Copyright and Royalties in the Music Industry

I have been asked to create this essay in which I have to provide an account for how copyrights and royalties work in the music industry and to show my understanding of the importance of collections societies. I have thoroughly researched these topics and have gained full understanding on each matter.

Copyright

There are many issues surrounding the downloading side of today’s music industry. And one of these issues to mention is illegal downloading. With music now being so easy to access, there are now ways in which it can be downloaded and exploited, this is an example of copyright. The main ways in which music can now be exploited is firstly, by ‘performance’. One can copyright someone else is work by performing it live without the original composer’s consent and calling it their own work. Another example of this would be, music being ‘sampled’. This means that if somebody were to create and officially release a piece of music and someone else was to take a section of this work and put it into their own song without the original composer’s consent, this would also be another example of exploitation of music. ‘Altering’ is another example of exploitation of music. This is when a piece of music is completely changed all together. Altering is where each section of a piece of music is re-arranged so that they are played in a different order to the original piece. Lastly, music can be exploited by being ‘copied’. This is where parts of a song are copied and then placed or recorded on to a different recording and released or distributed under a name that is not of the original owner.

Royalties

Royalties are payments to owners of a certain material for when it is distributed or used. Royalties often take care of intellectual property (IP), such as copyrights, and trademarks. There are six different types of royalties that are involved within the music industry, they are:

1. Streaming royalties - when fees are paid to owners of a song each time it is played on a streaming service, e.g., Spotify, SoundCloud, Apple Music.
2. Neighboring rights and royalties - when fees are paid each time a song is broadcast on the radio or on television.
3. Digital performance royalties - when certain organizations can monitor an online performance.
4. Sync licensing fees - when fees are paid to a songwriter when a song is played with visual images.
5. Public performance royalties - fees which are earned when a piece of music is performed publicly.
6. Mechanical royalties - fees which are paid for when a vinyl or CD is pressed.

Radio airplay is an example of a public performance. These collect performance royalties for both songwriters and musicians. However, broadcasters such as ‘AM’ or ‘FM’ stations only pay songwriters. In many cases, both recording artists and also songwriters are paid royalties every time their work is played. Under what is called the traditional recording agreement, royalties for owners usually range from approximately 10% to 25% of the usual retail price for any release. In simpler terms, songwriters are often more likely to make far more money than singers and artists themselves. However, there is high potential income for both. Songwriters usually get paid for every song plus they receive royalties for life, whereas singers and performers receive royalties only when the song is performed live.

Collection Societies

Now moving on to collection societies. Copyright collection societies act on behalf of certain copyright owners to facilitate the administration of copyright licenses.

There are now ways in which copyright can be tackled and prevented to a degree, the collection societies that do this are firstly Performing Rights Society or PRS. Its objective is to simply collect all royalties for the composer of a piece of music. Similar to PRS, Mechanical Copyright Protection Society or MCPS is another collection society which pays royalties to composers when a song they have composed has been produced. So again, similar to Performing Rights Society, Mechanical Copyright Protection Society also collects royalties. Phonographic Performance Limited or PPL allows radio stations and other broadcasters to legally use an artist or band’s work on the air. It is also responsible for collecting license fees on behalf of an artist or band and their labels and rights owners. My final example of a collection society is called Video Performance Limited, VPL. This particular company works very closely with Phonographic Performance Limited, however they are not the same company. Video Performance Limited distributes license fees to the owners of an official music video. In simpler terms, both Video Performance Limited and Phonographic Performance Limited undertake the same targets, only Video Performance Limited is for music videos only.

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Copyright Infringement

Illegal downloading is a criminal offence if the downloader dispenses the original material. If the offender is caught downloading illegally, there are harsh penalties in place for this crime. Illegal downloading can realistically cause original owners of a certain material to inherit less profit from their work which they are entitled to. This crime however is very common. The reason for this is because people are so used to having quick and easy access to things like music on the internet therefore people tend to believe that downloading something illegally is not a serious crime at all. After nearly two decades of audio piracy and piracy-driven declines, the music industry’s revenue bottomed out at approximately 14 billion dollars in 2014. Since then, due to other factors regarding streaming, revenue has grown to 20 billion dollars in 2019, back in line with the exact same levels as 2004.

An audio recording will have a separate copyright to the underlying work that is featured within the recording. This means that a new recording will still be strongly protected under copyright, even if copyright has expired in the original work. For example, a new recording of a piece of classical music will still be protected under copyright, even if copyright has expired in the original music. The same logic applies to recordings of other pieces of works such as plays and books.

An example of a copyright case in music was between two bands called Radiohead and The Hollies. Radiohead were previously accused of copyright with their hit song ‘Creep’ of the famous The Hollies’ song ‘The Air That I Breathe’. Firstly, the two songs have a very similar melody, throughout although they were written in different keys to each other originally. It is very clear that that the melodies of both the vocals and the main instruments are almost exactly the same in these two songs. The choruses however are slightly different. ‘The Air That I Breathe’ has a happier and more uplifting feel to its chorus whereas ‘Creep’ on the other hand has quite sad and gloomy sound. They were also both written and released at different times. ‘The Air That I Breathe’ was released by The Hollies in 1974 and ‘Creep’ was released by Radiohead in 1992.

Another example of an official copyright case would be between English classic rock band Queen and American hip hop rapper Vanilla Ice. Rapper Vanilla Ice was accused of copyright with his hit single ‘Ice Ice Baby’ for Queen’s hit single featuring the famous David Bowie which was ‘Under Pressure’. Queen’s ‘Under Pressure’ was released in 1982 and Vanilla Ice’s ‘Ice Ice Baby’ was released in 1990. A case was opened on the matter and even Queen’s frontman, Freddie Mercury, himself said that the rap song was an act of copyright. In ‘Ice Ice Baby’ there is a direct use of copyright as the piano and bass guitar parts are exactly the same as ‘Under Pressure’, the only obvious difference between the two songs is that ‘Under Pressure’ has singing in it whereas ‘Ice Ice Baby’ on the other hand is purely a rap song.

One way in which copyright can be avoided is to simply not use work that does not belong to you deliberately, or to make something else by using that work or a part of that work. If one would want to use work that is not theirs, they should do some research and make sure that they have a plausible legal basis for using the work or obtain a valid license for use of the original work.

Conclusion

To conclude my work, I believe that copyright is a very important and hugely common aspect of not only the music business, but for various other aspects of the art sector such as art, film, and even text. Thousands of things are copyrighted every day and it is an extremely important issue. I am very confident in saying that I understand the purpose of copyright and royalties in the music industry. I am also fully aware of each of the collection societies which I have demonstrated in this essay. Everyone must be aware of copyright and of the consequences of copyright. I feel that knowing this information will benefit me in the future for working in the music industry myself.