The music business can be complex and confusing. There are several layered levels of ownership. Albums have songs, and those songs have their own splits between songwriters, publishers, record labels, producers, artists, and musicians. Sometimes these claims can overlap or leave gaps, but this article should help you understand revenue streams and maximize the monetization of your music. You should not leave any money on the table or in the ether.
There are many streams of income that you can miss out on entirely unless you know how to report and collect what’s due. Between mechanical royalties, performance royalties broken into songwriting royalties and publishing royalties, digital performance royalties, retail sales like CDs and vinyl, digital sales like streams and downloads, master use and sync licenses for film, television and video games, ringtones, print/sheet music, radio, and further, there are emerging markets like the Metaverse, Web3, Blockchain, NFTs, and other technologies we haven’t even encountered yet, but they all still rely on copyright law. We’ll go over the importance of split sheets, metadata, and registrations here.
SONG = MUSICAL WORK + SOUND RECORDING
If you take a close look at a LP sleeve or CD booklet, or metadata with a digital file, you’ll see some information about who owns what:
The P line – ℗ – shows the owner of the sound recording or phonographic copyright.
The C line – © – shows the owner of the musical work or composition copyright.
These notices haven’t been technically required since 1989, but they’re still useful and widely used.
Musical works are also known as music or compositions. Think sheet music, or whatever can be embodied on a page in 2D, including notes, chords, and lyrics. Songwriters are lyricists and/or composers, and publishers help those writers capitalize on their works by connecting them with different opportunities for placements. The sound recording, on the other hand, is what captures or embodies that musical work so a listener can hear it. Sound recordings are also called tracks or masters. Think of a waveform, or whatever can be heard when you press play. Record labels can be heavily involved in the creative process or just distributors, but they try to have your music reach far and wide. You can’t have a sound recording without an underlying work, but the composition can stand alone on its own and have rights apart from recordings.
The musical work and the sound recording each have separate and distinct copyrights, which can then have their own separate and distinct splits. The songwriters and publishers split the money brought in from exploiting musical works with public performances, mechanical royalties, and synchronization licenses; while record labels, artists, producers, and distributors usually split income from sound recordings including record sales, streaming royalties, master use licenses, and SoundExchange.
It may be helpful to distinguish between samples and covers here. Samples use sound recordings for new renditions, while covers only use the composition and record all new parts. If you’re interested in using a composition or recording someone else created, Songview can tell you who owns what and when it was created, and the copyright office can tell you if/when something was registered.
Split sheets are key, and you shouldn’t be shy about discussing ownership at the outset. Best to put in place as soon as you can after creating a new composition with anyone else, to decide together exactly who owns what percentage. Without an agreement in place, the rule of thumb is that any contributor to the song’s creation has an equal right to it as any other creator, meaning a 50/50 or 25/25/25/25 split by default as “joint authors” of a “joint work”. If someone’s contribution is “work for hire”, either by virtue of an actual employee/employer relationship or a written agreement, then the employer owns the copyright.
Copyright protection is automatic. Copyrights exist from the moment a musical work or sound recording is created until 70 years after the death of the last living author/contributor. As soon as something is created and captured/fixed, the copyright exists/subsists. Still, registration of copyrights can be helpful from an administration and enforcement perspective to fight infringement. The bundle of rights includes the six exclusive economic rights of reproduction, preparation of derivative works, distribution, public performance, public display, and digitally transmitting sound recordings.
The best analogy/framework I’ve heard for this is to look at the song like a baby and decide who is responsible for the characteristics that make it most unique, then split it accordingly. Producers may get songwriting credit (and publishing royalties) or points (which give sound recording royalties) or both. There are several tools and resources that make this easy, like SongSplits.
YouTube recently launched the Creator Music hub for licensing that will help simplify that process for that platform. You’ll also want to register your songs with the distributor, performing rights organization (PRO) such as BMI, ASCAP, SESAC, or GMR, the Mechanical Licensing Collective (MLC), Music Reports, Inc. (MRI), the Harry Fox Agency (HFA), Songtrust, SoundExchange, and any other catalogs such as the CCLI and CCS for Christian material.
Metadata and Unique Identifiers
IPI: Interested Party Identifier assigned by your PRO and much like an EIN or SSN or TIN, but specifically for music – legal name as songwriter
IPN: International Performer Name (PKA professionally known as)
ISWC: International Standard Word Code like a barcode for the composition
ISRC: International Standard Recording Code like a barcode for the specific recording/rendition/version (Live vs Studio)
EIN: Employer Identification Number for entity, which is important to have on Form W-9s for IRS reporting purposes
Remember that recognizing revenue/income means paying taxes, so it is best to set aside enough money to cover any tax hits, or have a CPA help you strategize with different approaches.
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