In the modern age of music, music copyright, licensing and royalties play a very important part in earning money from the business. Those musicians with a better understanding of how licensing and royalties work are more likely to be financially comfortable than those who don't.
There are three main companies for songwriters, composers and publishers which exist to collect licence fees from anyone that uses music for a business benefit and then pay royalties to music creators in the UK and around the world. These are PRS. MCPS and PPL
PRS for Music as an umbrella, which has two important sub-companies: Performing Right Society Limited (PRS) and Mechanical-Copyright Protection Society Limited (MCPS). PRS represents songwriters, composers and music publishers and collects royalties on their behalf whenever their music is publicly performed. This includes performances of both live and recorded music or music from TV and radio, in premises from concerts halls to corner shops. MCPS also represents songwriters, composers and music publishers, but collects royalties on their behalf whenever their music is reproduced for products such as CDs, digital downloads and musical toys. [1] Venues and businesses need to purchase a licence from PRS for Music which enables the public performance or reproduction of music in that venue. The Copyright, Designs and Patents Act 1988 states that if you use copyright music in public, you need the permission of every writer or composer of the music you wish to play. PRS for Music acts as the middle man and a music licence gives the owner the legal permission to play the millions of songs controlled by them without having to contact the music creators directly.
PRS for Music asks venues to provide full details of all music performed as well as gathering information from TV and radio. With smaller businesses, surveys are used. From all that information they calculate the royalties due to each member of PRS for Music. Royalties to PRS members are distributed in April, July, October and December each year.
The third company, Phonographic Performance Limited (PPL) is an entirely separate independent company from PRS for Music. In most instances a licence is required from both before you can legally play recoded music in public. Both organisations licence the use of music and collect royalties but each represent different people. PPL collects and distributes money for the use of recorded music on behalf of record labels and performers. PRS for Music collects and distributes money for the use of musical composition and lyrics on behalf of authors, songwriters, composers and publishers.
Another source of royalties I would like to mention are synchronisation (or synch) royalties. Synching refers to using the music together with visuals e.g. a song in a film, tv show or even live theatre. In terms of numbers, the royalties paid can be up to say $250,000 for a movie film score.
Music Streaming Services
I wanted to briefly mention royalties from music streaming services such as Spotify and Pandora. A lot of artists are outraged at the ridiculously low royalty rates that they receive from plays of their tracks on these services. Spotify say they pay an average of £0.004 per play to their artists on a section of their website called Spotify explained. However, I don't think things are as bad as they first appear.There are a lot of very positive statistics on that site too, for instance they have given out $1bn in royalties, $500m of which were paid in 2013 alone. The global value of the recorded music industry has been steadily falling and Spotify aim to provide a better service than piracy and convice people to pay for music once again. I am a Spotify premium user and I have barely pirated any music since. Statistics collected by spotify actually show that 55% of 18-29 year olds pirate less when offered a free legal alternative. Spotify premium users pay more on average per year than normal US consumers that purchase physical music or download digital music. Spotify actually pay 70% of their total revenue as royalties to rights holders and compared to other video or radio streaming services they pay considerably more. Spotify is a huge and very useful marketing platform and even if the royalty rate may be low, the chances are more people will hear an artists music and then they may want to go to their concerts or buy that persons's merchandise.
Historic context of copyright
"Copy, transform and combine it's who we are, it’s how we live, and of course, it's how we create." Kirby Ferguson - Everything is a Remix Part 4 [2]. In this part, he goes on to talk about the original intentions of copyright and how ultimately the system is a failure. "Our system of law doesn't acknowledge the derivative nature of creativity. Instead, ideas are regarded as property, as unique and original lots with distinct boundaries. But ideas aren't so tidy... and when the system conflicts with the reality the system starts to fail."
In America in 1790, copyrights and patents were invented to make sure that original creations were protected from being copied for a limited period of time in order to give creators a window to earn a profit. Copyrights covered media and patents covered inventions. After copyright expired, creators work entered the public domain to be freely used and built upon by anyone. That was the goal of copyright: to have a large public domain where ideas, products, arts and entertainment would be available to all for the good of humanity. The idea of 'intellectual property' turned copyright into what we know in the music industry today.
One famous example is that in 1981 George Harrison lost a $1,500,000 lawsuit for subconsciously copying "He's So Fine" by The Chiffons in his song "My Sweet Lord". More and more copyright acts are being developed and put into effect as time goes on and some musical corporations exist for the sole purpose of suing others. Famously, Bridgeport music sued the hip hop group N.W.A. for using a heavily altered 2 second sample in one of their songs. This effectively killed sampling, no matter how small, and made it difficult and expensive to use samples in songs. Copyrights and patents were invented for "the encouragement of learning" and to "promote the progress of useful arts". In the modern era of music, copyright doesn't understand the need to "copy, transform and combine" and rather than progressing and expanding off of each other, artists are constantly being sued for copying and theft of "intellectual property".
Music 'Piracy'
We are currently living in the 5th age of media, the Digital Age. Preceding the Digital Age in chronological order are:
- Oral Age. Campfires and singing (10,000 years ago)
- Scribal Age. Writing and documenting (5,000 years ago). This is the point where people realised that in order to establish ownership of media, there needed to be proof of creation and ownership.
- Print Age. Mass produced texts and sheet music (1,000 years ago). Towards the end of this age was when copyright came into effect in order to stop people from literally copying sheet music.
- Electric Age. (around 100 years ago) This age covers physical music like vinyl records and cassettes, radio, television and film.
- Digital Age. The age we live in now. The internet is dominant, music sales from iTunes etc are huge and illegal downloading is huge too.
Back in the day, before the internet, if you wanted to steal music you had to walk into a store and physically steal a CD or a cassette and get out without the guards noticing or the alarm bells ringing. Nowadays with filesharing and the fact you can just take the audio from any youtube video, obtaining songs for free is stupidly easy. Everything used to be physical, sharing music with a friend meant lending them the tape or maybe even a 12" vinyl. If you wanted them to hear a playlist you made, you had to physically make a mixtape and hand it to them. Copying a tape faded it, listening to a vinyl could scratch it. There was a fragility and very important realism to how music was shared and copied. In the digital world, stealing from someone is more like stealing an identical copy rather than taking a proper copy of a record. A million people can download the same song effortlessly for free, something that was impossible 20 years ago. It's also important to note that there is no loss in quality from sharing and copying digitally too. Immediacy and convenience are very important words when talking about this subject. As immediacy and convenience rise due to disruptive technologies like the internet, meaning and value lowers. I did some quick maths and I found that, buying music legally from itunes at 79p a track, it would cost me well over £4,000 pounds to fill my 32gb ipod with songs. Not to mention the fact that I have to sign up, make an account and enter lots of details and credit card information to do so. Whereas, I can very easily find a proxy for ThePirateBay and donwload that 32gb very quickly for free. Music 'piracy' isn't necessarily a bad thing. The Arctic Monkeys' debut album sold over 360,000 copies in a week and remains the fastest selling debut album by any band and this was largely due to the internet and free downloading and sharing. The Arctic Monkeys found that early on people knew all the lyrics to songs they had barely had a chance to perform. Illegal downloading isn't always a bad thing and can often boost the career of a band due to the fact that music can spread enormously quickly and easily. In the modern music industry, a much larger proportion of a bands profits come from live performance and merchandise anyway and music sales aren't necessarily the majority of a bands income. In fact, an extremely recent article from digitalmusicnews.com has found that the top 1% of artists earn 77% of recorded music income and they say "Whatever money is left in recordings, you're probably not making it."
On the other hand, famous examples of lawsuits against illegal downloading services exist. The most iconic case of this is Metallica vs Napster. Napster was a peer-to-peer network where users could easily upload their digital music and it could be re-downloaded by any other user. At its peak, Napster had 80 million registered users and arguments exist that it was a huge promotional power and contributed to many bands successes. Lars Ulrich of Metallica found that a demo of their song "I disappear" had been circulating before release and led to some radio play in the states. Lars traced it back to Napster and was horrified to find their entire discography free to download with ease. Metallica sued for $10,000,000 and Napster as a P2P site was shut down.
DRM, short for "Digital Rights Management" is an anti-piracy technology used by copyright owners to remote control how people can install, listen to, view, copy and share files. DRM can be thought of as a sort of digital padlock on a file and some argue that is should be considered necessary to protect 'intellectual property' just as a real padlock protects physical property. Have you ever bought a song on iTunes and realised that you can only access that file on 5 other computers? That's DRM in action. DRM in my opinion is a really bad thing as in effect it creates the illusion of ownership and inconveniences legitimate customers. An example of DRM being a terrible thing is when, rather ironically, Amazon remote deleted Kindle users copies of George Orwell's 1984 & Animal Farm. The reason behind it was that the books were sold by a third party seller without the rights to do so. If this had happened with the physical books, Amazon would have no right to enter your property and burn your book, yet amazon seem to have the power and the right to remotely delete content with no notice, warning or consent.
The issue with copyright in the digital age of music is that it really doesn't understand immediacy and convenience compared to meaning and value. Music copyright is still tailored to how things were before the internet where physical items were more personal and valuable. The world is constantly changing, technology is forever advancing and once in a while something entirely new comes along that changes everything forever. In that way, music is forever adapting and having new forms and right now we still haven't really figured everything out yet.
DRM, short for "Digital Rights Management" is an anti-piracy technology used by copyright owners to remote control how people can install, listen to, view, copy and share files. DRM can be thought of as a sort of digital padlock on a file and some argue that is should be considered necessary to protect 'intellectual property' just as a real padlock protects physical property. Have you ever bought a song on iTunes and realised that you can only access that file on 5 other computers? That's DRM in action. DRM in my opinion is a really bad thing as in effect it creates the illusion of ownership and inconveniences legitimate customers. An example of DRM being a terrible thing is when, rather ironically, Amazon remote deleted Kindle users copies of George Orwell's 1984 & Animal Farm. The reason behind it was that the books were sold by a third party seller without the rights to do so. If this had happened with the physical books, Amazon would have no right to enter your property and burn your book, yet amazon seem to have the power and the right to remotely delete content with no notice, warning or consent.
The issue with copyright in the digital age of music is that it really doesn't understand immediacy and convenience compared to meaning and value. Music copyright is still tailored to how things were before the internet where physical items were more personal and valuable. The world is constantly changing, technology is forever advancing and once in a while something entirely new comes along that changes everything forever. In that way, music is forever adapting and having new forms and right now we still haven't really figured everything out yet.
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