Before we had a massive movement of independent musicians and label services, there was the old way of doing. The way of artists signing their master rights to a record label in turn for their investment.
This is not how we should look at things anymore. Owning the master rights of your song is one of the single most important things in your business. This give you creative power to earn from your song and more.
Something to take note of before we continue is to understand that every song (recording) has two copyrights. 1, the composition aka the song and 2, the sound recording aka the master.
To break it down a tiny bit more, the composition includes all the contributors to the song or lyrics and 2, the sound recording would be the artist and/or producer.
Let’s touch on the investment side of this debate.
When someone gives you money or puts a time investment into your song, they will legally have a right to a piece of the particular sound recording, recorded by said studio, if you agreed on this prior. There is also the option to pay your collaborator for the time (hire time) and you do not need to worry about anything else. As a musician this isn’t always viable.
Often creatives collaborate and many artists feel they would like to exchange value by putting a percentage on the table. This is very generous and can sometimes be to your advantage as it opens all parties to really push the single. But this also means you would need permission from all the parties to sell the song to a third party, publishing or any other deals. By retaining your master rights, you have the freedom to do with the song as you see fit.
What to consider when looking at the master rights.
Ask yourself, what value do the other parties bring to the production or marketing of the song? Why do they want to own a part of the master? Will they share in the production costs? This is a consideration you need to spend time on. Being selfish with your master rights is not wrong. It is advised. And remember, this does not mean that you will not agree on a fair deal between you and collaborators. You can sign a deal where all parties involved receive a fair share of the revenue that the song makes from publishing and royalties. This will include all version of this particular composition and its remixes.
How to make sure you own your masters?
You need to chat about this rights at the beginning. You can keep matters simple by having a one-pager ready that outlines the roles of everyone from the performers to the recording studio, with their assigned splits. These splits will be paid to the collaborators after all expenses have been covered. This is a point you need to be clear about on the split sheet as you are taking the risk in producing the song.
What should you look out for in a record label contract?
Once you sign a contract, you become the product. The music business is as cut-throat as any other industry. Thus, if you sign something you will be seen as the pay check. So make sure you know how to protect yourself or understand what some of the terms in a contract are that you should look out for.
How would you know?
Be careful for long rights periods. Every contract will differ here, but it is easy enough to check this on the web. Look out for options of future recordings. This means that the record company can automatically own future recordings in a return for a paying advance. And lastly, the ‘exclusive recording agreement’. If you agree to this clause, the label will own every single song that you create during your term with them.
A basic understanding of the world of composition vs sound recording can get you a long way. And the one-pager. Things can get ugly when money rolls in, so sort these matters out at the start of any project. Keep your split agreements simple, no need to complicate things and force your collaborators to get a lawyer of their own.