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Know Your (Master) Rights - and why you should hold onto them

Recent news articles highlighting issues in the music industry have frequently cited the fact that a lot of artists do not own their masters. The internet has plenty of excellent resources that explain about music copyright, but it remains one of the more confusing areas for aspiring artists. So we wanted to layout why master rights are so important, what they mean to artists (creatively and financially) as well as the multiple rights contained within recorded and performed music.

First, a quick rundown of what copyright does for you as an artist. There a two main purposes of copyright: to ensure that your are legally recognised as the owner of the music you have created or contributed to, and that no one else can claim benefit from it. And secondly, to help you get paid. Copyright translates to royalties, and royalties are the monies that are paid out to you as an artist or a writer every time your music is consumed. Pretty important stuff really.

There are two main copyrights in a piece of music: the composition and the performance, or the publishing and the master rights. Publishing relates to authorship, and is the property of the songwriter or composer. Masters are the rights to the sound recordings. So regardless of whether Beyoncé has multiple writers as part of her team, the recordings you enjoy through your headphones are her property as the artist.

It is possible for the publishing rights and the master rights for the same song to be held by the same person, by two different people or by multiple people. The benefit of being a singer-songwriter is that you have maximum ownership and maximum capacity for earnings from that song. It's worth remembering that as a songwriter Beyoncé receives one set of royalties every time you listen to Daddy Lessons, but she also receives a different royalty every time you listen to her version or any other cover version by any other artist. Publishing royalties are like wine; they become more profitable the older they are. Put it this way; Yesterday by the Beatles has been covered over 1600 times on recordings, and performed live by other artists over seven million times in the 20th century alone. That represents a huge additional revenue for McCartney as the writer, while the sound recording by The Beatles will only earn royalties when their recorded version is listened to.

So how do royalties work then? Royalties are continuous payments generated from consumption of music in various forms, determined by agreed industry rates and paid to copyright holders. There are four types of royalties: mechanical, public performance, synchronisation and print. Here's a really quick breakdown of what they cover:

Mechanical royalties are generated by any reproduction or distribution of recorded music. CD, vinyl, cassette, downloads.... any form of recorded music that you can own. And these royalties are collected by labels and distributors, and paid to both master and publishing rights holders.

Public Performance royalties relate to any time music is broadcast, whether it is live or recorded. Radio, live shows, music streaming services, bars, clubs, shops, telephone hold music... Performance Royalty Organisations (PROs) are responsible for licensing and collecting royalties across these sectors. Therefore writers and publishers receive royalties by registering with them.

Synchronisation - or 'sync' - royalties come from setting an audio accompaniment to a visual production. Quite literally syncing sound with visuals: film soundtracks, music for adverts or TV shows. Licensing music for productions requires approval from and payment to both publisher and master rights holders. And some quick myth busting... it doesn't matter if it's under 15 seconds, or if it's not for a profit. You must ALWAYS obtain the correct license for sync... TECHNICALLY the music someone walks down the aisle to at a wedding would need a license if you film it.

Print royalties are now the least common, but not totally redundant. They come from sheet music - so the Titanic Songbook that sits on your mum's piano would have generated a bit more money for the composer. These are paid out to publishers who then pay a share to writers.

That is a wildly brief overview of music copyright, and I would definitely recommend further study if you are a writer or an artist, or both. But why is it so important to own your masters, and who wants to take them from you?

The short answer is record labels. They are the industry sector with the interest in master rights, that is their revenue stream. The traditional record deal model is that a label provides the financial backing for a release (recording, production, distribution and marketing), and in return they own the rights to the music to profit from. That traditional model usually assumes ownership of copyrights for very long periods of time - up to the full length of the copyright (70 years after the death of the author) or even forever.

The problem with this model is that artists completely relinquish any control over their music; creative control and control over how and when that music is released. If you want to walk away from the label, you won't get your songs back - and the contract most likely prohibits you from re-recording and releasing elsewhere. If the label decides to no longer support the release past their original contractual agreement, it is entirely possible for your songs to languish unheard for the rest of the time. Because legally you would no longer own them and you would have no say in using them.

Also remember that the financial backing from a label comes in the form of a recoupable advance. That money is paid back to the label by the artist over time via royalties generated. So while some artists may be given the opportunity to buy back their masters, if they haven't recouped the advance it can be impossible.

Before we go on... if this hasn't convinced you that an entertainment lawyer is absolutely imperative when dealing with industry contracts, then I'm not sure you've read this properly. Because we are barely touching the sides....

While that's the traditional model, there is a definite move away from this style of contract and artists do have better options available. The main draw of the label contract is the advance, because recording and marketing music can be an expensive business. But compared to retaining ultimate control and potential for earnings over a life time? License deals allow artists to 'rent' their works to a label for a set period, after which the rights revert back to the artist. There are also options around distribution only deals, where a label simply engages to "sell" your music for you. I'm sure you've heard of Distrokid or CD Baby - those are distributors. It's also worth noting that it is still possible to get financial support from a label for a license deal or a distributor, it may not be as much but they can still commit to recording costs and marketing assistance.

As mentioned before, this is an area to really do your homework on - and there is no one size fits all approach to releasing music. If you want to delve further into music copyright and record deals, here are some places to start:

Also remember that copyright law varies in different territories, check your local laws and rights organisations if you are not in the UK.

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