3. Ownership and Licensing

1. The Composition (The Song)

Ownership: Held by Composers and Songwriters.

The composition consists of the melody, lyrics, and arrangement. Even if a song is covered by 100 different artists, the original composer still owns the underlying composition rights.

The Chain of Licensing

1. Creators → Publishers: Composers license their rights to Publishers (or Publishing Administrators) to manage the “paperwork” and maximize revenue.
2. Publishers → Rights Societies: Publishers license these rights to PROs, MROs, or CMOs depending on the territory.
3. Rights Societies → Music Users: These societies issue Blanket Licenses to entities like radio stations, bars, venues, and streaming platforms, allowing them to play any song in their massive catalog.

Right Societies and Collection Agencies

• PROs (Performance Rights Orgs):
  Specifically license Public Performance Rights (e.g., BMI, ASCAP).
  They collect money when music is played in public.
• MROs (Mechanical Rights Orgs):
  Specifically license Mechanical Rights (e.g., Harry Fox Agency).
  They collect money when music is reproduced (CDs, vinyl, or digital streams).
• CMOs (Collective Management Orgs):
  These are managing a combination of both performance and mechanical rights.

2. The Sound Recording (The Master)

Ownership: Held by Independent Artists or Record Labels.

If an artist pays for their own recording to be made, they own the “Master.” A.K.A. sound recording. If a record label funds the recording session or the artist gives their sound recording right to a label, the label typically owns the sound recording for however long the label contract duration is.

The Chain of Licensing:

Distribution :

1. Sound Recording Owners “Artists or Labels” → Distributors. Artists or Labels license their recordings to Distributors (like Tiny House Music or DistroKid).
2. Distributors → DSPs. The distributors license the recordings to Digital Service Providers (DSPs) like Spotify, Apple Music, and YouTube to monetize the streams and sales.

Neighboring rights:

2. Sound Recording owners → Neighboring Rights societies . The Sound Recording owners license their recordings to societies aka Phonographic Societies (like SoundExchange).
3. Neighboring Rights societies→ music users. The Neighboring Rights societies license the rights of the recording itself (rather than the song) to users, ensuring the performers and label owners get paid when the track is played on digital radio.

Summary Table: Who Does What?

What is a “License”?

In this context, a License is a legal grant of permission. It does not transfer ownership; it simply gives the right to use the IP in exchange for a fee (royalties).