A very common question that comes up for us is the subject of copyright and copyright splits. This actually falls under the umbrella of master and publishing rights. What are they? How are royalties even earned from them and what are the possible percentage splits between the songwriter, producer, recording artist and label?
Copyright ownership and royalties can sometimes be difficult to understand, especially because music is an art form. What can make it challenging, is the number of people who can be involved in making a song, and the different roles they play
So, let’s start from the top.
Let’s say, for example, someone makes a new track or takes something that has already been done and makes a new version (like a remix for instance). Even if the track is on paper and it isn’t finished, it’s considered to be a new idea or in fancier terms, new creative content. This new idea actually belongs to someone, so in legal terms, it has to be protected (this works just the same way that someone owns a physical thing, like a TV). Another word for this type of legal ownership is “intellectual property”.
What a lot of people don’t realise is that in the music industry we refer to various types of ownership of any piece of music because of all the people who could be involved. We generally like to separate these into two. One is the creative side of things, and the other is the business side of things. They are respectively called Songwriter and Master copyright
Songwriter/Publishing Copyright (also referred to as publishing)
This is the creative side of the ownership of a song. It means the lyrics, the melody, the composition, the production, or anything that makes that song what it is from a creative point of view.
This is the business side of the ownership of a song. It basically refers to the people who paid for the song. It could be someone investing in a songwriter, a record label that has signed an artist, or an independent artist paying their own way.
Master vs publishing copyright
Income that gets generated from a song, gets allocated to the two different forms of ownership, copyright or master ownership (there are other forms of royalties but we will be sticking to copyright and master ownership in this article)
So how this income is generated is actually quite simple. Every country has a type of collection agency called a Performing Rights Organisation, that radio stations pay to every year. In South Africa, that agency is called SAMRO. This falls under publishing/copyright royalties, and this is where songwriters will make royalties.
If you are the master owner, it means that you are eligible to earn any money that is allocated to master owners. Examples of this are CD sales, streams and merchandise. Another example might be if your song gets used in a film or TV ad, the payout agreement will specify an amount allocated to the master owner, while another portion will be allocated to the copyright owners.
Some Examples of How This all Works
Let’s say our studio composer Ross Rowley composes a song for a client, a singer called Jonno Smith.
In the first example, Ross comes up with the lyrics, melodies and composition, while the singer, Jonno, performs the song in the studio, pays for it, and leaves with the finished song.
If we look at our previous examples, Ross will be the owner of the publishing/songwriter copyright, while Jonno will own the master.
So, if the song gets played on the radio, Jonno wouldn’t get royalties from the radio play. This is because Jonno doesn’t own those songwriter copyrights as he didn’t give any creative input into the song, even if he sang on the song. He is simply the performer/recording artist and owns the Master of the song. Ross will get his songwriter royalties from SAMRO and Jonno will be able to collect other royalties (such as mechanical royalties) when the song is sold on CD, and for this, Ross won’t get any royalties because he doesn’t own the master.
A month later Jonno comes in with a song he has already written, but he needs help with some of his melodies, so Ross sits down with him and they make the song together. The both end up adding creative elements to the song. Jonno then pays for that song too.
In this example, Ross and Jonno will see how much Ross creatively contributed to the finished song and he will only get a percentage which he will fairly agree on with Jonno. Because this is the creative side, they now share the songwriter/publishing copyright. Jonno still owns 100% of the master as the song still belongs to him and he paid for it.
This means Jonno will get all of the master royalties, as well as his percentage of the publishing royalties.
The last example is one where Jonno comes into the studio, with everything written down or recorded on his phone. Ross simply puts or records the instruments in, and also records Jonno’s vocals. Ross has not creatively contributed to the song in anyway, he has just facilitated the production and transferred Jonno’s creative ideas into a song
In this case, Jonno completely owns both the master and publishing copyright 100%, and Ross will not get any type of royalties for the song because nothing he created on it was new.
Now, let’s say Jonno gets booked to perform the first song at a show, Rocking the Roses.
Rocking the Roses pays Jonno to perform the song. Jonno takes that money home because he owns the master.
Rocking the Roses also pays SAMRO for a license that gives them the right to have music played at a festival. Ross would then get his royalties from SAMRO for the publishing/songwriter copyright.
Let’s say that the second song becomes super famous, and someone hears it, like Taylor Swift. Taylor likes the song so much that she pays her own team to come up with a new version of that song. When it is finished, Taylor (and her label) now own the master of the NEW version of the song, but Ross and Jonno still own the publishing/songwriter copyright because they composed the original song.
If Taylor now performs at Rocking the Roses, she will get a set pefromance fee for the master copyright of the NEW song. Ross and Jonno will receive the same songwriter royalties from SAMRO, divided in the same percentage as they originally agreed on.