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Thursday, August 25, 2011

Who owns the Masters? Information every young musician or studio owner should know.

Who owns the masters?

So you bought a DAW, and you invited your friend over to record a song. No "deals" were made, no verbal agreements, just a mutual enjoyment of music and some friendly songwriting. After the song demo is recorded, your friend shows it to his Dad, who gives it to a friend at Universal. In one week the demo is released "as is" and your friend is now an international pop star.

Sounds crazy right? Well it happens, but not often. So who gets paid and what? Well it all goes back to your original investment of time and equipment. Since no money was exchanged between the artist and the equipment owner, the ownership of the master goes solely to YOU the equipment owner.


Wikipedia states:

The phrase "original master recording" began in the period of acoustical audio recording - one "cuts" a recording because the sound is literally cut into the record. The resulting record was then used as the "master", or original prototype from which further vinyl or acetate copies could be pressed. There is only one original master recording, and that's the recording made at the time of the original recorded performance, but the term "master" is commonly used to describe almost anything used as a source.

For us, this translates directly to the Mixdown made into a WAV file / MP3 or whatever method you used when you selected "Bounce to Disk." In this way, the hard drive that stores both the Pro Tools session and the Mixdown can be declared as the "Master".

Wiki cont.
A multi-track [recording] may be remixed many times, in different ways, on different days, by different engineers, giving the possibility of several masters (AM radio version, mono version, LP stereo version, single version, guitarist's personal version with lead solos emphasized, etc). Any of these would have the designation "first generation", but not necessarily "master", which means there could be many alternate mixes.

Each of these alternate mixes could then be released, and each would be considered a "master" to which ownership can be declared. Masters can only be used, if a "Master use right" is obtained.

Harry Fox Agency:
What are Master Use Rights?

Master use rights are required for previously recorded material that you do not own or control... ...Master use rights can only be obtained from the owner of the master recording.

Who owns the master recording and how is it determined?

Ownership of the master

Song masters and album masters are considered intellectual property. As with physical property, ownership is acquired by purchasing it, creating it or inheriting it. In this sense, the intellectual property concept applies similarly in the purchase of a house, a car or any other property. The ownership to the master will however not necessarily correspond with the title to the copyright in the audio work. Thus, the sale of a master tape will in most jurisdictions not necessarily imply the transfer of copyright to the songs recorded.

Before a song or album master is released, the value of the master is determined by the cost to produce it. After release, the value of the master is determined by its potential to sell CDs. The master and all rights associated with it may be sold for several times the production cost or "recoup-able cost".

Here's the first question you need to ask, "What was agreed upon before the session?" In the case that nothing was agreed upon, the title lies with the executive producer or financier. He who pays the studio time, owns the product. If the artist being recorded did not offer monetary compensation in exchange for the services of your studio, then the time was financed by the studio owner. Cost to the studio can be derived from several sources, such as wages to employees, cost of materials, cost of equipment, utilities cost, consumption of perishables etc.

In the event that an agreement was made as to monetary compensation for services, a work for hire contract should be used.

U.S. Copyright Office / Library of Congress
What is a work made for hire?

Although the general rule is that the person who creates the work is its author, there is an exception to that principle; the exception is a work made for hire, which is a work prepared by an employee within the scope of his or her employment; or a work specially ordered or commissioned in certain specified circumstances. When a work qualifies as a work made for hire, the employer, or commissioning party, is considered to be the author. See Circular 9, Work-Made-For-Hire Under the 1976 Copyright Act.

Let's stay on the idea that no "work for hire" agreement was made. If a verbal Agreement was made that you would take money for studio time, then you have effectively entered into a binding contract.


1619. A contract is either express or implied.

1620. An express contract is one, the terms of which are stated in words.

1621. An implied contract is one, the existence and terms of which are manifested by conduct.

1622. All contracts may be oral, except such as are specially required by statute to be in writing.

"Certain types of contracts do have to be in writing to be valid, under laws known collectively as the "Statute of Frauds." These types of contracts include sales of land and other interests in real property, agreements which, by their own terms, cannot be performed within a year, and contracts for sales of goods priced over $500...

or Contracts for the services of $5,000 or more.

...For almost all other agreements, writing is not necessary for them to be legally binding. However, as mentioned above, proving the existence, and exact terms, of a verbal agreement is often very difficult (it boils down to a "he said, she said" matter), so putting any important agreement in writing, even if it isn't technically covered by the Statute of Frauds, is always a good idea."

For more information, see California Civil Code Chapter 923 - "Statute of Frauds"

In the event that no verbal, written, or expressed contract was made, nor payment received for services rendered, the ownership of the "Masters" stays with the financier, or studio owner.

Masters with respect to independent music and major label recording contracts

In a typical independent artist/production deal, the artist will pay the studio up front to produce songs or an album of songs. In this deal, the artist, having financed the project, owns the master. If the studio, production company or record company finances the master, sometimes called a "spec" deal, then that studio or company owns the master.

An independent artist may also do a distribution deal where the independently produced master is temporarily licensed to a major label, and then returned to the original owner; the artist, manager, producer or investor as the case may be.

Sale of the master vs. sale of albums

A recording may generate revenue for the artist and studio/record company simultaneously, regardless of who owns the master. The breakdown of revenues from CD sales, also called "mechanical royalties", is determined by the terms of the recording contract. Mechanical royalties are divided between the artist and the studio or record company in accordance with the terms that the artist has negotiated with that company.

Now that we have firm definitions or owning the "Masters," lets take a quick look at songwriting, publishing, mechanical, and Sync fees. Since you wrote /co-wrote the song, non-contract splits automatically split evenly based on U.S. Law set forth by the Library of Congress. If there are two songwriters, the split is Songwriting and Publishing evenly at 50 /50. If there are three songwriters, Songwriting and Publishing are evenly split at 33.3 /33.3 /33.3.

Upon entering into a Publishing deal, an individual or company "reps", "plugs", or otherwise connects your song or "Master Recording" to an artist to get "cut" or a placement in (various media) broadcast. The most common exchange is to offer "Publishing" in exchange for the services of your Publisher. A "Draw" is when the Publishing company offers you a monetary "stipend" in addition to the services offered. A "Draw" sounds great, but is it worth it? Well the answer is completely individual and case by case. If Beyoncé cut your song, and it will be released as her first single off her upcoming album, I would recommend you keep as much publishing and songwriting as you can keep. With a "Draw" the publishing company often takes a greater share of publishing and songwriting in exchange for the upfront money the gave you. This is a typical error made by up and coming songwriters, where lack of foresight and patience can earn a publishing company the "Lion's share." In addition, it is very common that a top artist may require a portion of the songwriting in exchange for "cutting" your song. After all, without their voice, there would be no royalties for the songwriter.

How are Royalties calculated?

A major source of income for many songwriters and music publishers are the
mechanical royalties due from the sale of CDs, tapes, records, and downloads
containing musical compositions. Under the U.S. mechanical rate (known as the statutory rate)...

The new schedule of mechanical rates, which will be in effect though December 31, 2012, is:

Physical recordings: 9.1 ¢ for recordings five minutes or less; for recordings over 5 minutes, 1.75 ¢ for each minute, rounded up.

Permanent Digital Downloads: 9.1 ¢ for recordings five minutes or less; for recordings over 5 minutes, 1.75 ¢ for each minute, rounded up.

Mastertone Ringtones: 24¢ (for non-derivative uses)

Interest on late payments: 1.5% per month, or 18% per year.

A million-selling single would be worth a total of $91,000 in combined royalties to the publisher and writer. For an album, the above royalties would be multiplied by the number of songs on the album. For example, if 10 songs were included on an album and each received a 9.1¢ royalty, a total of 91¢ in mechanical royalties would be generated from the sale of each album. Thus, if the album sells between 1,000,000 and 10,000,000 copies, the combined writer and publisher royalties for the album would range from $910,000 to $9,100,000.

Mechanical royalties are paid by the record company to the music publisher or its representative (BMI / ASCAP etc), who then shares them with the writer based on the "200% pie" 100% Songwriting and 100% Publishing.

I hope that after reading this article, we as recording engineers, music producers, and studio owners take care to protect ourselves, our investments, our businesses, our careers, and our children. By making decisions based on the current knowledge of Copyright and Distribution laws, we force companies to act honorably. Where in so many horror stories, artists in the past were mistreated and their rights stripped from them, because of a lack of knowledge on their civil rights put forth by our country. Record Labels and Publishing companies often include articles in contracts which deliberately remove us as owners and creators from our creations.

By signing contracts we do not understand, and by not understanding the current laws and standards of the music industry, we expose ourselves to financial danger easily avoided with knowledge of our rights. When Ray Charles historically demanded to own his own masters, it was a milestone for artists. Without the knowledge as to why he should own his own masters, he would have never truly gained control of his financial future. Thank you for taking the time to read this article, I hope you found the information useful.


Wikipedia "Master Recordings"

Harry Fox Agency "FAQs"

U.S. Copyright Office - "Definitions"

Lectic Law Library - "California Civil Code"

California Civil Code - "CHAPTER 923 STATUTE OF FRAUDS"

Ascap article - "Music and Money"

Edit In Posting 10/14/10

I wanted to edit in some new information I received today which will be helpful in certain situations.

Hi Daniel,

Per our conversation earlier today, please refer to this pdf section 203 grants you termination rights.
More info can be garnered from this:

Keep in mind that for a co-created work BOTH PARTIES have to consent to selling the work.

Calvin Rosekrans
Writer/Publisher Relations

Taylor Swift "Speak Now" Tour Gear Wrap-up

On Wednesday, August 24th I was given a rare opportunity to go behind the scenes of the Los Angeles Staples Center, to check out Taylor's Audio setup. This was an exciting, informational, and inspiring night and I am excited to share it with my peers.

Lead by Taylor's personal Monitor Engineer Vito, I was given Row 16 center floor seats, and a Guest Pass which allowed me full backstage access with an escort. Within moments of walking up to the Staples Center I was greeted by hordes of women aged 10 and up, carrying signs professing undying love, support, the #13, and self made custom T-Shirts. The reality of a superstar is staggering, as at one point during the show Taylor came off the stage and walked through the crowd. I was literally climbed over by pre-teen girls vying for a closer look, and Taylor hugged as many as her bodyguards would let her. 

To say that Taylor Swift stands out among the true super stars as a genuine artist is evident in two places. First, did you know that Taylor wrote her entire album by herself? This is not only impressive, but if you look at the Country Music industry or Pop, this is quite simply rare. This goes further into a true artist if you look at her catalog of writing hits for others like Colbie Callait, and the multiple Grammies she herself has won on her own songwriting and performing.  Second, as I breached the Velvet rope and was introduced to my guide Vito, I looked to the right and noticed a few crying females leaving a "meet and greet" with Taylor. I was told that Taylor's Mom goes up into the cheap seats at every concert and looks for small groups of girls who put huge effort into shirts, signs, and custom made fan-gear. These girls are personally escorted by Taylor's Mom backstage to have Tea with Taylor... which is now known amongst the super-fans as the "T-Party". 

As I looked to my left, I was greeted by the calming glow of LED, the crisp logos of Avid and Midas, and the very organized audio cables powering the show.  For those of you new to the world of Professional Tour Sound, there are two camps of Engineers, the "Monitor Engineers and Techs" and the "Front of House" guys. Taylor had two opening acts with her at this show, Josh Kelley and "NeedToBreathe".  This means that each opening and had their own Monitor Console with Monitor Mix and in Ear sends, and a Front of House Console to mix the sound coming out of the mains. Doing the math, this means 3 consoles backstage and 3 front of house. While Josh Kelley prefers AVID "Venue" for both Monitor and Front of House mixing, "NeedToBreath" and Taylor both chose to go with MIDAS "Venice 160" as their first stage Monitor console... and "NeedToBreathe" chose to use another MIDAS "Venice 160" to mix front of house. 

For those of you unfamiliar with the "Venice 160", it has often been called the touring musician's best friend, as the ultra small footprint, ultra high headroom, and Professional Recording Studio grade Mic-Pre's and Electronics are considered better than 90% of the "Studio Mixers" at less than $6000 brand new. Vito was telling me that if he was building a studio, he would buy a new Firewire enabled "Venice" and track Drums through it, and then sum mixes through it.  Not bad considering 16 Focusrite ISA Mic Pre's would cost about the same, and you would still need to buy something like the Dangerous Audio 2-Bus, and buy 16 channel EQ's.  The footprint is so small, it sits smartly atop a standard 19 inch rack. 

Vito explained to me that every piece of Audio equipment is installed twice, and that they have a redundant rig for every instrument. This means literally two of everything, in case one suddenly goes down, or if they need to ship an entire rig to another Country ahead of time. Taylor records her Vocals to Tape in the studio, and that she was very sensitive to latency caused by the digital consoles.  She solves this is two ways. First, Taylor's vocals go into an AVALON "737 sp" Mic-pre. She uses the on-board EQ and Compressor. This gives her the warmth and compression she likes to hear when tracking in the studio. This is routed into the MIDAS "Venice 160", which feeds the "In-Ear" monitors for every band member and for Taylor herself.  All the background vocals are processed directly using the MIDAS' on board Mic-Pre's and EQ's, and separate Monitor Mixes are sent to each background vocalist.  It was then that I turned my head to the left and saw the first of two DiGiCo SD7 Consoles.

DrFord and Vito, at the DiGiCo DS7 Monitor Engineer's Console

Taylor's personal PH HD 6 rig featuring 96 channels of the new AVID HD I/O
The first DiGiCo Console does three things; handles all the audio routing to and from the stage, sends "In-Ear" mixes to the Musicians and click to the drummer, and sends a complete stem mix to Taylor's personal Pro Tools HD 6 rig located under the stage.  The PT rig under the stage does another three jobs. First, it sends Timecode to the lighting techs for lighting ques, second it records every show, and third it provides playback of "click track" and backing tracks not performed by live musicians on stage.

I am told Taylor is not a fan of "freebies" and does not accept anything for free that she does not personally endorse. In speaking with Vito Taylor bought this system at full retail. Note the use of the Presonus "Central Station" for headphone monitoring during the show.  It was from here that I would be ushered beneath the stage to see Taylor's white Grand Piano and the Bell Chimes, but for this blog, lets stick to electronics.  Rounding to Stage Right, I stepped into the guitar tech's domain.

Taylor Swift's personal guitar rack featuring the famous sparkly Taylor.

Taylor Swift's Guitar Tech hard at work.

With a private stage entrance from stage right, it is here that Taylor is handed all of her guitars, which change every song, so that they stay perfectly in tune.  All Guitar peddle changes are made by the Guitar Tech for the entire show, and he was flawless in his work. Watching the show, the Guitar hand offs are so well executed that Taylor doesn't even look back. She just reaches out and Guitars magically appear and disappear as if from nowhere.

A 1 in 135 hand painted by Eddie Van Halen Strat.
"What's your favorite Guitar in the rack?" I asked. "This vintage $25,000 Eddie Van Halen" he replied.

Hannah Anders and Josh Kelley backstage.
As we left the the Guitar Tech's domain, we ran into Josh Kelley and I snapped a photo seconds before he went onstage to perform cuts off his album "Georgia Clay".  As Josh went on stage to open up to 13,500 screaming fans, I went to the front of house mix location to check out the gear. 

Josh Kelley's Front of House Venue Console.
NeedToBreath's Front of House Mix Engineer in session on a MIDAS Venice 160
Taylor Swift's Front of House DiGiCo SD7 Digital Console
Taylor Swift's Front of House Mix Engineer in Session prepping for Taylor's show.
  As I entered the Front of House Mix position, I met the Video and Lighting Engineers, and then met Taylor's Mix Engineer. I asked him what was in the rack he was working on, and he said they had another set of Redundant Avalon 737sp Mic Pres, and a redundant set of Drawmer "1960" Channel Strips to process the Bass DI for the Mains. As far as Microphones, Taylor and her background vocalists all use Audix wireless Microphones. 

I would like to say a very special thank you to Vito, who was incredibly accommodating, and kind. The overall impression I got from all the crew in Taylor's camp was cool, calm and collected. I believe this reflects Taylor's attitude, her professionalism, and talent. In closing, I would like to say that whether Taylor Swift endorses Avalon or not, Taylor's Vocals go through an Avalon 737 sp (stock tubes). I was not surprised by this as it is one of the most common Mic pre's in today's studios, and for good reason. I was surprised however, and hugely impressed, by the MIDAS "Venice 160" console. This is no small show to trust your sound to a $6000 Mixing board as the first position of sound. What you do there affects everything that comes after it. I guess MIDAS is doing it right!