The music business can be extremely convoluted, often by design, making it difficult for artists and songwriters – particularly those that are independent – to get paid for their work. There are nine revenue-generating rights in the music business, many of which require rights holders to be a part of multiple organizations. Many of these are equipped to pay you for work you are ALREADY DOING.

Being that this is how artists and songwriters make a living, I feel it is critical to democratize this knowledge. Frankly, it’s absurd that the most music curriculum does not include the business side of things. Sadly, this refers to many college and university programs as well. I won’t name names, but I was talking with an extremely talented songwriter who is LITERALLY majoring in songwriting at on the of largest universities in Washington and they were not aware of music publishing.

I digress. Let’s get to it.

The music world can be split into two umbrellas:

Sound Recording (who owns the sound recording copyright, aka master rights holder)
Publishing (who owns the composition copyright)

The sound recording is exactly what you think it is. It is the master recording of a given song. This is the commodity end consumers are most familiar with (often the only commodity we recognize as a society). Publishing refers to the underlying composition (music and lyrics).

Publishing Rights

I want to start with the six revenue-generating rights on the publishing side of the house. When I say publishing, I mean the rights to the original copyright. This is the music and lyrics. Not the sound recording. Here are the six revenue-generating rights:

Mechanical rights yield - you guessed it - mechanical royalties, which come from the reproduction and distribution of underlying compositions embodied in sound recordings sold as physical media, downloads, or accessed as on-demand streams. These rates are set by the Copyright Royalty Board, a trio of federal justices operating under Congressional jurisdiction.
Performance rights. These likely go beyond what you’d think of as a performance. Naturally, this encompasses the performance of a song at a live show. However, “performance” also includes a given song being played digitally over radio, digital radio, cable radio, TV broadcast, venues, and public facilities. These rates are governed by the Department of Justice consent decrees placed on the two largest PROs—ASCAP and BMI—with rate-setting overseen by the Southern District Court of New York.
Synchronization rights refer to the use of underlying compositions in congruence with moving images. This can be in the form of film, television, and/or advertisements. These are the private market negotiation with the rights owner(s) of the musical works and the party interested in using the song.
Derivative rights fall under the songwriting copyright. This is when someone takes a preexisting work and uses that material to create a new composition. The most common example of such is sampling a song. As you may know, you cannot sample someone else’s copyrighted work without permission. Only the owner of the underlying copyright is the only one who has the right to create or authorize someone else to create a derivative work or new version of their work.
Print rights. I find easiest to explain within the context of a print license. These are agreements between a music user and the owner of a copyrighted composition (song), granting permission to rearrange, print, or display the music notes or lyrics of the song. This would be someone coming to me and asking if they could print sheet music of my song, or even use it on merch. For example, when Coca-Cola prints song lyrics on a soda can, even if it’s a small fraction of the song, they need a print license. The person who wrote the song (or their publisher) gets paid for every print.
Grand rights is a special type of music licensing, referring to the right to perform musical compositions within the context of a dramatic work. This includes stage performances such as musical theater, concert dance, and arrangements of music from a dramatic work. They key difference between this and sync rights is that sync rights refer to individual performances of a song, where grand rights cover the right to present the show in its entirety on stage. This does not include medleys, video footage, logos, etc.

Sound Recording Rights

You still with me? Right on. Let’s get to the sound recording rights. This is how master rights holders can exploit the sound recording. Think of this as how record labels work.

Right to reproduce and distribute (aka “mechanical reproduction right of a composition”). In the same way mechanical royalties are collected on the publishing side, this refers to the reproduction and distribution of the sound recording, as opposed to the IP. This includes the song in the form of a digital download (think Bandcamp or iTunes), vinyl records, CDs.
Performance rights for the use of the master recording across interactive and non-interactive streaming mediums.
- Digital performance royalties are typically handled by record labels or distributors. If you’re independent, this means distributors like Distrokid, Tunecore, CD Baby, and more. Public performance rights today are most prevalent for interactive streaming performances. This is when a given song is played on Spotify, Apple Music, etc.
- Non-interactive streaming performance indicates the digital performance rights for the sound recording, which requires master rights holders to be registered with SoundExchange. This is critical to getting paid for a song being played on the likes of non-interactive streaming services – meaning services where the listener does not curate the listening experience – such as SiriusXM, Pandora, NPR streaming, and webcast stations.
Derivative right to re-record a previously written/recorded song. This includes remixes. For example, when Dua Lipa decides to remix “Levitating” with DaBaby, the master rights holder has the rights to the derivative recording. This also applies to sampling. If someone samples a sound recording, the original master rights holder has the rights to those sounds - therefore, (a part of) the derivative work.

Four Organizations You Must to Register With

Performance Rights Organization (PRO): Every time you perform a song live you are supposed to get paid for it. Too many of my friends that are working musicians are not signed up for a PRO and have literally missed out on performance royalties for years. As noted above, PROs are also responsible for collective performance royalties across any digital “performance” of a song. This includes radio (songwriters & publishers only), film, TV, etc. The largest PROs are BMI, ASCAP, and SESAC. It is critical to register as both a songwriter and a publisher (if you are self-published).
The Mechanical Licensing Collective: The Mechanical Licensing Collective (MLC) was established by the Music Modernization Act in 2018. It created a central body to administer blanket mechanical licenses to eligible streaming and download services (i.e., Spotify, Apple Music, Rhapsody, etc.) in the United States. The MLC collects the royalties due under those licenses and pays songwriters, composers, lyricists, and music publishers. You will not be able to collect on these royalties generated by YOUR MUSIC unless you are registered. Worse yet, unrecouped royalties for independent musicians/songwriters will be redistributed to the three major publishers if unclaimed within three years of its inception. So get on it!
SoundExchange: SoundExchange is a non-profit collective rights management organization that collects royalties for ALL sound recordings played on non-interactive digital radio (i.e., Pandora, SiriusXM, NPR Streaming, etc.). This includes recordings and soundtracks made by actors, comedians, and spoken word artists in addition to musicians.
Distributor/Aggregator: If you are releasing music to major digital service providers (DSPs) you have already done this. These are companies like CD Baby, Tunecore, DistroKid, etc. that deliver your recordings to the major streaming services and digital download platforms.

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