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Master rights are one of the two main types of rights linked to a track. It might not be the most exciting topic related to the music industry, but becoming a rights expert will make sure that you’re not missing out on any important revenue stream you should be receiving.
This article will cover the following topics:
Master rights are one of the two main types of rights behind any piece of recorded music. The other type of rights being the copyright. If copyright covers the rights of authors, composers, songwriters and publishers, master rights are linked to two different families of creators:
This means that whenever you perform or produce a record, you’re entitled to receive so-called master royalties.
In Europe, and sometimes in North America, you might find them included in the concept of ‘neighbouring rights’. The term might sound weird, but it means that these are the rights that ‘neighbour’ copyrights.
If you are an independent or a DIY artist, you should always remember that you’re not just an artist; you have multiple roles. You are a songwriter, a performer (potentially) and a producer at the same time. This means that you need to make sure you collect both copyright (as a songwriter) and master royalties (as a performer and producer of your song) to receive all the money you deserve.
The collection of master rights depends on your situation, and it’s mostly linked to one question: have you signed a contract with a label or not?
Let’s explore both scenarios.
Master rights are collected through two different channels:
The collection of master royalties on the Internet mostly involves streaming services.
When you’re not signed on a label, you’ll be signing up with a digital distributor to make your music available. We mean companies such as DistroKid, TuneCore, Amuse or CD Baby. For a fee and/or a commission, these companies will take your music and make it available on the major music services. They’ll then pay out royalties to you, in accordance with the plays your recorded music will have generated on the streaming platforms.
And guess what? These royalties are your master royalties.
Digital distributors collect the royalties you’re owed as a producer and a performer from the streaming services.
Very often, if you’re a DIY creator, you will also have composed the music and written the lyrics. The remuneration of your activity as a songwriter isn’t covered by your digital distributor. You’ll need to sign up with an organisation such as Bridger, which can collect your copyright royalties for you. Never forget to consider yourself as a songwriter too, otherwise you’ll end up missing out on some of the royalties you’re owed.
By terrestrial, we mean everything that’s not coming from the Internet. We can also call it the physical world. The scope is large, and it encompasses media such as TV and the radio, but also public venues, for instance.
If you’re lucky enough to have your recorded music broadcasted on such terrestrial channels, you’ll need to register with a Collective Management Organization specializing in neighboring rights, such as PPL in the UK, ADAMI in France or AIE in Spain.
Note that this is true for artists based in Europe. If you’re from North America, you may want to check out the last section of this article to understand how it works in the United States.
Digital distributors such as DistroKid or TuneCore take care of collecting your master royalties on streaming services. When it comes to the master royalties generated by terrestrial plays (TV, radio, public venues, etc.), you’ll have to sign up with a dedicated Collective Management Organization, such as PPL (UK) or Spedidam (France).
The situation is different if you’re signed up with a label.
The label will usually take care of making your music available on the streaming services, and will thus share part of your master royalties with you.
For terrestrial plays, your label will generally have signed up with a Collective Management Organisation specialized in neighbouring rights related to the production of recorded music to mandate it to collect the master royalties from your tracks. According to the contract you agreed with your label, it will then share the revenues with you. Regarding your neighbouring rights as a performer, you will need to join a Collective Management Organisation specialized in neighbouring rights related to the performing of recorded music (like Adami, PPL, Playright) in order to collect them.
Yes, unfortunately, there is a significant difference between North America and Europe, which makes the whole thing quite complicated to grasp when you’re starting out in this industry.
As we’ve seen, it’s quite easy in Europe: part of your master royalties are coming from your digital distributor (digital royalties), while your terrestrial royalties are coming from a national, specialized Collective Management Organisation. So far, so good.
You’ll have to understand an important concept to understand how to collect the full spectrum of your rights: interactive streaming versus non-interactive streaming.
Interactive streaming is what’s happening on Spotify for example: a user is browsing the catalogue, and is playing a track by making an active decision. The play button is hit consciously. Non-interactive streaming on the other hand is related to online radios such as Pandora. You open the app, pick up a radio and listen to the content which is being fed to you.
Master royalties arising from interactive streams will come from your digital distributor, while for master royalties arising from non-interactive streams you will need to register with SoundExchange. This is the sole organisation designated by the US congress for the collection of non-interactive master royalties, and the payment of these to featured and non-featured artists, as well as master owners.
Radio stations in the United States do not pay any royalties on the master side. Songwriters and publishers are remunerated for radio plays, as stations pay a blanket licence to Performance Rights Organisations such as BMI or ASCAP. But record owners do not receive any compensation for the broadcasting of their music. This situation is unique to the US.
Another case is related to cable TV music channels (MTV for example). In this case, neighbouring rights are paid to a Neighbouring Right Collection Society. Nothing too complicated here.
If your music is synchronized with video content on TV (feature film, advertising, TV Show, etc) then you don’t receive master royalties per se. The video-maker willing to use your track will have to clear the rights on both the copyright and master sides. This usually means making a deal with the publisher on the one hand, and the label on the other.
Europe and North America have different systems. Things may work in roughly the same way for digital master royalties, but terrestrial royalties are entirely different.
Master rights are one of the two main types of rights behind any piece of recorded music. They are the rights of the performers and producers. When you are a DIY artist, it’s your digital distributor that collects the royalties you’re owed as a producer and/or performer from the streaming services. On terrestrial channels, you’ll have to sign up with a dedicated CMO. When you have a label, it’s the same except that the label takes its share before paying you what you earned from the digital distributor and CMO.
