On the 1st Day of Music Law...

the distinctions between Musical Works and Sound Recordings.

If you are serious about your career in the music industry, be it an artist, manager, industry professional, or new media/tech company, it is imperative that you understand the foundation from which all music value is derived. Copyright. Copyrights, though intangible property, can be owned. And there can be significant value in that ownership.* But, ownership in those copyrights and the various rights granted to the copyright owner, is perhaps the most misunderstood area of the music business. So, on this 1st day of music law, let’s get back to basics…

The music business is driven by protection in two distinct musical creations – musical works and sound recordings. A musical work generally consists of musical notation and lyrics. It is the sheet music from which every performance and audio recording is based, even if the musicians performing or recording it did not read from sheet music. The sound recording is the audio rendition of a particular musical work. As Beethoven sits with pencil and paper in front of his piano, he creates a musical work. When the New York Philharmonic records that Beethoven piece for an album, they create a sound recording. These creations are distinct. They are protected separately under U.S. Copyright Law (and the copyright laws of many countries). So even if you are in the studio and record your jam session, in creating a sound recording you’ve also simultaneously created a musical work. You might not see the sheet music in pro tools, but it is there. Get it? No more presents for you until you understand this basic concept.

Sometimes the same party creates the musical work and the sound recording. For instance, a singer-songwriter that writes a song and records it now has ownership in two copyrights. Sometimes one party creates the musical composition and another party creates a sound recording. An artist that performs and records someone else’s song owns only one copyright – the sound recording. A songwriter that writes a song, but does not record it, owns one copyright too – the musical work. Two songwriters may collaborate and share equal ownership in one copyright, while one of those songwriters may perform and record that song and solely own the other copyright.

The rights granted in the two copyrights are distinct (though they also share similar rights too). Knowing these distinctions is important. On a basic level, if a recording is placed in a movie – a synchronized use – both copyrights are being utilized. The music supervisor for the production company must get clearance for both uses. Yet this simple concept is often overlooked by many amateur copyright owners. They grant some entity the right to utilize their sound recording without realizing that the underlying musical work is also being utilized, for which a separate license should be granted (and hopefully a corresponding license fee).

It does, however, get more complex than a straightforward master use license and synchronization license. When a musical work is recorded and then pressed into albums (vinyl, compact disc, or via digital download), the owner in the sound recording is reproducing the musical work (by recording a performance of it) and then distributing that musical work (through distribution of an album containing the underlying musical work thereon). This is known as a mechanical reproduction. And under copyright law, the owner of a musical work has certain rights of control over reproduction and distribution of the work, and then a guaranteed royalty payment once any third party is entitled to obtain a compulsory license to it. For a comprehensive discussion of mechanical reproductions, click here. Ultimately, if an artist owns both copyrights but enters into a recording contract and therein assigns its sound recording copyright over to a third party, in addition to any record royalties (from the sound recording) that the third party pays to the artist, the artist (as songwriter) will also receive a mechanical royalty based on the artist’s ownership in the musical work.

Copyright law also provides for a right of public performance in the musical work. Public performance generally includes live performance, radio broadcast, and online streaming. The owner in the musical work controls this right of public performance. Since it is extremely time-consuming and difficult to license this right to all the live performance spaces, radio stations, and online service providers, most musical work owners assigns a third party the right to grant these licenses on its behalf. In the United States, this third party is ASCAP, BMI, or SESAC. When a radio station broadcasts an album, it performs both the sound recording and the musical work. But only the owner in the musical work is entitled to a license fee. So when “I will always love you”, written by Dolly Pardon and recorded by Whitney Houston, is publicly performed on your local radio station (is it still played on the radio?), Dolly Pardon earns public performance royalties, but Whitney Houston does not. This is because the right of public performance by way of terrestrial radio broadcast does not extend to sound recordings. Sound recordings were recently granted a limited right of public performance only by means of “digital audio transmission”. SoundExchange is the organization that handles the licensing of and distribution of money for digital audio transmissions of sound recordings. An in-depth exploration of the public performance right in both musical works and sound recordings is the subject of the 8th Day of Music Law.

These are just a few of the distinctions between musical works and sound recordings. Before you even decide to embark on a career in the music business, learn these distinctions. You’re not expected to know everything. But a failure to understand even the most basic concepts that are so central to this industry exposes your naivete to business at the least, and far worse, could mean your loss of ownership in rights and revenues you never even knew you had or were entitled to.

*Of course, value is not only derived through protection in copyrights. Nothing can replace talent or the live performance. Even without copyrights, there will only be one you… what inherent value do you bring?

Disclaimer: The materials contained in this blog posting have been prepared by Beame & Mencher LLP for informational purposes only and are not legal advice or counsel. Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship. Online readers should not act upon any information in this posting without seeking professional counsel. The information contained in this posting is provided only as general information, which may or may not reflect the most current legal developments.

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