Music Publishing Money Explained pt. 1: The Two Copyrights

Copyrights: The Most Basic Building Blocks for Understanding the Music Industry and collecting Music Publishing Money

Let’s face it. The inner workings of this music industry stuff can be reeeeeeally tricky to understand. And honestly, many execs out there count on you not understanding how all this works so they can tax you for your ignorance. Even as we’ve delved into topics such as ISRCs and The MLC, I’m sure there are many of you who still may be saying, “Well cool, but what does this all mean in context? How does all of this fit together?” That’s why here in this multi-part series called “Music Publishing Money Explained”, we’ll be taking a big step back and breaking down the big picture. The first and most fundamental piece we will be looking at is the two copyrights associated with music. Let’s break it down:

What is a Copyright?

As defined by the U.S. Copyright Office,

“Copyright is a type of intellectual property that protects original works of authorship as soon as an author fixes the work in a tangible form of expression.”

copyright.gov

This means that whenever you create a song, either by writing lyrics, creating a melody, or making a beat, you actually create a copyright, automatically. As long as whatever you create is in a “tangible form”, such as writing it on paper, typing it on a computer, or recording it in the studio, you now own a copyright, which in turn offers you certain legal protections under copyright law.

So what are those protections exactly? Well, according to U.S. Copyright Law, copyright holders are granted 6 exclusive rights, which include reproduction, derivative works, distribution, public performance, public display, and digital audio transmission rights. More info on what exactly these are and what all they provide can be found here.

In addition to this, copyright owners are granted these rights for a specific amount of time. According to the U.S. Copyright Office, ownership and protection of a copyright created after January 1st, 1978 lasts for the life of the longest surviving author plus 70 years. However, if the work is created with an unknown author, under a pseudonym, or as a work for hire, then the term lasts for 95 years from the year of its first publication, or a term of 120 years from the year of its creation, whichever expires first.

One important thing to note is that copyrights are often confused with trademarks, patents, and trade secrets, which are the other main types of intellectual property. While these do provide certain levels of ownership and protection in their own right, they apply to other types of intellectual property that are a bit beyond the scope of this article. If you want some more information, check out the USPTO website.

Okay Cool, So What Does All This Have to Do with Music Though?

This copyright stuff is important because anytime you write and record a song, you actually create 2 different copyrights that you now own: The Composition Copyright and the Sound Recording Copyright. These copyrights actually generate money for you in many different ways, and technically the owners of each copyright are different as well. Let’s break it down:

The Composition Copyright

As defined by the US Copyright Office,

“A Musical Composition consists of music, including any accompanying words, and is normally registered as a work of performing arts. The author of a musical composition is generally the composer and the lyricist, if any. A musical composition may be in the form of a notated copy (for example, sheet music) or in the form of a phonorecord (for example, cassette tape, LP, or CD).” 

copyright.gov

This basically means that the “composition” refers to the lyrics and melody that make up a song. It’s essentially the parts of the song you could write down on paper as sheet music if this were “ye olde times”. As far as ownership of the Composition Copyright is concerned, you as a songwriter, lyricist, and/or composer actually own the copyright(s) to the compositions you create whenever you initially write the song.

The Sound Recording Copyright

As defined by the US Copyright Office,

“A Sound Recording results from the fixation of a series of musical, spoken, or other sounds. The author of a sound recording is the performer(s) whose performance is fixed, or the record producer who processes the sounds and fixes them in the final recording, or both. Copyright in a sound recording is not the same as, or a substitute for, copyright in the underlying musical composition.”

copyright.gov

The sound recording (as the name suggests) is a song that exists in the form of “audio media”, such as the .wav and .mp3 files that exist in your computer, or the CDs, cassettes, or vinyl records that were made and purchased back in the day. The sound recording copyright doesn’t exist until you actually record the initial composition that you’ve written, whether that’s a full studio production, or even something as simple as a voice memo on your phone. As long as it’s recorded in some way, a sound recording copyright will now exist for that recording. Now, when it comes to ownership in this case, the performers, producers, and audio engineers actually own the copyright to the sound recording they created.

So Wait, Then What’s the Difference Exactly? Are These Not the Same Thing?

Well, not exactly. The U.S. Copyright Office has a nice chart that breaks down some of the differences from technical/legal perspective:

On a basic level, this is cool and gets to the essential points, but this still doesn’t get to the most important difference between the two: the money.

Some of the most important differences between the Composition Copyright and the Sound Recording Copyright are who controls these copyrights, and how you get paid from each of these copyrights.

For the Composition Copyright, while you as a songwriter, lyricist, and/or composer technically own the copyright (along with your co-writers) upon creation, it’s actually a Performing Rights Organization (PRO) that pays you most royalties generated solely from the Composition Copyright. This includes public performance, broadcast (included under public performance), and digital public performance (from streaming).

Additional royalties such as sync and print royalties typically get paid directly to the composition copyright holder via their publishing company/entity. The Composition Copyright is also typically divided into a writer’s share and a publisher’s share (which is also where publishing companies come into play), each of which we’ll get into more in depth in future articles (remember, this is only part 1).

For the Sound Recording Copyright, while you as a performing artist, producer, and/or audio engineer may technically own the copyright upon creation, it’s actually your record label or distribution company that actually pays you the royalties generated from the Sound Recording Copyright. This includes physical and digital album/EP/single sales from record stores or digital stores like iTunes and Amazon Music, as well as sales equivalents generated from interactive streams on streaming services such as Spotify, Tidal, and Apple Music.

In most instances, whenever you sign a record deal with a label, they take full or partial ownership of your Sound Recording Copyright in exchange for their services, plus usually an upfront advance. We’ll cover this topic more in depth in a future article, because there is a LOT to unpack with that.

Here is a little chart that we’ve created that may help visualize what we’ve been talking about so far. Some things in this chart such as mechanical royalties and neighboring rights we’ll get into later on in this series.

Some Common Copyright Myths

So as we’ve been discussing copyrights thus far, especially as it pertains to you and your music, there’s a good chance you may have heard some of these ideas surrounding copyrights, all of which are not accurate. That’s why we want to take a quick second and put to rest some misinformation that’s out there:

Myth #1: The Poor Man’s Copyright

This is one of the most commonly held misconceptions here in America: that you can simply mail your work to yourself via certified mail (or get your work notarized), and that will “prove” your ownership of said copyright and offer you legal protection. Unfortunately, this method offers you zero protections under the law, and will leave you just as vulnerable as before, only now you’re slightly poorer since you just wasted your money on postage.

Myth #2: Public Access = Public Domain

Just because something is out there on the internet and is accessible to the public doesn’t mean that it’s allowed to be used freely. While there are certain licenses that allow for certain non-commercial uses and sharing (such as the Creative Commons License), copyright owners are still entitled to their protections and rights surrounding usage and distribution, just as you are with your own works. However, certain works where the copyrights have either been relinquished, forfeited, or expired, do fall under public domain and are free to use without the original owners’ permission. Many classical works and common Christmas songs fall under Public Domain (article on this topic coming soon).

Myth #3: The “7 Second” or “30 Second” Rule

This is an unfortunately common myth, especially when it comes to sampling. The common misconception is that under the fair use law, one can use 5, 7, 12, 30, etc seconds of a song and it won’t count as copyright infringement. This has caused some creators to get in hot water, because in 2001, the Sixth Circuit actually held that a filmmaker’s repeated sampling of two seconds of a copyrighted sound recording constituted infringement and not fair use under the law. If you use someone else’s copyrighted material without permission, no matter the length of the sample, it still constitutes copyright infringement. That’s why we recommend a site like Tracklib where you can find records to sample without having to worry about all those clearance issues.

Benefits to Registering Your Copyrights with the US Copyright Office

So with all this potential for copyright infringement, how can you protect yourself and your works? Fortunately, since you and your collaborators already technically own the copyright upon creation, as long as you have some sort of tangible proof of ownership, you do have some protections according to the law.

If your work was created after January 1st, 1978, then you are not technically required to register your work with the U.S. Copyright Office. However, doing so may provide some advantages, mostly the ability to file a lawsuit for copyright infringement and receive monetary compensation for damages. For a fee of $45 for a single author and $65 for other filings, it could be worth it if there is a risk that your work could be infringed upon.

More information on filing fees with the U.S. Copyright Office can be found here. Also, you can find out how exactly to register your works here with the U.S. Copyright Office if you wish to do so.

Do you want to protect the works that you own? And do you want to understand where your royalties are really coming from? Then the first step is to understand these two copyrights.

That’s also why here at Gvngaroo Publishing, we not only help you collect all music publishing money from around the globe, we also help you understand exactly how this money is being generated and where exactly it’s coming from. It’s your money at the end of the day, so shouldn’t you understand how you’re making it?

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