[Editors Note: This is a guest blog written by Justin M. Jacobson, Esq. Justin is an entertainment and media attorney for The Jacobson Firm, P.C. in New York City. He also runs Label 55 and teaches music business at the Institute of Audio Research.]
We have previously explored the reasons to register a copyright and the procedures to effectuate it. In this article, we will explore copyright law as it specifically relates to the music industry to ensure the proper exploitation and monetization of an artist’s finished song.
For a work to be copyrightable, it must be original and fixed in a tangible form, such as a sound recording fixed on a CD, MP3 or other digital sound recording file format such as a WAV file. Some examples of copyrightable material that are common in a musician’s career are the actual song recordings, the lyrics and underlying musical composition, music videos or other audio-visual works, photographs, logos or other visual materials and any biography, website or other unique textual information the artist creates.
In particular, copyrights as they apply to music are unique in that every track has two copyrights. One of these is a copyright in the song, i.e. the musical composition, which consists of the lyrics and underlying music (beat, instrumental). The other is a copyright in the sound recording or “master recording” itself. The “C” in the circle (©) is the appropriate notice for the lyrics and underlying musical composition, which are protected by the “Performing Art” Copyright. The appropriate notice is a “P” in a circle (℗) for the actual sound recording, which is protected by the “Sound Recording” Copyright. This indication originates from the International Phonogram Convention and refers to a “Phonogram”, which is used when referring to any sort of audio master.
The same party or several parties may own rights in each of these distinct copyrights for the same music. For example, “All Along The Watchtower” was originally written and composed by Bob Dylan. It has been subsequently performed and “covered” by several artists, including Jimi Hendrix. In this situation, the copyright in the underlying musical composition (the lyrics and musical arrangement) is owned by Bob Dylan (or his Publishing Company); while, the copyright in a particular sound recording is owned by Jimi Hendrix (or his Record Label).
This situation most commonly arises where a singer is merely involved in and has rights in the sound recording copyright of a song by being the actual featured vocalists on a track; while, the other parties who wrote the track own rights to the underlying musical composition.
Each copyright confers each owner with several exclusive rights. These include the exclusive rights to reproduce the work, including the mechanical reproduction of a musical composition in CDs, downloads and vinyl as well as to authorize third-parties to do the same. It also includes the exclusive right to distribute the work (Spotify, Pandora, YouTube), to prepare derivative works based on the original work (sequels, spin-offs), to publicly perform the work (concerts) and to publicly display the work.
Therefore, a copyright generally provides the owner with the exclusive right to publicly distribute copies of their work by sale, rental, or lease and to publicly perform or display the work, such as selling copies of a CD or publicly performing a musical composition at a restaurant or nightclub.
In the music business, the songwriter and composer typically assign their copyright in the underlying musical composition to a publishing company in exchange for receiving songwriting royalties. The income is generally split in half, even though the publisher collects all of the money (except for small performing rights). Fifty percent (50%) of the income goes to the publisher, and the other fifty percent (50%) of the income is split between the composer, the lyricist, the arranger, the translator, etc. The fifty percent (50%) that goes to the “publisher” is typically referred to as the one hundred percent (100%) “Publisher’s share” and the fifty percent (50%) belonging to the songwriters, arrangers, lyricists, etc. is typically referred to as the one hundred percent (100%) “Songwriter’s share.” For a more in-depth look at publishing monies, check my prior article on this topic.
Additionally, the copyright in the sound recording is generally assigned to a record label in exchange for receiving royalties for the sale and licensing of the sound recording. The sound recording copyright may be owned by the label and may be considered a “work for hire.” Included in this assignment may be a mechanical license, which authorizes the label to mechanically reproduce the underlying musical composition on phonograms or other sound carriers such as downloads.
In order to make records, downloads, tapes, and CDs, the record label requires a mechanical license from the music publisher. Until the first initial public release of the musical composition, the songwriter and publisher have complete control over issuing licenses. However, after this first release, anyone else can create their version of the song (a “cover” track) by paying statutory fees and obtaining a compulsory mechanical license.
A “compulsory license” is one that cannot be refused by the songwriter (or publisher), i.e., it does not require the songwriter’s permission for you to record his song. In the United States, The Harry Fox Agency is the foremost mechanical rights agency. It was created by the National Music Publishers Association to administer and issue these compulsory licenses and to collect the mechanical royalty license fees and distribute them to the appropriate parties. Additionally, when there are more than one owner of a particular copyright, unless there is an agreement to the contrary, each co-owner can license the full copyright to a third-party subject to an accounting to their co-author and paying over their share of the royalties.
As is evident, the music business and the rights associated with the works distributed are part of a complex system that has been developed over time and shifts with the changing landscapes and with the advent of new technologies. Therefore, it is essential for a creator to protect their rights in their completed work so they can properly license and monetize it.
This article is not intended as legal advice, as an attorney and/or an accountant specializing in the field should be consulted.