Two Separate Works, Two Sets of Rights
Every song that gets distributed has two distinct intellectual property components, each carrying its own rights structure:
- The Composition — The melody and lyrics, owned by the songwriter(s) and their publisher(s).
- The Sound Recording (Master) — The specific recorded version, owned by the recording artist or the label that funded the recording.
Royalties flow separately to each rights holder.
The Rights Flow: Step by Step
Step 1: Creation
- Songwriter writes the song → owns composition rights
- Artist records the song → recording rights vest in the recording party (often the label)
Step 2: Registration
- Composition registered with PRO (ASCAP/BMI/PRS/SACEM) → enables performance royalty collection
- Sound recording registered with neighbouring rights society (SoundExchange/PPL) → enables master recording royalty collection
- ISRC assigned to the recording → unique identifier for the specific version
- UPC assigned to the release → identifies the commercial product
Step 3: Distribution
- Distributor (ToneGrid) ingests the release using DDEX ERN
- DSPs receive the recording files and metadata
- DSPs license the composition from the relevant music rights body (MLC in the US, MCPS in the UK)
Step 4: A Stream Happens
- DSP logs the stream
- DSP pays the distributor for the master recording (typically 70–80% of the per-stream value)
- DSP pays the mechanical licensing body for the composition (remaining ~20–30%)
Step 5: Distribution
- Distributor pays the record label/artist their share of the master recording royalty (per their agreement)
- PRO pays the songwriter(s) their share of the performance royalty
- Mechanical licensing body pays the publisher(s) their share of the mechanical royalty
Example: A Typical Independent Release
Assume a stream generates $0.004.
| Rights Type | Amount | Who Gets It |
|---|---|---|
| Master recording (70%) | $0.0028 | Label → Artist split |
| Mechanical royalty (14%) | $0.00056 | Publisher → Songwriter split |
| Performance royalty (16%) | $0.00064 | PRO → Songwriter split |
Note: The label-artist split on the master is determined by your recording contract — commonly between 15% (new artist) and 50% (established artist) of net receipts.