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How to set up your band to produce records, or…
Not exactly breaking news, but the world of copyright law is complex, and music copyright is no exception, hence why there are lawyers who specialize. I think my attempt to break things down into something succinct proved to be more difficult than explaining relativity. The following comes from many years of learning about music copyrights from all sorts of different sources. And bear in mind that there is really not a whole lot of written laws regarding copyrights, rather much of it is based on common law, common practices, and laws regarding "tenants in common." If you are a young musician starting a band, download this—it may prove invaluable. I want to point out, though, that I am not an entertainment lawyer by any stretch of the imagination, so you must consider the following at you own discretion. The songwriter (the person or persons who wrote the underlying melody or lyrics) initially owns a song (the song's copyright). If a song containing both lyrics and a melody is published before the melody or lyrics are copyrighted separately, they become eternally fused. Along with the musicians who performed the recorded parts, the person who processes the sounds of a recording (the recording engineer) initially owns the recording (the recording's copyright). Physical mediums (original notation, master tapes etc.) can, of course, be owned by anyone, and the owner is under no legal obligation to grant access to the material to any copyright owner. If a recording engineer or a musician waives his rights, the rights have probably gone to a person or company that has paid them for their services. Record companies will often demand all sound recording rights in order to monopolize a recording. This is indicated by a capital P (phonorecord) with a circle around it printed on whatever medium the recording/s is applied to, followed by the company’s name. But contracts can be made up, of course, allowing anyone to retain or transfer publishing or sound recording copyrights, regardless of the situation. Publishing rights/comparison with sound recording rights: Publishing rights for songs can be broken down by percentage. On the other hand, and historically speaking, there has never been any system in place for dispersing royalties for sound recordings based on any hypothetical percentage of ownership, but lately, some distributers are offering revenue splitting. Some or all may be based overseas, but that is another issue. Also, in the case of sound recordings, different rights may apply based on a person's roll in the creation of a recording. Historically, performance royalties (revenues from radio play, bars, sheet music, etc.) have gone exclusively to the owners of the publishing rights, which typically include the songwriter/s and a publishing house in a 50/50 arrangement. Other income sources for the writer/publisher are licensing (mechanical license) fees from those wishing to record a new version of the song, make physical copies of the resulting recording, upload the recording to an Internet vendor for download, or synchronize the song with video. Revenues from physical sales (mechanical royalties) go to the owner/s of the recordings, typically a record company, which then distributes an artist royalty to the musicians who played on the recording, excepting perhaps any session players who were paid a lump sum for their services (and waived their rights) or performed their parts as employees of the company (work for hire). Internet downloads are considered physical sales, although a while back, songwriters were granted a small percentage of sales. As far as collaborations are concerned between songwriters and musicians, there are many situations in which one or more musicians may contribute much to a recording without having contributed anything to the underlying melody of a song. Say there was one person in the band who wrote the lyrics and melody of a song and kept the publishing rights. The song becomes a hit, owing much to the talent, dedication, and creative thinking of the other members of the band. While each member may receive a good payout from the record company in the form of an artist royalty, the subsequent performance royalties earned by the songwriter may stand to make the songwriter quite wealthy. Again and again, this has led to problems. After all, if it wasn’t for the first recorded version created by the band, the song might never have become so popular. So while it may be impractical for large bands or orchestras, it might be wise to divide the publishing rights between everyone in your tight-knit group to ensure harmony and fairness. If an equal division seems drastic, you can always devise some sort of formula. Some might think it overly generous, but I personally like the formula 10% more of the total copyrights for the main writer/s of a particular song for a 4-person collaboration, 15% for 3-person, and 20% for two. These formulas roughly work out to the lyric/melody writers retaining half-again as much of the publishing rights as the other members of the band (50% more). Of course others, such as the late Jim Morrison, for example, would have thought it too stingy for his band. While granting someone part of the publishing rights (writership) does give them the abilty to grant non-exclusive mechanical licenses for the song/s, or record new versions themselves; aside from the lost income, there is not much of a downside for the main songwriter, really, in sharing the publishing rights, as after a song is recorded and the recording is published, all future licensing of a song is compulsory (meaning a mechanical license to record a new version must be granted to any who request it), anyway. And even if the license was granted without the involvement of the other authors, that person is liable to ensure that any and all proceeds are dispersed to the other authors according to their percentage of ownership. Sound recording rights: Sometimes, a band will opt to produce some recordings itself. Now, you may have read somewhere on the Internet that a musician who has performed a recorded part, and therfore owns the sound recording copyright to that part, automatically owns a stake in any future mix or physical record the recording is included on (if they were not paid as an employee and/or did not wave their rights), but I have heard of rulings otherwise here in the good ol’ USA. In other words, producers (defined by the US copyright office as the person who "fixes the sounds") are sometimes treated like labels in US courts, even when there was no paperwork involved. Therefore, it might be best to assume that only those band members who produced or invested in the project will be legally entitled to any revenue from the sales of any published recordings. For any musicians left out, this might lead to frustration or dampened enthusiasm when they find out that they have no strong legal right to collect royalties. And if at some point the band dissolves or the others fail to promote the recordings, a band member may find his/herself with a bunch of recordings that he/she has no strong legal right to do anything with - if the other owners wish to thwart them (i.e., more legal weight might be given to the producers of the recordings). So, while technically unnecessary, anyone in such a situation might want to make sure they are guaranteed, in writing, a portion of the sound recording rights to any future mixes containing their part. A lot more necessary is a guarantee they can publish or license (master-use license) the recordings without interference from the other owners of the recordings as long as they promise not to engage in business practices considered less favorable than common practice. And most importantly, a guarantee to an equal portion of any proceeds the mixes (or phonorecords containing those mixes) may generate. Such a collaboration agreement signed by all parties would indisputably make it theft for any one owner to pocket proceeds that should have been dispersed to other owners. But take note, if you do not own even a small percentage of the publishing rights, you still cannot legally print or upload new copies of the recordings without license from at least one owner of the publishing rights. However, if the songwriter will not cooperate, you can always apply to the US copyright office for a compulsory license to print X number of physical copies or sell X number of digital downloads. With the clause added to your collaboration agreement about non-inference from the other owners of the sounds recording, you should, then, be legally set. Beware though, to produce facsimile physical copies of a published phonrecord, you will also need a license for the artwork. Side note: The reason a non-interference clause is important is because I have found that most publishers, printers, or online vendors prefer permission from all owners of a song or recording, and--certainly in the case of sound recordings, anyway--will honor takedown requests from other owners. Distribution: If the band wants to start distributing its recordings itself without a label in place, be forewarned: some Internet vendors, such as iTunes, only deal with labels which are capable of imbedding meta-data in digital files and assigning ISRC numbers etc. And no aggregators or US distributors that I know of will divide up royalty payments for sound recordings. On top of that, they demand that their customers sign a statement declaring that the customer owns all of the rights to a recording. This looks to me like it might lead to a dicey situation, taxwise and otherwise, if a bunch of recordings do indeed have more than one owner and they become popular. So the best option might be for the band to form its own label. And the best set-up might be to allow the label to serve as the "administrator only" of the recordings, in which case, none of the bandmembers would need to transfer their rights to anyone, merely give the label "license" to manage the recordings. There are two directions to go after that, I suppose: learning new skill sets and distributing your tracks yourself, or signing up with a distributor. CD Baby is a distributor best known for working with independent artists, but also allows labels to use its services. Another option is to go with one of these overseas distributors, such as Routenote, who will divide revenues for sound recordings. Side note: One outfit that will divide royalties for both recordings and songs is Sound Exchange, which only collects from non-interactive streaming vendors (Internet radio, etc.). And while CD Baby may not divide mechanical royalties, they do have a service for monetizing songs which sends the proceeds to the performance society of the writer or writers, where those proceeds are dispersed to those songwriters based on percentage of ownership. So, songwriters, don't underestimate the importance of joining a performance society and listing your songs with it. One last thing to keep in mind: On the other side of the coin of musicians possibly not having a claim to revenues, is the possibility that someone who retains ownership of their recorded part, no matter how insignificant, ends up having an equal stake in any published physical record containing that part (depending on how a judge might interpert the law, or what country you live in, I guess). Ex: Bob now has a 1/6 stake in a CD because he added that brief mouth harp at the end of track 13 (might have been best to pay Bob up front for his part, in this case, and have him sign a waiver). But this much is certain: When the CD is registered, separate SR forms will need to be submitted to make sure there is no chance Bob ends up owning SR copyrights to all of the individual tracks on the CD besides the one that he actually performed on. If there are original songs on the record that have different song writers, separate PA forms will then need to be submitted to register publishing rights. As you can see, the cost of registering can add up fast. Same owners of the recordings = same songwriters for every song: One form SR will do it. So, percentage of sales, payment for your services, partial ownership of the recordings and/or partial ownership of the songs—it comes down to whatever you, as a musician, think is fair based on the situation. Probably needless to say, but I, personally, will never get involved in another recording project unless all those involved sign a collaboration agreement before we even begin. My opinion is, if someone devotes much of their time to a project without getting paid for their services, they deserve to own a stake in the recordings. *I have received conflicting information on this subject: Based on a court case he had lost while representing some musicians attempting to collect royalties, I was once advised by an entertainment attorney that I could “Probably” exclude the other musicians that performed on some recordings that I produced from any SR form that I submitted to the US copyright office. However, I didn’t take the advice, as I was subsequently informed very matter-of-factly by the US copyright office that ownership of a recorded part “Carries forward” to any mixes containing that part (unless those rights were waived). I believe there are two lessons to be learned, here: One is that someone could really "mess you up" if they do not understand musician's rights, and they file an incomplete SR form. And two, ownership of copyrights does not always guarantee royalties if you allow someone to publish your material (in this case, a recorded part) without an agreement in place. Misc: Before presenting your original material to your band mates, it is always a good idea to document it in some way. I used to seal the notation, cassette, CD or whatever in an envelope and have the US post office stamp the seal, but they stopped doing it, for some stupid reason. An alternative, though, is to take it to a notary, sign the sealed envelope and have the notary stamp the seal. The notary should also add the present date, of course. 11/26/22: When I posted this page back in April of 2016, there weren’t any web pages that attempted to break down music copyrights in general into some succinct form, which is why I created it. I did a search the other day and found many pages, some with eerily familiar text, but what can you do? I also came across a few with conflicting information: One assertion is that one songwriter cannot license a co-written song without the other writer's permission; however, more often than not, the assertion is that a songwriter can issue a non-exclusive license, but never an exclusive license (granting someone the sole right to use a song). But I would assume such a privilage would only apply after the song has been published in some capacity. And, of course, this all pertains to the "default" common-law rules, without any collaboration agreement in place between the parties. In regards to exclusive licensing, I believe such licensing can only apply to the song in a certain context (others can still record a version, just not associate it with any movie, TV commercial, product, or whatever the case may be). Another assertion that I have come across is that any musician who records a part, and did not release their rights, has complete control over that part. This is true, but remember, if you—as a musician—voluntarily record a part, which is subsequently published, a judge may frown on you attempting to come back later on and claim infringement or lost royalties. In other words, here in the USA, you need to speak up and state, “No, you may not use my recorded part” or “You may use the part only if I receive X amount of royalties” before the part is published, and best do it in writing. |