Cultural Enterprise Office

If you own the rights to your music, you have the potential to make money from them. Music rights (copyrights) exist in lyrics, musical compositions and sound recordings. If you create music with others then copyrights may be shared. If you enter into deals to record or distribute your music you may be selling or assigning your copyrights, or licensing access to them. So recognising the copyrights you own, or have the right to exploit, can help you secure an income from your music.

What is copyright?

Copyright is a legal right which recognises the ownership of creative works. It grants the creator of original work exclusive rights to use and distribute the work and profit from it. In the UK, copyright in an original musical work exists as soon as it is recorded or written down in some format. You do not need to do anything else to own the work, but you may need to prove that the work was created on a particular date if a dispute over ownership arises.

Currently, no official form of registration is available so other ways of proving the date of origin and ownership are to:

• send a copy of the work to yourself by registered delivery and leave the envelope unopened with your signature across the seal.
• deposit a copy with a solicitor or bank manager and obtain a receipt.
• use the Musicians’ Union (MU) Works Registration Service, available to its members.

What copyright exists in music and recordings?

There are essentially two types of copyright to consider when we talk about music copyright, often referred to as Publishing Rights and Master Rights.

• The first type of copyright applies to the composition (or musical work) which is comprised of the music (playing strictly by the rules: top line melody) and lyrics. In the absence of an agreement or deal with a publisher, the owner(s) of the composition also own the song's Publishing Rights signified by the traditional © symbol. This copyright in the composition (or musical work) lasts for 70 years after the death of the composer or author, e.g. The Beatles’ songs will enter the public domain 70 years after Paul McCartney dies. 

• The second type of copyright applies to the sound recording itself. The Master Rights in the sound recording belong to the party that financed the recording. Often this is the record label if they don’t lie with the artist. This is signified by the ℗ symbol. This copyright in sound recordings lasts 70 years after the date of the original recording, e.g. the copyright in The Beatles’ early recordings is due to expire at the end of 2033.

How do I earn money from my copyrights?

Copyrights can be monetised in various ways – through playing a live show in a pub or concert venue, getting radio plays on a national radio station, or licencing original music into a film or advert. All these activities have various royalties and/or fees attached to them via the copyright that exist in the songs and recordings.

For example, copyright owners can:

• directly exploit their automatic rights – e.g. by making copies of a sound recording onto a CD and selling them.
• allow others to exploit the automatic rights for a fee – e.g. by allowing iTunes to let consumers download copies of sound recordings to their PCs and smartphones.
• generate income from licensed radio broadcasts via collection societies such as the PRS.
• generate income by performing in licensed spaces such as pubs, clubs or concert venues and receiving royalties.
• allow a brand or production company to use a song to soundtrack a TV advert, game or film through a licensing or 'synchronisation' deal.

Music rights holders can choose to licence their content directly or through the collective licensing system.

Watch the video "Making Money from Music" below produced by Off The Record, a series of events for young musicians and those who want to work in the industry hosted by Born To Be Wide:

How do royalties and collection societies work?

Royalties are payments that rights holders receive from others using their copyright. So if you have created musical works, own various copyrights and have performed or had broadcast or licensed original music you could receive royalties. They are collected and paid on varying criteria including: how many times a song is played or streamed, the broadcaster's audience size and reach, and the territory or country of broadcast and its particular royalty rates.

There are specific agencies, known as collection societies, involved in the licensing and collection of revenue related to mechanical and performing rights. Songwriters, performers, music publishers and record labels register with one or more of these societies in order to collect royalty payments for the use (i.e. performance or mechanical copying) of music they own. PRS for Music consists of two collection societies – PRS and MCPS. 

• Performing Right Society (PRS) acts on behalf of songwriters and music publishers to collect royalties for the public performance of their work. A PRS licence is needed by all television and radio broadcasters as well as concert venues, clubs, pubs, hotels and shops. 
• Mechanical Copyright Protection Society (MCPS) acts as an agent on behalf of songwriters and music publishers to collect money for use of their works on a variety of recorded formats. These include CDs, DVDs, downloads, mobile phone ringtones, and television and radio programmes.

Phonographic Performance Ltd (PPL) acts on behalf of performers and record labels to collect royalties for the public performance of their recordings. A PPL licence is needed by all television and radio broadcasters as well as clubs, pubs, hotels and shops.

Income for music collection societies includes:

• PRS – Public performance, TV, radio, live music, streaming
• MCPS – CD, DVDs, downloads, TV, radio, CD covermounts
• PPL – Performance royalties for registered performers in recorded music
• Overseas royalties from sub-publishers, societies, synchronisations
  
  

Can I get royalties from playing live?

In addition to fees and merchandise sales associated with live performances, any musician or band that is performing their own songs at gigs in small venues such as pubs, clubs, bars, community centres and hotels should join PRS. They can submit a set list online to PRS and they'll receive roughly £6 in royalties for each gig they play (if they are the only artists on the bill claiming royalties). More information is available here.

For larger scale tours or support tours with bigger artists, bands should always complete a PRS Live Event Set List which should be provided by the venue manager or promoter. Alternatively, PRS members can report live concerts via the "Concert Venues and Festivals" link in the member's area.

What does a synchronisation deal or licence involve?

Synchronisation licences for original music usually include matching fees for Publishing Rights and Master Rights. For example, if used in a film, the value of a sync licence might be $2,500 per side. A total of $5,000 will then be paid to the relevant Publishing and Masters copyright owners or controllers, which may be any combination of songwriter, publisher, record label, or relevant administrator. The sum will depend on:

• the budget for the film and its music. Is it a Hollywood blockbuster or an independent art house flick?
• the profile of your track. Well-known, A-list tracks cost a lot despite the proposed use or budget because they have a certain value which the rights holder wishes to maintain.
• how much the producers want your track (this, you may never know!)

If you wish to licence your music through synchronisation deals ensure:

• you get legal advice for any contract deal.
• you understand the difference between a “World-wide (WW) clearance” and future “Options”.
• you sign the correct PRS for Music membership agreement to maintain the management of your rights.
• decide on the relevant US-based collection society (BMI, ASCAP) to associate your music with via your UK counterpart (PRS).

In addition to a fee from a production company, music used in film, TV and other broadcasting can also generate broadcast royalties which can be collected via collection societies like the PRS.

And finally...

The songwriter is not always the copyright owner:

• It is common for songwriters to sign agreements with music publishers who become the owners of the Publishing Rights. 
• Likewise, it is common for songwriters to sign agreements with record labels who finance the recordings and therefore own the Master Rights.   
• PRS for Music membership agreements assign rights to the collection society. 

Further information

• Tunecore – Basics you should know about music publishing and copyright: cover songs
• PRS – Copyright FAQ
• Copyright User – Musicians talk about copyright
• CMU:DIY – Tips: How you make money from music
• M Magazine – How to calculate your songwriting splits  
• How royalties are distributed to BBC radio stations
• Streaming De-mystified PDF – PRS for Music/Music Publishers Association presentation
• How do I distribute my music online?
• Song by Toad's rough guide to releasing an album
• Born to be Wide's Youtube Channel

This guide contains content originally developed by Paul Harkins, Edinburgh Napier University and the Interreg ICV Creative Growth Project.

Disclaimer: We want to keep you in the know, so we offer a wide selection of useful resources. But Cultural Enterprise Office isn’t responsible for the advice and information of external organisations in this document. So if you have any questions, please contact the specific organisation directly.