How Do Music Royalties Work? Composition Rights Explained
How Do Music Royalties Work? Composition Rights Explained
Where Does Music Publishing Fit?
Key Takeaways
Every recorded song contains two separate copyrights: the composition and the sound recording.
The composition includes the melody, lyrics and underlying musical work.
Three of the main composition rights are the Performing Right, Mechanical Right and Sync Right.
A single stream can generate both performing-right and mechanical royalties.
Songwriters and publishers receive income in separate roles.
The songwriter’s share and publisher’s share are accounted for separately.
Music publishing manages and commercially exploits rights in the composition.
Sync placements normally require permission for both the composition and the sound recording.
Accurate splits, registrations and publishing information are essential for receiving composition-side royalties.
Understanding how music royalties work can sometimes feel like trying to read your astrology chart for the first time: chaotic, mildly intimidating and packed with unfamiliar terminology.
Composition rights, master rights, performing rights, mechanical rights, neighbouring rights and music publishing can sound as though everyone is describing the same thing using different words.
They are not.
Each term refers to a specific copyright, a distinct income stream or a particular person or organisation receiving the money. In this article, we'll focus on the composition side of a recorded song: performing rights, mechanical rights, sync rights and music publishing.
Grab a coffee and let's dive in!
Every Song Has Two Copyrights
A recorded song normally contains two separate copyright-protected works:
The Composition
The Sound Recording
Almost everything else in music rights follows from this distinction.
Understanding the difference between composition rights and master rights is the foundation of understanding how music royalties work.
1. The Composition
The composition is the underlying song.
It includes:
the melody;
the lyrics;
the underlying musical work.
The composition exists independently of any specific audio recording.
The composition is initially created by the songwriter or songwriters. Ownership or control may later be shared with, assigned to or administered by a music publisher, depending on the agreement.
One composition can be recorded many times. A song might appear as an original version, an acoustic cover, a remix or a completely new recording, while the underlying composition remains the same copyright-protected work.
2. The Sound Recording
The sound recording, commonly called the master, is the specific recorded version of the song.
It is the captured audio: the particular performance, production and mix that you hear when you press play.
The recording may be owned by:
a recording artist;
a producer;
a record label;
an independent artist who funded and released the track;
several parties, depending on the agreement.
The sound recording is a separate piece of intellectual property from the composition.
This means that one composition can have several different recordings, each with its own master owner.
For example, if three artists record the same song, they may all use the same underlying composition, but each version creates a separate sound recording.
Composition Rights
The composition side includes three of the main rights associated with a musical work:
Performing Right
Mechanical Right
Sync Right
Different uses of a composition may trigger different rights and generate separate income streams.
1. Performing Right
The performing right allows the copyright owner to control the public performance and communication of the composition.
It may be triggered when music is:
broadcast on radio or television;
performed live in public;
streamed online;
played in shops, gyms, restaurants or other public spaces.
Businesses, broadcasters, venues and digital services usually need permission to use copyrighted music. Depending on the territory and type of use, this permission may be provided through a blanket licence, a direct licence or another licensing arrangement.
A Performing Right Organisation, commonly shortened to PRO, or another type of Collective Management Organisation, may license these uses, collect the resulting royalties and distribute them to the rightsholders it represents.
Examples include:
PRS for Music in the UK;
ASCAP, BMI and SESAC in the United States;
APRA AMCOS in Australia and New Zealand;
GEMA in Germany;
SACEM in France;
SIAE in Italy.
These organisations represent songwriters, composers and music publishers, although their structures and collection systems vary by territory.
Who gets paid?
Performing-right royalties may be distributed to:
the songwriter or songwriters;
the publisher, where a publisher owns, controls or administers a registered share.
The songwriter’s share and the publisher’s share are accounted for separately.
A songwriter may receive the songwriter’s share directly through their performing right organisation. The publisher’s share is paid according to the work’s publishing registration and the applicable agreements.
A songwriter who also controls their own publishing may be able to receive both shares, but they receive them in two separate roles: as the songwriter and as the publisher.
Performing-right royalties may be generated each time the composition is publicly performed, broadcast, streamed or otherwise communicated to the public, subject to the rules and reporting systems of the relevant territory and collecting organisation.
2. Mechanical Right
The mechanical right is the right to reproduce the composition—in other words, to make a copy of the underlying musical work.
It may be triggered by:
manufacturing CDs and vinyl records;
digital downloads;
reproductions created as part of certain streaming services.
Mechanical rights were historically associated mainly with physical formats, but streaming and digital downloads are now important sources of mechanical royalties.
Depending on the territory and type of use, mechanical royalties may be licensed, collected and distributed by:
a mechanical-rights organisation;
a collective management organisation;
a music publisher;
a publishing administrator.
Examples include:
MCPS in the UK, which collects mechanical royalties when registered works are reproduced in formats including physical products, downloads and streaming;
The MLC in the United States, which administers the blanket mechanical licence for eligible digital streaming and download services.
Who gets paid?
Mechanical royalties may be paid to:
the songwriter or songwriters;
the publisher, where a publisher owns, controls or administers a registered publishing share;
a self-administered songwriter, depending on the collection system and territory.
The songwriter’s share and the publisher’s share remain separate.
The songwriter receives income in their role as the writer of the composition.
The publisher receives income where it owns, controls or administers the relevant publishing share under an agreement.
A single stream may trigger both:
a performing-right payment;
a mechanical-right payment.
This is because streaming can involve both the communication of the composition to the public and the reproduction of that composition.
3. Sync Right
The synchronisation right, commonly shortened to the sync right, is the right to pair a composition with visual media.
This may include:
films;
television programmes;
advertisements;
video games;
trailers;
online visual content.
Unlike many performing-right and mechanical uses, sync licences are usually negotiated individually rather than covered entirely by a blanket licence.
To use an existing recording in visual media, two separate permissions are normally required:
a sync licence for the composition;
a master-use licence for the specific recording.
The publisher, composer or another party authorised to control the composition usually handles the sync licence.
The record label, independent artist or other master owner usually handles the master-use licence.
This means that one sync placement can involve both sides of the song:
the composition side;
the recording side.
Where Does Music Publishing Fit?
Music publishing belongs on the composition side, but it is important not to treat publishing as a third copyright.
The two copyrights remain:
the composition;
the recording.
Music publishing refers to the commercial management and exploitation of rights in the composition.
A publisher may:
register musical works;
register and administer publishing shares;
collect publishing income, including performing and mechanical royalties;
negotiate sync licences;
pitch compositions for commercial opportunities;
investigate missing or unmatched income.
The songwriter and publisher may both receive money from the same composition, but they receive income in different capacities.
Songwriter’s Share: The songwriter’s share belongs to the songwriter or songwriters according to their agreed writing splits. For example, if two writers agree to divide a composition equally, each may receive an equal portion of the songwriter’s share.
Publisher’s Share: The publisher’s share is distributed according to the publishing ownership and administration registered for the composition. An unpublished songwriter does not necessarily receive the publisher’s share automatically. This depends on their publishing setup, registrations and territory.
Where a songwriter creates or owns a publishing entity and acts as their own publisher, they may receive:
the songwriter’s share in their role as songwriter;
the publisher’s share in their role as publisher.
They remain two separate roles, even when the income ultimately reaches the same person.
How Can One Use Generate Multiple Royalties?
A single use of a composition can trigger more than one royalty stream.
For example, a stream may generate:
a performing-right payment because the composition is communicated to the public;
a mechanical-right payment because the composition is reproduced as part of the streaming process.
The same stream may also generate separate recording-side income for the use of the master.
These payments may follow different collection routes and reach different rightsholders.
This is why songwriters and publishers need accurate writing splits, publishing information and registrations.
Want to Start Producing But Not Sure Where to Start?
Final Thoughts
Music royalties become easier to understand once the composition and the sound recording are treated as separate copyrights.
On the composition side, three of the main rights are:
the Performing Right;
the Mechanical Right;
the Sync Right.
Songwriters and publishers may receive income from the same composition, but they receive it in separate roles.
A single use, including a stream, can also trigger more than one royalty payment.
Understanding your composition rights is only the first step. You also need accurate writing splits, publishing information and registrations so that collecting organisations can match the income to the correct rightsholders.
The recording side follows a different system that we will cover in the next article.
FAQ
Reference List and Further Reading
UK Intellectual Property Office — Copyright Overview
WIPO — Intellectual Property and Music
PRS for Music — Music and Royalties
MCPS — Mechanical Rights
UK Intellectual Property Office — Copyright Ownership
APRA AMCOS — Music Rights and Royalties
