The chances are, when you listen to a three and a half minute track from your favourite artist, your reckoning is that the singer and his record label earn all the income from the exploitation of the music. However, the musical “work” you listen to is an embodiment of the musical composition (lyrics and melody) as well as the sound recording (the final, mixed track released by the label). Both the composition and the sound recording are eligible for separate and distinct copyright protections and you may want to check out Copyright 101 for copyright fundamentals.
Typically, when a musician is signed on to a label, the agreement between the musician and the label is for the label to own the masters, either in perpetuity (ie forever) or for a limited time, after which ownership is transferred to the musician. Simple enough, so far, right?
However, the label typically does not own the underlying composition in the masters, unless the agreement suggests otherwise, or unless the music was composed by a songwriter hired by the label for this purpose. Copyright in the composition usually remains with the composer. Thus, if the musician is also a songwriter, while the label would own the copyright in the sound recording (i.e. what we hear on radio, or Spinlet, or iTunes) the copyright in the composition vests in the musician.
A musician under contract, would not be able to publish (i.e. release) any sound recordings not authorised by the label. That would be a breach of contract. Practical examples of this exist throughout music history, where musicians have complained that the label is stifling them creatively, and have pushed for creative control (see The Jackson 5, The Beatles, Prince, George Michael). However, if the musician is not under contract, what do you think his rights are with regard to making a different sound recording of his lyrics and melody?
That’s right. If he doesn’t publish the masters owned by the label but rather makes a different sound recording of his music and lyrics, no copyright is breached and nothing is due to the ex-label.
However, song writing is a complex affair and in the absence of a contract agreeing revenue splits, everyone who collaborates on the composition, however minimally, is entitled to an equal share of the song-writing credits and revenue. Furthermore, once the collaborated work is “fixed in a medium” (again, see Copyright 101), copyright is jointly owned by the collaborators and any modifications to the original work without the permission of all the co-owners would infringe on their copyright.
To reduce the likelihood of disputes over ownership and copyright, it is best that collaborators quantify their respective contributions to musical works and agree on revenue splits as early as possible in the creative process.