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A Songwriters guide to Copyright, Publishing & Royalties in Australia


August 2, 2017 by Liam Dixon

For some time now I have received questions from artists about copyright and publishing.  Although we hear of high profile music copyright cases in the media such as Land Down Under / Kookaburra or Blurred Lines, the real importance of understanding copyright today as a songwriter or musician is that it enables you to understand how to make money and therefore build a career from your music.

 

[Some artists get uncomfortable talking in these terms so let me be clear: there is NOTHING wrong with wanting to make money from your music.  If that is the only reason to be creating your music you won’t get far but if you are unable to make money from your music, then you will never be able to make a career out of it]

This post covers the different types of copyright in music, the rights available to the owners of the copyright, licences, royalties and the collection societies so that a diagram like this makes sense to you by the end.

RIGHT NOW:

It has never been easier to make and record music

There is a shift in the way people consume music:

  • Streaming and pirating is up; while
  • physical sales (and even downloads) are on the decline.

Therefore the music market has a low barrier of entry, is flooded with supply and filled with consumers that are no longer purchasing music.  Or at least not in the way they have done previously.

Understanding Copyright and Publishing Income has therefore never been more important.

Nicolas Rapp

 You have probably already seen a graph like this (from this article by Anne VanderMey and Nicolas Rapp).  Even though it uses US figures it is reflective of what is happening in Australia and other countries.  Also important to note that this diagram finishes at 2015 – and streaming services have grown exponentially since then!

If you are a songwriter or artist, copyright is the most important asset you have.  Every musician should take the time to get their head around the basics of copyright and publishing – an understanding of these concepts is essential to maximizing your income from your creativity, helping you gain exposure and building a sustainable career.

PART I: COPYRIGHT

 

What is Copyright?

There are many ways to define copyright but as a starting point I like the simple:

Copyright = the right to copy

 

Why do we have copyright?

  • It provides protection for creators’ skill and labour
  • It enables creators to get paid
  • And therefore is an incentive for people to create

Although this might be the aim, the ability of copyright law in its current formation to achieve these goals is regularly debated.  This can be seen most recently with reactions to the Productivity Commission’s report recommending changes to Australian copyright law particularly regarding a “fair use” exemption.  [This is a whole can of worms of its own so I won’t cover it here – not least because there is a LOT of misinformation about.  But definitely have a read if you’re interested – on one side you have the likes of Wikipedia campaigning for Fair Use and on the other artists such as Sia, Flume, Washington, Briggs oppose the changes.]

 

Music Copyright

In Australia, Copyright is a bundle of rights that is broken down into “Works” and “Subject matter other than works”. [The ones relevant to music copyright are in red]

 

This is why copyright in music is broken into two parts.  The music composition (the music and the lyrics) and the sound recording.

Whoever owns the copyright in a song decides what can be done with it eg copying the song, having the song played publicly.  These rights can be transferred/assigned to others.  Alternatively others can be granted a licence to do certain things with the music (usually) in exchange for a payment (royalty).

 

How long does copyright last?

  • Until 70 years after the first commercial release (for a sound recording)
  • Until 70 years after the death of the writer/composer (for the music/lyrics)

 

Music Composition Copyright

 

The creator of a song is the copyright owner of the composition (Note: this is the creator of the song not the creator of the sound recording of the song).   If there are multiple creators this is split evenly or as otherwise agreed.  The composer and lyricist are assigned 50% of the composition’s copyright unless they agree on a different split.

 

For example in one of my favourite movies of all time The Lion King, the non-instrumental songs are split between Elton John as Composer and Tim Rice as lyricist.  The Beatles famously decided to split most of their catalogue 50/50 between John Lennon and Paul McCartney regardless of who wrote the songs.  Similarly Chris Martin splits the share of the songs equally between all members of Coldplay.  As seen in the diagram below, an artist (eg Laura Marling) who writes 100% of the words and music retains 100% of the composition’s copyright while Daryl Braithwaite has no music composition rights to the song “The Horses” – because this is actually a cover of the song written by Rickie Lee Jones and Walter Becker.   You can hear the original here.  In Gotye’s Somebody That I Used To Know (SIUTK), Wally de Backer shares the credits with the estate of Luiz Bonfa who was a Brazilian Jazz guitarist.  Gotye sampled a couple of seconds from Luiz Bonfa’s Track Seville which loops throughout SIUTK.  You can listen to Luiz Bonfa’s track Seville here.  While the split is not publicly disclosed, some reports state that 45% of the composition royalties have gone to the estate of Luiz Bonfa – which is incredibly generous if true given that neither the lyrics or melody (or chord progression for the chorus and bridge) come from Seville!

* This illustration is used as a guide – in most if not all of the above examples, part of the share will be distributed to the artist’s publisher.  I will explain the role of the publisher further along.

The owner of the composition copyright has control over who can reproduce, distribute, perform publicly, display and create derivatives of a song.  If there is more than one author of the lyrics and/or composition, then permission will be required from all of them if someone wanted to reproduce or cover their song.  For example if Walk Off The Earth or any other artist wanted to release a cover version of STIUTK they would need to get permission (a mechanical licence) from the owners (Gotye and the Estate of Luiz Bonfa).  In practice when Gotye negotiated the licence to use the sample from Luiz Bonfa’s track, it would have included the right to exploit Gotye’s song without having obtain permission from the estate of Luiz Bonfa each time.  Often songwriters will have a third party (Publisher) manage and control their songs.  If you’re not familiar with mechanical licences and publishing, don’t worry – I’ll cover this properly later.

 

Sound recording Copyright (master)

A sound recording is the recording of the song.  It is sometimes referred to as the master from the days when the final recording was actually recorded on a master tape.  The creators of a sound recording are the recording artist and record producer who are therefore the owners.  However, if an artist has been signed to a label, the artist and producer will typically have transferred their ownership of the copyright in the sound recording(s) to the label in exchange for royalty payments.  Equally independent artists may seek to pay out the producer (or be the producer themselves) to ensure they own the master recording 100%.  Because just like the Music Composition Copyright, you must have permission from all of the owners of the sound recording to do anything with it.

 

In the case of Gotye’s SIUTK, in addition to Wally himself (and the sound recording from Luiz Bonfa’s song), Kimbra sings lead and backing vocals on the track and there is also (at least) a bass player, a mixer and a masterer.

 

Before you do anything with a song you have recorded you need to have either the ownership of or the permission / release from all the rights holders to the song. If you have written and recorded your song yourself this is pretty straight forward.  You are the composer, lyricist, performer and person that owns the sound recording.  But often the lyrics in a song is written by one person and another writes the music.  Sometimes there might be someone who writes a part of the song – maybe the bridge or second verse – and then someone recorded the song in their house or studio and some friends played on the recording… it can start to get pretty messy and complicated!

Unless there is an agreement to the contrary, ownership in the sound recording is shared by the person who made the arrangements and paid for the master recording AND each performer whose performance forms part of the recording.  If there is more than one owner of the sound recording, the owners own the copyright in equal shares.

If minimal money is made from the song, then this might not be much of a problem.  But if this is not clear when the royalties come rolling in, then it can create all sorts of problems for songwriters, bands and performers.  This is why it’s important to have releases signed by anyone who performs on your recording (unless it is intended that they share in the ownership and royalties) and why band agreements are important if there is a band breakup.

Copyright can be fully transferred and assigned to others – there are even investors buying the rights to royalties on websites such as Royalty Exchange (which seems interesting and a bit scary at the same time!).  The owner of the copyright can also grant licences for others to use their music typically in exchange for a payment (royalty).  The benefit of a licence is that the owner does not lose control of their song – they are giving someone permission to use it in some way. Licences can be exclusive (i.e. restricted to only one person to use in a particular way) or non-exclusive depending on the deal.  Licences are how artists get paid from CD sales, downloads, streaming, live performance and synchronisations (“synchs”) with TV & Movies.  I’ll cover this in greater detail in the next section on Publishing.

 

5 Common Copyright Myths

  1. You need to register copyright to be protected.  No! Unlike the US, in Australia, the Copyright Act provides automatic protection once the material capable of copyright protection is expressed in material form eg written down, recorded in one way or another (eg audio, photo etc).  There are therefore no costs involved to gain copyright protection in Australia.
  2. You need to display the © symbol for copyright to be effective.  No! As copyright protection is automatic upon creation, the existence of the copyright symbol does not change the existence of copyright over the work.  However, it is good practice to use the symbol year and name of owner (eg © John Smith 2017) to notify people that the work is copyrighted and let others know who owns the copyright in it.
  3. So long as I use less than 10% I can copy someone’s work… No! Not sure where this myth comes from but suspect it may be from exception to copyright for research or study purposes which allows 10% or 1 chapter of a book to be covered for study purposes.  In relation to a song, it is an infringement of copyright if you reproduce a substantial portion of a work (music or lyrics).  And as some high profile cases have shown, this could be as a little as a bar or two of a song if it is considered a substantial portion.
  4. It’s on the internet it’s in the public domain.  The owner has waived their rights so I can copy it. No! If it’s published on the internet it is no different from if it were published in a book or on a record – copyright protection still exists.
  5. The copyright is in the notes – not the way the notes are played.  No! As referred to above, copyright infringements occur if a substantial portion of the work has been reproduced without permission.  There is no rule of thumb.  For example two bars of the melody of Kookaburra Sits in the Old Gum Tree (‘Kookaburra’) within Men at Work’s down Under was enough because they were deemed to contain a substantial part of the Kookaburra song.

 

Remember

  • Copyright can be transferred OR licenced to others – you should never look to transfer your ownership of copyright without understanding what that means.
  • If you are writing songs with other people, everyone should be clear on their ownership of the copyright in the composition
  • If you are planning to release a recording then make sure you have releases from recording artists and anyone who is not meant to be entitled to any rights or royalties from that recording.

 

Part II: Music Rights and Publishing

Publishing is commercially leveraging the copyright in songs and getting paid for it.  Publishing income is earnt through the administration, collection and enforcement of copyright.  This could be done by a songwriter or composer themselves or by an assigned representative such as a publisher.

This section is designed to set out:

  1. What is publishing;
  2. The various music rights and how they are exploited for royalties and publishing income eg performing rights, mechanical rights and synchronization rights.
  3. What publishers do;
  4. Five things songwriters should watch out for in Publishing Agreements

 

If you’ve ever wondered what terminology like ‘synch deals’ are, or what mechanical royalties or mechanical licences are, then this should cover it all for you!

 

So we know that any recorded song is made up of two separate copyrights: the copyright in the composition (owned by the songwriter/s) and the sound recording (owned by the recording artists and the producer or person who paid for the recording).  Traditionally, the composition copyright was transferred to the composer’s publisher while the record label owns the copyright in the sound recording.  The two types of copyright need to be kept in mind considering how the owners of the copyright can exploit (eg reproduce, publish, perform, communicate and make adaptions of) the song.

Note: To keep things as simple as possible and stop me repeating myself many times over, for this section I will refer to the composer and lyricist collectively as the “songwriter” and the recording artist/producer/person who paid for the record as the “recording artist”

 

What is publishing?

A music publisher’s job is to ensure the creators (eg songwriters) receive payment when their compositions are used commercially.  For a publisher to do this, the songwriter must first assign the copyright of their composition to the publisher.  The publisher licenses compositions in exchange for royalties which it then distributes to the songwriter.  If you’re a songwriter and you have not signed to a publisher then you own your publishing rights and can look after all of this yourself!  While many artists do this, it can be a very time-consuming thing to manage.

A publisher will seek to maximize the ‘publishing income’ – the income flowing from the composition.  For example they might have your song recorded and released by recording artists (eg as a cover), for it to appear on TV (synchronization deal) and will monitor when your song is broadcast or performed publicly and ensure you are properly remunerated.

 

Publishing Income and Copyright

Now that we know about the owners of copyright and publishing we can look at how songwriters and/or publishers leverage the copyright for publishing income.

The owner of the music copyright and sound recording copyright in a song has the exclusive right to:

  • Reproduce (copy) eg:
    • put songs on CD, download, stream (mechanical)
    • film / tv / advertising (synchronisation)
  • Publish the work:
    • print sheet music (this form of publishing explicitly excludes making records or live performance)
  • Perform and/or communicate the work in public
    • broadcast music on tv/radio
    • Play song publicly – shopping arcades and venues
    • Perform the song live
  • To make an adaption of the work:
    • make an arrangement

Rights of the owner of the composition copyright (the song not the sound recording)

The owner of the composition copyright (eg songwriter(s) and/or their publisher) has the exclusive right to do the following (or to licence others to do in exchange for royalties):

To Publish – in print form eg sheet music

Make Adaption eg make an arrangement of the song, translating, transposing

Reproduce eg reproduce the work in material form.  Note: this is not the reproduction of the sound recording of the song.  That would require a licence to reproduce the sound recording as well which is covered further below.

However, if someone is recording your song, then they will need a mechanical licence from you to reproduce it.  We cover mechanical licences in more detail below as well.

Communicate eg perform the song publicly (register with APRA)

Rights of the owner of the sound recording AND the composition copyright

The owner of the sound recording cannot do anything with that right on its own.  They must have the right to exploit the composition as well.  For example when covering Gotye’s “Somebody I used to know”, Walk Off The Earth needed to have the right to reproduce (and communicate) the song to sell copies of their cover of the song or even to publish the cover online.

[While many artists will not have the right to reproduce / communicate the cover particularly if uploading to a site such as Youtube, that is another issue altogether!]

So, the owner of the composition copyright and the sound recording copyright (traditionally a publisher and a record label) has the exclusive right to reproduce and perform/communicate the sound recording in exchange for royalties.

Reproduction rights

There are two types of reproduction rights – Mechanical and Synchronisation – which I will explain further below.

Mechanical Rights

Mechanical rights relate to capturing or embodying a composition in a form that allows it to be heard later.  It is easiest to understand if you think of this as simply making a copy of the song.  However, today this also needs to apply in situations when music is consumed but an actual copy is not made eg streaming.

Why is it called Mechanical? 

There’s certainly nothing mechanical in the copying of a wav file.  But before records were produced, the primary method of reproducing songs was on music boxes or player pianos using piano rolls.  While these mechanical devices were superseded by records and other mediums, the term for reproducing music stuck!  So it is still called mechanical today even though our process of copying a song is mostly electronic or digital.

When the reproduction of a song is audio-only, the copyright owner’s fee for allowing the reproduction is known as mechanical income.  Common examples are CDs, cassettes, records, digital downloads and streaming.  If a recording artist wishes to record and release a song written by someone else, they must get a Mechanical Licence in exchange for a payment (mechanical royalties).

Mechanical licences can be issued directly by the writers (or their publishers) to the party requesting to record and reproduce the song.  Alternatively, a statutory licence can also be obtained by the music rights society  (AMCOS in Australia) which requires the statutory royalty rate of 6% of the retail selling price be paid to the songwriter (or their publisher).  However, AMCOS can only issue statutory licences once the song has been recorded and released to the public.  This is to ensure that the songwriter/creator is able to control the way the song is first released.  Most of the time record labels prefer to deal directly with the writer/publisher because they can negotiate lower amounts and less frequent accounting requirements – but the statutory royalty rate is still important as a starting point.

Whenever a song is reproduced for sale (eg pressed on CD), downloaded online or streamed, a mechanical royalty is owed to the owner of the copyright.  Even when the CD’s don’t sell.  It is important to note that this applies both if Artist A has written and recorded the song and in the circumstance of Artist B recording Artist A’s song as a cover.  Artist A will be entitled to mechanical royalties in both occasions while Artist B will only be entitled to sound recording royalties.

For more on the mechanical royalty rates you can check out the AMCOS distribution practices here

When records were bought in large quantities, mechanical rights formed the bulk of many songwriters and band’s income stream.  The jury is out as to whether streaming is able to provide a viable income for songwriters and performers.  In the meantime, the importance of synchronisation continues to grow.

 

Synchronisation Rights

Synchronisation (‘Synch’) rights are different to mechanical rights in two key respects.  Firstly, the reproduction is audio-visual in that it combines sound recordings with moving images (eg for TV, movies and advertisements).  Secondly, a synchronization licence or ‘synch deal’ will also relate to the copyright in a specific sound recording rather than just the composition copyright.   This means that for someone to enter into a synch deal, they must have the exclusive right (through ownership or licence) to deal with the composition and sound recording copyright.  A Synch agreement will therefore include a Synch licence for the composition and a Master Use licence for the sound recording (see diagram further down).

Synchronisation licences typically involve a payment on royalties together with a lowered royalty rate. A buy out of future royalties for a flat fee is also common.  Royalties are due for public performance of the composition and master.  By way of example, if Artist A enters into a synch deal allowing for their song to be played in a TV advertisement, then (depending on the agreement) they would receive a fee for the use of their song and for the communication royalties for each time the advertisement containing their song was broadcast on TV (more on performance rights below).

Today synch deals offer plenty of opportunities – they are usually scored by publishers and can be very lucrative.  Where previously advertising Synchronisations were selling out, in today’s world people seem to understand that artists have to take all the opportunities they can get.  With Spotify playlists and apps such as Shazam making it easier to track down songs people are finding catchy, Synchronisations allow artists to find new fans in new parts of the world.  Last year, Australian band Empire of the Sun hit the top 100 in the US for the first time on the back of “Walking on a Dream” – some eight years after its release.  This is largely due to featuring in a Honda Civic ad in the US.  In the lead up to the release of their third album, the timing couldn’t have been better!

Public Performance / Communication Rights

Copyright owners also have the right to allow the recording of the song to be performed and communicated publicly. These rights cover situations such as live broadcasts eg TV and radio, but also communication in public spaces eg in a shopping centre, in pubs and clubs as wekk as digital downloads and streaming.  The idea is that every time copyright music is performed in public or broadcast, a royalty is payable.  While it might be hard to ensure that this always occurs, most ‘public performance’ of music is licenced by the Australasian Performing Rights Association (APRA) who work hard to ensure that these royalties are paid to the songwriter or their publisher.  We will have more on APRA and the other Collection Societies in our next section.

APRA issues licences to the users by offering them a “blanket licence” which allows them to use any music in its catalog for a fixed fee.  APRA then divides these fees collected from all the licencees (broadcasters, streaming services, online services and from public performances) and sends the writers /publishers their entitled rate.

[Initially when starting this post I wanted to flesh out the costs and royalties associated with each income stream that APRA collects but the reality is that it is so complex – each type is calculated in its own way.  So, if you are interested in knowing more about this, please have a read of the APRA Distribution Rules and Practices.]

The manner of calculating how much will be payable to APRA for the right to publicly perform music is different for each type of use.  Each have a different formula but a good rule of thumb is where music is used to enhance a business (eg background music for a retail store), flat rates apply while where music is at the core of the business (eg commercial radio) then royalties are based on a percentage of gross income.

Free to air TV, cable TV, radio (commercial, community) are scanned by automated systems of APRA for their usage of works.  Where it is not automated, broadcasters deliver playlists and usage sheets to APRA to form part of the calculation.

This is why it is important to sign up to APRA – to maximize your public performance royalty income.

Combination of rights

To add further confusion to the mix, many of the uses will require more than one of the rights above:

Synchronisation – as explained above, if your song is to be used in combination with moving images eg in a TV show, then it requires the sound recording of the song to be synchronized (reproduction right) with the television program and then it requires a communication right for each time it is broadcast on TV or radio.

Digital Download (eg iTunes download) – requires a communication right (through having available and transmission on the internet) and a mechanical reproduction right through the copy (download) of the song.

Streaming (eg Spotify) – A musical work is reproduced when a song is uploaded onto a server for the purpose of a streaming. The musical work is communicated to the public in the operation of a streaming service.

Rights you were granting without knowing it

So this might seem like it’s getting a long way away from what you actually do.  To put it in context, there may be many examples of you granting licences for others to use your music… potentially without you even knowing it!  This is no cause for alarm because in most cases, this would have been your intention.  For example, have you ever uploaded your music anywhere so that it could be streamed or downloaded?  Here are some excerpts of some of the terms for Soundcloud and JJJ Unearthed.

What do publishers do?

So, if after reading this far you think the role of a publisher seems broad and ambiguous, you’re not the only one!  As the music industry has changed, so too have the lines that once defined the publisher’s role.  These days big publishing companies often play the role that was typically done by record companies such as helping develop artists or writers, helping them get signed by labels and offering career advice.  Some publishing companies just offer the administration side while many writers do this themselves (but it can be a full-time job!)

The various functions of traditional or established publishers include the following:

Administrative

  • Protection from unauthorized use
  • Administration re copyrights
  • Collecting & tracking of fees / royalties
  • Participating in industry associations eg APRA AMCOS

Licensing:

  • Persuading users of music to licence the music of their artists
  • Securing synchronization licences
  • Publishing sheet music or licensing others to publish it

Creative:

  • Persuading artists / record companies to record copyrighted material that it owns or controls
  • Promoting the reputation of its writers
  • Pitching songs to record labels, advertising agencies.

Publishing Agreements

As mentioned above, when a songwriter and publisher enter into a publishing agreement, the songwriter transfers the control of the copyright in the song to the publisher to enable them to control and manage the song.  In exchange, the publisher gets a portion of the royalty streams which they help generate.

Publishing deals come in all shapes and sizes.  Some publishing deals will offer an advance on future royalty income.  This is useful if you need funds to cover recording costs or to buy equipment.  But it is also likely to lead to the publisher receiving a larger royalty split.  Most publishing agreements will not expire if you haven’t recouped your advance within the term of the contract.  Some examples of online synch focused publishers worth checking out are: MusicDealers, PumpAudio, JinglePunks and MusicSupervisors.

You should take care before signing any publishing agreement and if you are unsure, you should always get expert advice.  If this is you, make sure you read on below to see our “5 things for Songwriters to watch out for before entering into a Publishing Agreement” as a starting point.

5 things Songwriters should watch out for with publishing agreements

  • Avoid contracts that use words deeming the songwriter to be ‘a servant for hire’. A carry over from the ‘Tin Pan Alley’ days where songwriters were employed to write songs which meant their employer owned the copyright. Some publishers still use contracts that use this phrase. At a minimum, this should be struck out – and if you see it, then you should probably question whether you still want them to be your publisher.
  • Publishing deals usually have a duration of 3-5 years. If you are paid an advance, your contract will not expire if you haven’t earned back your advance within the term.  Be wary of publishing agreements that sign away your control over your works permanently.  The copyrights in your songs are your most vital assets as a musician – you should never have to sign away your rights to your songs permanently to a publisher.
  • Be aware of whether the publishing agreement relates to “General Works” or “Specific Works”. General Works refers to all of your compositions (that have not already been licenced elsewhere) while Specific Works refers to the compositions or group of compositions listed in the agreement.
  • Are the rights assigned (i.e. transferred), exclusively licenced (you can’t licence them to someone else in the period) or non-exclusively licenced (you are not restricted from entering into other agreements)?
  • Are there any obligations on the publisher to exploit your music? For example, what happens if they are not doing anything?  What happens if they are doing a poor job as your publisher?  You might have targets you have to meet (eg writing x amount of songs in y period of time).  Does your publisher have any criteria they need to meet?  You would be amazed at how many publishing agreements I have seen floating around that do not have any obligations placed on the publisher.  Artists are locked in for the term with no termination rights.

PART III: Collection Societies, industry bodies and Royalties

So, after covering copyright, publishing and the publishing income that is earned from copyright, we now turn to how this is calculated and collected.  Collection societies were established to collect and distribute income from the exploitation of copyright in music (composition and sound recordings).

In Australia, the four main collection societies relevant to songwriters and recording artists are:

  • Australasian Performing Right Association (APRA)
  • Australian Mechanical Copyright Owners Society (AMCOS)
  • The Phonographic Performance Company of Australia Ltd (PPCA)
  • Australian Recording Industry Association (ARIA)

I will go into a bit of detail as to what each do and why you should sign up to them.  But first I will include this diagram which I think is a helpful illustration as to how each of the four collection societies fits into what we’ve been covering.

 

Time to signup!  Why you should sign up to the collection societies

Sign up to APRA if you own the rights in a composition copyright because you will then be eligible for APRA payments (both when you perform your songs and report them to APRA and for when your songs are communicated or performed in public).

Sign up to AMCOS if you own the rights in a composition copyright because you will then be able to earn mechanical royalties for your compositions released on a recording for sale to the public or that have been reproduced on a production music recording.

Click here to sign up to APRA / AMCOS

Sign up to PPCA if you are an Australian owner of sound recording copyrights because you will then be eligible for PPCA payments (payments for when the sound recording is communicated or performed in public)

Click here to sign up to PPCA

APRA – Public Performance of the Composition

Australasian Performing Right Association (APRA) was established in 1926 to ensure songwriters were able to exercise some control and gain reward from public performance and communication of their works.  Today this covers live performances, public performances, broadcasts (TV, radio), streaming, digital downloads and ringtones.

APRA is the equivalent of ASCAP, BMI and SESAC in the US and PRS in the UK.

If you signup to APRA as a writer, you assign to APRA your exclusive rights to publicly perform your song and the right to communicate your song.  This does not prevent you from performing or communicating your song (or allowing someone else to do the same by way of a licence).

By signing up to APRA, it allows you to:

  1. be paid a performance royalty for each original song you perform live. This is in addition to any payment you receive for the show (unless it is a private event).  It is a self-reporting system so if you don’t report, you won’t get paid; and
  2. collect due royalties from whenever music is performed live, broadcast on radio or television, downloaded or via any of our many distribution systems.

To maximize public performance royalty income, it is highly recommendable to sign up with APRA (or your Performing Rights Organisation if you live outside Australia/New Zealand) directly as a writer, and also be affiliated with an engaged publisher that is signed up with one. Take good care to register your repertoire with APRA and have the publisher do the same on their end. You should keep track of dates, set lists and broadcasts in which your music has been made performed or communicated in public, so that you can check whether all of these have been accounted for and if not check in with APRA and/or your publisher.

AMCOS – Rights to Reproduce the Composition

Australasian Mechanical Copyright Owners Society (AMCOS) was established in 1980 as a subsidiary body of the publishers’ industry body AMPAL (Australian Music Publishers Association Ltd) and in 1997 moved under the administration wing of APRA.  AMCOS administers the collection and distribution of mechanical copyright fees.  These are the fees that must be paid for the right to use a song on a record.

AMCOS is the equivalent of MCPS in the UK and the Harry Fox Agency in the USA.  However, unlike MCPS, AMCOS does not act as a central collecting body for the majority of mechanical copyright royalties paid by the major labels.  Most publishers collect mechanical copyright fees directly from the majors.

AMCOS performs a range of functions where music is reproduced (rather than performed or communicated which is APRA’s domain) such as:

  • Licencing record companies (but not the majors) and individuals for the mechanical reproduction of member’s works and works administered on behalf of affiliated overseas societies eg MCPS in the UK;
  • Licencing production music;
  • Licencing musical works used in music videos; and
  • Licencing music for use online and in mobile telephony.

Combined APRA-AMCOS licences:

APRA collects income flowing from public performance and communication rights in respect of musical works while AMCOS collects royalties in respect of mechanical reproduction of those works.  Purely streaming of music involves an exercise of just the communication right which is collected by APRA.  However, uploading a song to be streamed or downloading a song involves an exercise of two rights – AMCOS’ mechanical rights (exercised by reproduction of the song on the computer’s hard drive) and APRA’s communication right (exercised by the online delivery of that work from the source to the end user).  APRA and AMCOS deliver a combined licence to administer the download process for the benefit of their members and the users.

PPCA – Public Performance of Sound Recording

The Phonographic Performance Company of Australia (PPCA) was incorporated in 1969 after the Copyright Act 1968 introduced the exclusive right to cause sound recordings to be heard in public and a broadcast (communication) right which covered TV and radio.

The PPCA grants licences covering the recording and/or music video of the song to television and radio stations, public places with sound systems (such as pubs, clubs, gyms, shops, restaurants, dance studios) and in-flight music.

Where APRA is transferred the exclusive rights and AMCOS is licenced the rights, the PPCA does not receive any rights from its members.

The PPCA collects the licence fees from broadcasters and businesses publicly playing or broadcasting sound recordings / music videos containing sound recordings and distributes the money to copyright holders and Australian recording artists registered with PPCA for the following:

  • Public performance of sound recordings
  • Public exhibitions of music videos
  • On hold music
  • Radio and TV broadcasters
  • Online – radio and TV simulcasts, music video in webcasts

ARIA – Reproduction of Sound Recording

To complete the quartet, I will now focus on the Australian Recording Industry Association (ARIA) which looks after the reproduction rights relating to sound recordings.  Unless you are signed to one of its member labels, then this is unlikely to have much relevance – if someone wants to reproduce your sound recordings they would come to you directly.  But it doesn’t hurt to understand how ARIA fits into the collection societies world.

ARIA was stablished in 1983 by six major record companies – EMI, Festival, CBS, RCA, WEA and Universal.  The association has more than 100 members from the largest record companies and labels to small indie labels run by 1-5 people.

It oversees the collection, administration and distribution of music licenses and royalties.  It grants non-exclusive reproduction licences for sound recordings and/or music video clips controlled by its members – but these are also generally negotiated directly through labels without ARIA’s involvement.  Fees generated from the ARIA licences are collected and then distributed to the ARIA Licensors (i.e. the labels) based on the reports that the Licensees (the users of the sound recording) supply.

ARIA is well known for its industry awards night – the ARIA Awards – but the the ARIA charts are often criticised for being open to manipulation.  For example, “Gold” and “Platinum” ARIA awards are based on units shipped to retail outlets, not on how many are actually bought by customers.  Equally artists and their labels often deliberately choose genres that generate less sales to increase their chances of winning awards rather than genres that are representative of their music.

One Music Australia

What is One Music Australia?  One Music Australia is a joint venture between APRA AMCOS and PPCA which aims to simplify the process of acquiring a public performance licence.  The joint venture follows the introduction of OneMusic NZ three years ago and is due to launch mid-2018.  For more click here

 

PART IV: The Future

Things are moving at a fast pace.  The music industry has had to deal with the decline in record sales, cassettes, CDs and now digital downloads.  While there are many critics of the streaming model, there are also reasons for optimism.

APRA AMCOS Chief Brett Cottle had the following to say at the Music Australia Roundtable discussion regarding the subscriber numbers (from the likes of streaming services such as Spotify):

“So, a year ago I said that subscriber numbers needed to get to 4 million, about 4 or 5 times of the then subscriber base. Over the past 12 months there has been an increase of about 150 percent, to 1.4 million subscribers. In my view, we’re about a third of the way towards a subscriber base which will provide revenue for the industry and an ecosystem which is equal to or better than it ever was at the peak of the physical market.”

There are a number of advantages of the streaming model.  Although physical sales have dropped, it has also reportedly caused a drop in the number of illegal downloads.  It also potentially allows artists to generate a more consistent income (if the artists are popular enough and there are enough subscribers).  For example, if an artist sells a record, CD or even a download, then it will make them money once.  With a streaming service, so long as the song is listened to it will continue to make money.

Right now, there are not enough people using the services for it to be viable for the artists, labels or even the streaming services themselves.  This is put in perspective by data journalist and information designer David McCandless’ “How much do music artists earn online?” as reproduced in the Guardian in 2015.  McCandless demonstrates how much an artist could earn from a single sale/stream and how many of these would need to occur to earn the US monthly minimum wage of $1,260. If you haven’t come across it, it’s well worth the look!

Streaming is said to cut out the middleman – such as record label people – which allows the artists to access their profits directly.  But as the 360 record label deals have shown, as the models and income streams of the music industry change, so too do the arrangements that record and publishing labels put to artists.  They will do what they need to survive.

While there is reason for optimism (maybe less so for the live music scene) and reason for skepticism, I think the advances in technology particularly regarding Blockchain (see below) could revolutionize the music industry in a way that will lead to more $$ ending up in the pockets of the writers and performers.

 

Blockchain

What is Blockchain?  It’s the same technology behind Bitcoin which is touted as a way to pay artists fairly for their work.

There is no definitive definition or description for blockchain.   But its explanation usually includes the following:

A distributed ledger (rather than the ledger existing in one place, it’s shared among computers all around the world) with a built-in consensus mechanism which allows people to do business with each other and trust each other without having to rely on third parties (for Bitcoin this means the banks for the music industry this might mean record labels, publishers, online aggregators and collection societies) thus saving costs and time.

There are plenty of fantastic videos available online that do a good job of explaining blockchain if you want to know more – here’s one as a starting point.

Source: Financial Times

Some of the benefits Blockchain could bring to the music industry are:

  • Removing intermediaries and slashing distribution costs so more $$ goes to the artists
  • Dealing with royalty collection and distribution securely and accurately
  • Smart contracts – payment instantly rather than months/years later
  • Licensing and rights management – ability to ensure data relating to rights holders of songs and sound recordings are current.
  • Greater transparency
  • Elimination of piracy

There are enormous implementation challenges.  Certainly like other initiatives designed improve the rights and licensing for artists such as the Global Repertoire Database, many stakeholders might not want Blockchain to succeed – after all there a lot of jobs and businesses that will no longer be needed.  But at this stage there are plenty of exciting developments so if you want to know more then I recommend doing a bit of googling on this to keep up with the latest developments.

It is certainly not the answer to all the problems in the music industry but Blockchain shows potential in offering a foundation that can bring all artists (from amateur to global superstars) the chance to offer their music to the world and be paid for it.

That’s it for now – I hope you find this helpful.  If you have any questions, corrections or comments please write them in the comments section below and I (or someone else in the community should get back to you).

 

Disclaimer

This page is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. The content of the post may not reflect the latest legal developments, decisions or practices.  By using this site you understand that there is no attorney client relationship between you and the writer or Melting Pot. This post and this website should not be used as a substitute for competent legal advice from a professional legal practitioner in your jurisdiction.  Legal advice should always be sought separately before taking any action based on this post.

Thank you

There are many resources that I have used or found helpful when putting this together – please check them out if you are interested in knowing more.  In no particular order:

Heroic AcademyAttorney General’s Short Guide To CopyrightArts Accessmusicrights.com.auartslaw.com.auapraamcos.com.auaria.com.auBucket Orange Magazineventurebeat.comtechcrunch.comhypebot.comThe ConversationHarvard Business ReviewSimpsons.com.aumusicinaustralia.org.au

The views expressed in this article are the views of the author and not necessarily the views of Melting Pot.


Author Details

Liam Dixon

Liam is the founder and director of Melting Pot. Once a regular performer at Melting Pot events as the writer / frontman for local band Creatures of Karma, these days Liam works as a commercial lawyer by day. When hes not busy doing lawyer stuff or with Melting Pot, Liam loves to write, play and record his own music and see the odd gig around town.


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