Split Personalities: The 4 Hats Every Independent Artist Must Wear

By Elena Lanza, Label & Artist Relations Manager at Vydia. 

Congratulations! You wrote a song. You performed that song. And now you want to release it into the world. Thankfully, the modern music industry makes that possible without needing to be “signed” to a label and/or publisher.

“Owning your sh*t,” as I like to call it, can be incredibly empowering, though often overwhelming. I see far too often, artists not knowing that they’re missing out on one piece of the pie and in turn, losing out on potential royalties.

I could write pages of how-to’s and best practices, but for the sake of this post, I want to focus on income streams, specifically by breaking down the two copyrights that every song contains and the four distinct royalty streams they generate.

Let’s start at the beginning…

You wrote a song. That makes you a songwriter/ composer. You’ve created a musical work, otherwise known as a Composition. This includes the lyrics, melody, harmony – all the things you’d find on sheet music. These elements make a song a song, and make you the owner of the composition copyright. This is often referred to as the “C Line” in credits on DSPs (or in old-school liner notes- IYKYK).

Now, when you take that composition into the studio, or fire up your Logic Rig at home and record it into a fixed format, a second copyright is born: the Sound Recording Copyright, also known as the Master or the “P Line.”

It’s important to note that there can be multiple sound recordings of the same composition.

Sounds simple, right? But now things get interesting. These two copyrights (composition and sound recording) each generate multiple income streams, which are split further between key stakeholders.

Fun Fact I’ve literally used two half-filled glasses of water (and once wine), for clients to illustrate this – Cheers!

The Composition Side:

The composition generates three main royalty types:

1. Performance Royalties
   Collected by your Performing Rights Organization/PRO (in the U.S., that’s ASCAP, BMI, SESAC, GMR or AllTrack). These cover radio play, live performances, in-store plays, etc. 
2. Mechanical Royalties
   Paid for every copy of your song that’s reproduced, whether digitally or physically. There are country-wide mechanical rights collection agencies that collect these on behalf of publishers. In the US, the big one is the newly (2018) established Mechanical License Collective (MLC) for collecting mechanical royalties from digital service providers (DSPs) as well as Harry Fox (HFA) and Music Reports (MRI) for non-digital streaming uses. 
3. Synchronization (Sync) Income
   Earned when your composition is synced to visual media—film, TV, ads, etc. This is collected by the publisher on behalf of the songwriter after negotiating with the licensing party.

These royalties are typically split between two parties:

• You, the Songwriter
  
• The Publisher

Now here’s where it gets confusing for many indie artists…

Publishers are to songwriters what labels are to artists. Their job is to “leverage the copyright” meaning, they license your composition to labels, sync agents, other artists and producers to record, etc. But just like many artists today are going the DIY route and releasing music without a label, many songwriters are now self-published. That means you’re also your own publisher.

The Sound Recording Side:

The Sound Recording Copyright (aka the “Master”) generates its own revenue, such as:

1. Sales and Streams
   (Digital and physical) Collected by your distributor 
2. Master Use Licenses
   (Sync income / the actual recording used in film/TV/etc.) Typically paid directly to the owner of the recording rights 
3. Neighboring Rights
   (Performance rights on the master) Fun fact: these are called “neighboring” rights because they’re related to—the composition performance royalty. Shoutout to the Vydia Rights Management team for that one!
   
   Every country has their own collection agency; in the US, this is collected by SoundExchange

This income is usually split between:

• The Master Rights Holder (often a label)
  
• The Artist

Of course, this can get more complex when you factor in producer points, session musician fees, and more—but to keep it simple, those are the two major entities involved.

Here’s the thing, If you own “both sides” (the composition and the master) of a song, you have access to all of these income streams, as well as CREATIVE CONTROL of your art; which any artist will tell you, is a very big deal.

Take Taylor Swift for example, after years of fighting for control and ownership, she recently just bought her original masters and now owns all aspects of her music. This means she will generate royalties from both the compositions as well as the masters.

It IS possible to own it all, but it also means that you are now four people in one (Songwriter, Publisher, Artist and Label) and you need to start thinking as such and managing all four hats. These days there are a lot of services available to help with the administration and collection of your royalties, be it distribution, publishing, neighboring rights, etc. But these services can only be as useful as your understanding of them.

Knowledge and independence are equally powerful in the modern music industry. The better you know your business, the more you can capitalize on it. 

Interested in joining Vydia’s platform? Request an invite today.