MUSIC RIGHTS: how does it work?

As the backbone of the music industry, music rights are essential to understand in order to not make mistakes, to know what is being given away and, above all, to know where to collect the royalties they generate. So what are music rights?

“What’s your share of the neighboring rights on this recording?” – “Do you have a co-publishing contract for this work?” – “Are you a featured performer or an accompanist?” 

If you’ve never heard these kinds of questions and you’ve signed a contract with a label or a publisher, this can be problematic. But it’s never too late to finally understand what you’ve signed.

Fortunately, thanks to Groover, you’ll be able to better understand the rights in the music industry and sign contracts that make sense for your career and your bank account. In this article we outline the difference between publishing rights, phonographic rights and synchronization rights.

1. The rights on the musical work (publishing rights)

We will avoid defining legally what copyright is so that we don’t lose everyone in the first paragraph.

In short, copyright in music is what protects a fixed original work (recording or score writing) for a period of 70 years (in France) after the death of the last of the co-authors of the work.

• Who is affected by copyright?

The authors and composers are the first beneficiaries of the work. They share (usually) half (50% for authors / 50% for composers) of the total copyright of the work.

They are the first beneficiaries of the work, because it is possible that after its creation, the rights of the work may be transferred to a publisher who will be able to commercially exploit and perpetuate the work for a period of time.

We will outline in a future article the role of the publisher and how to negotiate a publishing contract that makes sense with your project.

Who manages copyright in France? Sacem. Once the splits (the division in % of copyright on the work) are agreed upon between the authors/composers (or even the publisher) and the musical work is declared to the copyright management societies (Sacem in France), royalties can arise from its exploitation thanks to the copyright from numerous sources:

– The public performance right (DEP) when a musical work is broadcast (on TV, radio, in bars…) or played in concert.
– The mechanical reproduction right (DRM) when a work is reproduced on a CD, played in streaming on demand, and downloaded digitally (Itunes, ringtone).

Of course, each music rights society determines its own system of distribution of DEPs and DRMs.
For example, Sacem collects the DEPs and redistributes the revenues in a statutory way (2/3 for the authors/composers and 1/3 for the publishers). DRMs are collected with the help of the SDRM, whereas in the USA, they are managed by mechanical rights management companies such as Harry Fox Agency or Loudr.

• Who is responsible for declaring and managing these rights?

These rights are managed by a publisher or by you. Indeed, it is quite possible to edit your own works to collect these rights, even if it can be complex.
We will go into more detail in our next article “How to sign a publishing contract”.

2. The rights on the sound recording (phonographic rights)

Before going any further, it is important to specify that the sound recording is the so-called master tape (nowadays: a digital file) on which the work was recorded. The owner of the master tape (also called the producer) is the one who finances this fixation of the work (studio hours, mixing …).
Example: if you are an independent artist and you have recorded and mixed the whole of your next EP on your computer in your room, you are the producer of your music. So you have rights on the recording that can make you money if you declare them in the right way.

| Read more: 5 mixing tips and tricks: How to make your music sound good

• Sales

As a producer and master tape rights holder, it goes without saying that it is necessary to distribute (physically and/or digitally) your music in order for your sound recording to be listened to and to make money.
You have 3 options to choose from:
– Self-distribution via your concerts and/or merchandising (CD sales)
– Physical distribution (CD, vinyl, cassette…)
– Digital distribution (streaming platforms, downloading, Youtube)

A distributor then acts as an intermediary between sales outlets for physical distribution (CDs and vinyls) and between streaming and downloading platforms for digital distribution.
They make your music available to listeners, provide you with sales reports, and pay you as the master licensee in exchange for a sales commission or annual fee.
Different partners may offer to distribute your music at competitive fees or even free of charge like Amuse. It’s up to you to make your choice in this competitive market.

| Read more: Digital Music Distribution – Workshop #3 Groover Tips

• Neighboring rights

As noted above, songwriters and composers have copyright in their works and receive royalties for the exploitation of their works.
In parallel to copyright, producers and performers have rights- known as neighboring rights- on the sound recording because of the financial contribution of the producer and the artistic performance of the musicians. They then receive royalties related to the public exploitation of their sound recording.

As with copyright, management societies are responsible for collecting and redistributing these rights to producers and performers in the following manner:
– The right to equitable remuneration, which provides remuneration for the public performance of sound recordings.
– The right of reproduction or authorization that allows you to receive royalties when your neighboring rights collective society authorizes music services to reproduce your recording (streaming platforms for example).
– The right related to the Private Copying regime which provides royalties to producers, performers and also authors/composers for the private copying of sound recordings and the work. Warning: this Private Copy regime is not equal and up to date in all countries of the world.

In order to collect these royalties, it is therefore necessary as a producer to register and declare your song recordings with the neighboring rights management society of your choice :
SCPP or SPPF in France, PPL in the UK, SOPROQ or CONNECT in Canada .
In the same way, as a performer, you must register and declare your recordings as a “Featured” or “Accompanist” performer with the neighboring rights management company of your choice:
ADAMI or SPEDIDAM in France, PPL in the UK, ARTISTI, MROC or ACTRA RACS in Canada .

Revenues from neighboring rights are divided equally (50/50) between producers and performers.

As previously mentioned for Private Copying, each country has its own legislation in terms of neighboring rights and the United States, the largest music market in the world, has some restrictions on this subject:
Music services (radio and TV) are exempt from paying neighboring rights licenses.
No redistribution of neighboring rights from abroad is made for American producers and performers, although these foreign countries collect them. These royalties therefore go into the common pot (known as the “black box”) of the neighboring rights management societies in each country where the sound recording was reproduced or performed and are then redistributed to local producers and performers according to their market share.

On the other hand, the United States authorizes the collection and redistribution of neighboring rights (via Sound Exchange) from digital radios (iHeart Radio, Sirius XM, Pandora, etc.) allowing producers and performers to receive compensation for sound recordings played in North America.

3. The right of synchronization

Synchronization is the use of pre-existing music (as opposed to original music) in an audiovisual production.

In order for a sync to be possible, a process is set up called “clearer” and it happens as follows:
– From the point of view of the work, the authors/composers or the publisher negotiate a fee with the music supervisors (or audiovisual producer) for the work to be used in an audiovisual production.
– From the point of view of the sound recording, it is up to the producer or publisher (if mandated) to negotiate a fee with the music supervisors (or audio-visual producer) for the sound recording to be used in an audio-visual production.

As you can see, there are two music rights- publishing and phonographic- to be given up and therefore to be paid by the audiovisual producer, grouped in a single fee called a “Sync fee”.

The Sync fee gives the owners of the work and sound recording the power to negotiate a fee for the use of their music in an audiovisual production.
Once the rights have been cleared for synchronization, it is important to file a cue sheet (or audiovisual content report) with your managing rights society because royalties may be paid to copyright owners when the audiovisual production is broadcast to the public.

In summary:

To get a bigger picture of music rights,  every piece is legally split in two parts: it is made up of a work (lyrics and composition) and a sound recording (financed by the producer, performed by the performers).
The ownership of these two components is protected by rights- as a reminder, rights in music include publishing rights, phonographic rights and synchronization rights- and it is important to register and declare them to the managing rights societies to receive your royalties when your music is reproduced, used, or broadcast in public.

– Article translated by Mackenzie Leighton –

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