6 Building Blocks Of The Industry

“What the flip actually is a publisher? What the heck is a record label?”

It’s pretty surprising how often I’ve found these two questions crop up – even from experienced songwriters and artists who’ve had dealings with both entities and been left non-plussed. Bear with me and prepare for a sore brain.

The music industry is all about copyright control and how to earn money from exploiting copyrights – putting them to work, selling them, licensing them. It’s all pretty confusing – mainly because the industry has reacted to new technologies, precedents set by legal wrangling and large swings in music consumption (both in quantity and medium) over nearly a century.

It’s a bit like Heathrow airport – started in the 1920s as a tiny airstrip it has grown, been bolted on to, evolved, developed and reacted to service an ever expanding air industry. Today it’s frustratingly complex to make connections between terminals and generally navigate around the airport because it was never thought out or designed to manage a large flow of passengers. It doesn’t really make sense in the context of where the industry has grown to be. Hong Kong airport by comparison was specifically designed as a large hub airport – built in the late 90s to handle over 50 million passengers a year. It’s super easy and straightforward to navigate between gates and concourses – so much so in fact that Heathrow Terminal 5 was based on it’s design.

The music biz is a constantly evolving and ever-changing animal – it’s now a pretty complex set of relationships between two types of companies and two kinds of creative people over two main copyrights and their embodied rights. Six legal entities. Phew.

These six elements are what form the music industry – songwriters, compositions, publishers, artists, recordings and record labels. It’s important to remember these are all distinct, separate elements.

SONGS & PUBLISHING

Songwriters write compositions and own the copyright for these. A songwriter can choose to sign an agreement with a music publisher who puts the song to work earning dosh for the songwriter (and themselves). Any time the song is ‘used’ it generates a revenue – the publisher’s remit is to ensure this revenue is collected correctly and, on the flip side, to ensure the copyright isn’t used illegally without generating a revenue. The publisher wants to increase the number of uses, and hence revenue, of the copyright/song.

With me so far…?

RECORDINGS & RECORD LABELS

At some point a record label wants to make a recording (also known as ‘master’, short for master recording) of the song. The label (typically) pays for it and they then own the copyright for the recording (i.e. they own the recording). The record label makes an agreement with an artist to feature on the recording – for a straight fee or percentage of the revenue the recording earns (or a mixture). Anytime the recording is used (or sold) the record label collects the revenue for use of the copyright.

So the copyright for any master recording and the copyright for the song are totally different, totally separate. They’re also owned by two different, separate entities: record label and publisher. Owning a ‘song’ or ‘recording’ just means owning the copyright, it’s the copyrights that are at stake.

Still awake…?!

You can imagine there may be several different unique recordings of the same song; so each recording must have its own individual copyright, which is distinct from the song copyright. When a recording is played or sold it generates money through the song use (for the publisher and composer/songwriter) and the recording use (for the record label and artist). Paul McCartney’s ‘Yesterday’ has had over 2000 covers – all earning Sir Macca a royalty for the use of his song.

Once more: publishers own and exploit song copyrights on behalf of songwriters. Record labels own and exploit master recording copyrights on behalf of artists. The six elements are separate and distinct (though crazily sometimes a publisher can also be a record label and an artist can also be a songwriter…that’s not for today though!).

The most helpful way to think about it all is as six distinct elements, as this is how they are treated legally. It’s a lot to take in, and it gets more complex with some of the organisations that help all six elements interact (PPL, PRS, MCPS etc.), but it’s fundamental to understand that each element is legally separate. There’ll be more in depth blogs on each one and how they relate to one another, but for now you’ve earned a nap.