#MusicBusinessMonday: The Basics

10/10: Music Business Basics

This week’s topic is going to be a little more technical than last week’s; think of it as music business 101. Here are ten basic facts of how the music industry runs and operates:

  1. When it comes to recorded music a song is comprised of two things: the sound recording and the song itself.

  2. Sound recordings (master recordings) are typically owned by the record label, and the label owns the rights to them for 50 years. Songs are typically owned by the publishing company (unless you’re Dolly Parton who owns all of her publishing!).

  3. Copyright ownership of a song lasts for life + 70 years. This means if anyone wishes to use your music they must get permission first, and after the copyright owner has passed on, their estate still owns the copyright for another 70 years.

  4. After the span of life + 70 has passed, those songs enter the public domain. This means you no longer need a license to utilize the song.

  5. There are three different licenses to utilize a song: mechanical license, synchronization license and compulsory license

  6. The royalty rate for a song under five minutes is 9.1¢, and the royalty rate for a song over five minutes is 1.75¢

  7. When songs are played on the radio recording artists/record labels do not earn royalties for the sound recording being played, however, songwriters/publishers still receive royalties for the publishing

  8. There are three major music corporations that own the majority of music released each year: Universal Music Group, Warner Music Group, and Sony Music Entertainment

  9. There are three performing rights organizations in the United States: ASCAP, BMI and SESAC. These organizations collect and distribute royalties for songwriters and publishers when their music is performed publicly (malls, restaurants, etc.)

  10. The Harry Fox Agency is the primary collector and distributor of mechanical license fees to music publishers

It’s important to note that all of these things are just covering the surface and that there are entire courses dedicated to each topic! The music business can get complicated at times, but I love learning the “behind the scenes” information of the music I listen to every day. Now go show all of your friends just how smart you are when it comes to the music business!

Have any questions? Want me to cover a specific topic? Email me at musicbizmondays@gmail.com