Insights Blog: Five basic facts about music copyright
By Chris Cooke | Published on Wednesday 5 October 2016
If you write songs or record music, well done, you’re now in the copyright business. But how does copyright work? How does copyright make money?
CMU Insights is a leading expert on music rights, and provides training for music companies and companies who use music on how all things copyright and licensing work. We run in-house courses, plus people can sign up for our seminars ‘How Music Rights Work’, ‘How Music Licensing Works’ and ‘The Music Rights Sector’, or all three here.
But to get you started, here are the basics in five steps.
1. There are two sets of music rights
So, first things first, let’s start with the most basic point about music copyright: there are two sets of music rights. Copyright protects both songs and recordings. Separately.
Actually, if you have a song with lyrics, that’s two copyrights in itself, in that there is one copyright in the words and another in the musical composition. But in the music industry we tend to lump them together and call them the song or publishing rights.
Then there is the separate copyright in the sound recording, sometimes called the recording or master right.
Even though most artists these days both write and record songs, they normally (not always, but more often than not) work with one company on managing and exploiting their song rights (a music publisher) and another company on managing and exploiting their recording rights (a record company).
Therefore the music rights industry can be split into two – the music publishing industry and the record industry.
2. Copyrights are usually automatic
In the UK (and most but not all other countries), copyright is automatic. The minute you write a song or make a recording, the copyright exists, you don’t need to fill our any forms or pay any money to a copyright registry. Providing the work fulfils certain criteria set out in copyright law, the copyright exists.
Because of this, the law tells us who the default or presumed owner of the copyright is. Default ownership rules vary from country to country and according to the kind of copyright.
In the UK, the default owner of the song copyright is the songwriter, while the default owner of the sound recording is whoever paid for the recording to take place (what copyright law slightly unhelpfully calls the ‘producer’).
Though it is important to remember that default ownership rules can be rewritten by contract, so that ownership can be transferred from the default owner to another entity, usually in return for cash.
3. Copyrights can be co-owned and often are
Copyrights can be co-owned. This is particularly common with song copyrights because a lot of songs are co-written. Where people collaborate on a song, the law says that each collaborator owns a share of the resulting copyright.
It is then generally for the collaborating songwriters to agree on how that resulting copyright will be split. This is an important conversation for co-writers to have whenever they complete a new song, and what is agreed should be written down and logged with the relevant collecting societies (more on those in a moment).
If splits aren’t agreed and there is later a dispute over how a copyright is shared between collaborators, ultimately if it goes to court a judge will decide how the copyright should be divvied up. But if there is an agreement in place, usually the judge will enforce the agreement.
4. Each copyright comes with a number of controls
Copyright law provides the copyright owner with certain ‘controls’ over the content in which they own the copyright.
The exact list of controls varies from country to country but commonly includes: the reproduction control, the distribution control, the rental control, the adaptation control, the public performance control and the communication control.
An additional control was added to most copyright systems in the late 1990s and early 2000s called the ‘making available control’, so that the mere act of making music available online in a place where the public can access it is restricted by copyright. This is often seen as a sub-set of the communication control, and is specifically described as such in UK copyright law.
In the music industry it is common to group the reproduction and distribution controls together and call them the ‘reproduction rights’ or the ‘mechanical rights’. It is also common to group the performance and communication controls together and call them the ‘performing rights’ or the ‘neighbouring rights’ (though the term ‘neighbouring rights’ can mean different things in different countries).
Copyright makes money when someone else wants to exploit one of the controls. So if someone wants to reproduce, distribute, rent out, adapt, perform or communicate a song or recording you own – well, you control all those actions – so the third party needs your permission. You sell them permission, and that’s how copyright makes money.
The permission giving is called ‘licensing’.
5. Sometimes we license directly and sometimes we license collectively
Quite how the music industry grants permission – ie licenses – varies according to how a third party is using a song or recording and, often, depending on which specific controls of the copyright are being exploited.
The most basic kind of licensing is direct licensing. So, a brand wants you use a song in an advert. They must identify who the copyright owners are and negotiate a deal with each co-owner, any one of whom could say “no” to the deal, either because they don’t want the brand to use their song, or as a negotiating tactic to get a better fee.
Sometimes rights owners license via middle-men, rather than actually dealing with licensees directly. This is particularly common with smaller rights owners, who don’t necessarily have the resource or the negotiating power to do every deal direct. So in digital, independent record companies might utilise a distributor who already has deals in place with the streaming services, or license via a deal negotiated on behalf of the indie label sector by Merlin.
But in certain scenarios the music industry licenses collectively. In this case, all the rights owners (more or less) put all their rights in one pot and appoint one organisation to license certain groups of licensees on their behalf.
That organisation – a collecting society aka collective management organisation (CMO) aka performing rights organisation (PRO) – then does the deal, often with whole groups of licensees, collects the resulting money, and distributes it to members based on usage.
Collecting societies usually provide licensees with blanket licenses covering all the songs or recordings in their repertoire, and for each individual licence, all members then receive the same payment per usage.
In most countries there are separate societies for song rights and recording rights. On the publishing side there may also be separate societies for the licensing of reproduction and performing rights. And on the recordings side there may be separate societies for artists and labels.
In the UK, PPL represents artists and labels. PRS represents the performing rights in songs and MCPS the reproduction rights in songs.