Recording Artists & Record Companies

Recording Artists and record companies derive their income from the sale of records either in their physical form or by digital downloads where a user on the web pays to download a song.

In addition to receiving their royalties from the sale of the records both the record company and the performing artist are entitled to receive performance income sometimes known as neighbouring rights.

When a performing artist records a musical work a new copyright is created, and these rights have attached to them both moral rights and exploitation rights that last for 50 years.

Performing artists are individual holders of neighbouring rights and these rights are legally recognised in those countries that have signed up to the Rome Convention Treaty. 

In addition to those countries the United States of America has now created neighbouring rights under the Digital Millennium Copyright Act in respect of digital transmissions (not analogue) and this source of income is beginning to grow and grow.

This means that every time a record is played on television, radio, a public arena, etc. the artist and usually the record company are entitled to share this performance income. In America it is collected by Sound Exchange and in the UK by PPL with collection societies throughout the world.

Very often artists and small record labels do not know of all the societies or how to go about collecting this source of income and this is a function that Music Royalty Investigations can carry out on behalf of artists and record labels.

A lot of disputes are a matter of interpretation of the agreement or the input of incorrect data and can be quickly resolved.

Some examples are processing returns and not all the sales, sharing video performance income, paying own overseas subsidiaries too high a fee for their services or licensing them at beneficial rates, what expenses are recoupable, controlled composition clauses and the list goes on, sharing the performance income between the artist/record label and sub licensee which the record company or their licensee collects in overseas territories as very often the performer or the UK label cannot collect and it has to be collected by their licensee in that territory. What about a packaging deduction when the label does not incur the cost of packaging on say 3rd party compilation?

The list is endless, but particular care must also be exercised before a contract is signed as you may turn out to be the biggest UK act in America with audit rights on the UK record company and not their American associates who are selling all your records. The same applies to record labels signing licensing deals.

As can be seen, this is a very complex and time consuming exercise to undertake but with the right help and guidance Music Royalty Investigations and our input both before signing a contract and after a contract has been signed, a monitoring programme can be instituted to ensure that you receive all the royalties that you are due and you have all the safeguards built into your contracts that you will need. 

If a royalty audit then becomes necessary this can take place swiftly and the area of examination can be finely pinpointed.

Back to top