What are copyright and master rights?

We might gather only bits of information from brief articles, missing the whole picture.  

However, knowing the ins and outs of this industry is vital for making informed career choices and maximizing earnings. 

What is copyright? 

Songs come with various rights attached, primarily encompassing copyright and master rights. These rights involve different contributors in the song-creation process, including authors, composers, songwriters, publishers, producers, performers, and labels.  

Copyright specifically pertains to authors, composers, songwriters, and publishers, encompassing two significant royalty types: performance and mechanical royalties. Performance royalties are for public playing of songs, like in restaurants requiring licenses to play music. Meanwhile, mechanical royalties apply to reproducing songs on physical goods, such as CDs, with labels paying for each manufactured CD.  

In the streaming era, performance and mechanical royalties are generated when a user plays a specific track on platforms like Spotify. However, non-interactive streaming services like Pandora or certain Spotify radio only generate performance royalties. Understanding these distinctions sheds light on how royalties are generated in various music consumption scenarios. 

Who collects copyright royalties? 

In Europe, managing copyright royalties follows a straightforward process through traditional Collective Management Organizations or Independent Management Entities (like Bridger). Registering with one of these entities streamlines the collection of your royalties across various platforms like TV, radio, live performances, streaming services, and public venues.  

These societies typically involve a membership fee, possibly renewable yearly, and commission deductions from your earnings. Commission rates differ based on where your work is broadcasted, for instance, taking a 10% commission on streaming revenues but 25% on traditional TV channels.  

However, in the United States, the system varies. Performance Rights Organizations handle public performance rights, while Rights Administration Entities or Mechanical Rights Organizations manage mechanical rights. Americans seeking comprehensive copyright management are generally affiliated with a PRO and an RAE, unlike Europeans who work primarily with one organization, simplifying the process. 

What are master rights? 

Master rights involve two key players: performers (like singers or instrumentalists) and producers, focusing on the recording of a musical piece. This domain encapsulates their contributions to the recording process.  

Like copyright, master rights are collected through two main channels: historical platforms like television, radio, and public venues, and modern streaming platforms such as Spotify, Deezer, and YouTube. 

Who collects master royalties? 

Each country operates its collective management organizations for music aired on historical channels, responsible for gathering and redistributing master rights from TV, radio, clubs, and public venues to performers and producers. 

However, today, artists reach their audience on streaming platforms, commonly known as DSPs (Digital Service Providers). To have your music available, you can either register with digital distributors like Winamp for Creators, DistroKid, and TuneCore, or rely on label support for distribution. These intermediaries collect and pay the royalties allotted to performers and producers, each with distinct business models - from subscription fees to per-recording charges or earnings cuts - shaping the digital distribution landscape.