“A musical work means any work of music or musical composition, with or without words, and includes any compilation thereof. When your musical work is played in public (tv, radio, digital, streaming, background music, live, etc.) whether by you or someone else, you have earned performance royalties.” (Copyright Act R.S.C., 1985, c. C-42)
The goal of this article is to first provide a brief historical background on the infrastructure built around the administration of performing rights and on how PROs collect and distribute public performance royalties and mechanical royalties of a Work.
Writers’ and Publishers’ shares
When talking about Writers’ and Publishers’ shares, we refer to how Copyright is recognized through the ownership of a Work, the musical composition in other words the written part of a song (the partition).
In music publishing, shares are traditionally divided 50/50 between the writer and the publisher. For example, when a Work is publicly performed, played on the radio, or streamed on a digital service provider (DSP) rights holders are entitled to performance and mechanical royalties.
Performing rights are administered by Performance Rights Organizations (PROs) and mechanical rights by Mechanical Rights Organisations (MROs) and Mechanical Licensing Collectives (MLCs) and reproduction rights* by Reproduction Rights Organizations (RROs). All organizations other than PROs fall under the wider term Collective Management Organization (CMO). In some instances, an organization might administer more than one right. It depends on the country and the Copyright Act of that said country. PROs and CMOs have the responsibility of licensing, tracking, and paying out royalties to songwriters and music publishers.
The Evolution of Music Publishing
While the digital age revolution has reshaped the music industry, the invention of the paper machine and the rotary printing press was as disruptive as the arrival of the MP3. When invented in the 1880s, music partitions could finally be mechanically reproduced.
Traditionally, Music Publishing and Publishing Administration were solely managed by Publishers. Why? Because owning a paper machine and a rotary printing press wasn’t accessible to anyone else other than the decision-making people (Kings & Governments) and the Press.
The 1500s - Ottaviano Petrucci (Publisher)
1709 - Copyright Act
1777 - SACD (PRO)
1877 - Phonograph & Microphone
1893 - Gramophone
Publishers not only reproduced and published Works, but they were also the ones handling the trade and the import/export of the partitions. The concept of commercialization or distribution of music existed way before a sound could be fixed on a support. The point is that disruptions and technological evolution have been part of the music industry since its inception. That being said, unless we go back in time and study the history of our industry, it is difficult to grasp the subtleties that are still shaping it today.
Songwriter and Publisher Relationship
Songwriters used to depend on Publishers to get their Works commercialized as they were the ones with the technology and infrastructure in place. As the demand for printing material increased and access to the printing machines opened up, songwriters could start their own publishing companies and manage in-house the administration of their publishing.
Similar to the first songwriters entering the music publishing business, today’s independent and emerging artists are seeing an opportunity to maximize their revenues and increase their value by utilizing digital publishing services. That being said, even if technologies and digital services have evolved, the actual way performance royalties are paid out remains unchanged. The standard split is 50/50 unless specified otherwise to the PROs and MROs/RROs.
PRO’s Work Registration Requirements
If there is no Publisher Split when filling out a Work’s registration with SOCAN, SOCAN determines that the Songwriter is the sole copyrights holder on the Work and distributes 100% performance royalties to the Songwriter. Not all PROs have the same distribution guidelines.
With ASCAP for example an independent songwriter will have to “set up a publishing company with ASCAP” to collect the publisher’s share. With BMI, the royalties are equal to 200% (100% Writer’s share and 100% Publisher’s share). “If you do not have a publisher, you will also receive the publisher’s share as a writer” similar to how SOCAN operates.
In conclusion, some PROs have adopted a more flexible approach to royalty distribution taking into consideration that more and more songwriters are working independently from Publishers. Still, the infrastructure remains based on traditional roles and a basic understanding of music publishing history is helpful to comprehend the complexity of the industry.
💡 In the music industry, we sometimes use the terms performance royalty and performing right interchangeably. They both reference the public execution of a Work. The former refers to the money generated by the execution of the performance of a Work in public and the latter refers to a right being administered by a PRO.
💡 *The term mechanical refers to the process used to fixate the reproduction of the sound recording to a support. A perfect example of mechanical reproduction is when a Work is pressed onto a blank Vinyl. Nowadays we tend to use the term reproduction rights or mechanical reproduction rights instead of mechanical rights because of the digitalization of the music industry. The reproduction process has evolved and the mechanical aspect of reproduction is perceived differently when reproduced digitally.
💡 Evolution of Technologies