes, unless assigned No
Music Publisher of Song Yes, if assigned by songwriters No
Recording Artist (“Featured”) No Yes, unless assigned
Session Musician/Vocalist No No
Record Company No Yes, if assigned by artist

Royalty Payments

The songwriter/artist relationship results in the following table of royalty payments.  Each royalty can be broken down into different payments streams depending on the use involved.  Note–so far, the government is not involved.  To be continued in Part 2.

Royalty Paid to:

Song ©

Recording of Song ℗

Songwriter Yes No
Music Publisher of Song Yes No
Recording Artist (“Featured”) No Yes
Session Musician/Vocalist No Yes
Record Company No Yes

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