[metajack]

Music rights are split into two traditionally, the songwriting copyright and the mechanical reproduction right. Previous to the internet, media sales mostly went to the labels who held hte mechanical rights and songwriting copyright was earned directly to the artist. So if you bought a CD the label gets paid, if you play a song on the radio an artist gets paid.

The music industry lawyers were incredibly smart when they passed the DMCA back before online music was much at all, and got internet streaming defined as mechanical reproduction so they got dealt in on streaming.

ASCAP, BMI, and SESAC, et al, which give large blanket licenses to cover most copyrights for songs charged well known quantity for licenses, and early music streaming services paid those. Harry Fox (at least at the time) was the clearing house for mechanical rights and there was actually no set rate or anything. DMCA created a compulsory license that Harry FOx would have to give, but the rates were not known at the time, so everyone was getting VC funding without knowing what anything would cost.

That rate is probably much higher than the songwriting royalties, so the music industry has succeeding in getting ahold of most of the money in a new format that was poised to benefit the artists directly.

I guess we should just be glad it didn't happen like video streaming and there are actually rights clearing houses so companies like Spotify and others can make compelling streaming services with very large catalogs, unlike the city-state video steaming where you need 3-4 services combined to get access to most of the mainstream stuff.

[bogomipz]

>" Previous to the internet, media sales mostly went to the labels who held hte mechanical rights and songwriting copyright was earned directly to the artist."So if you bought a CD the label gets paid, if you play a song on the radio an artist gets paid.

This is not correct. Mechanical royalties have always belonged to the songwriter. A record label pays mechanicals to a songwriter's publishing company who then passes it on to the songwriter. When a record label sells a record that contains a song an artist owns the copyright to the record label must pay that songwriter a mechanical royalty. When that songs is played on the radio at least in the US the songwriter gets a performance royalty. The songwriter gets paid a royalty in both cases. The label as a mechanical license holder is obligated to pay out a mechanical royalty.

https://www.bmi.com/news/entry/Understanding_Mechanical_Roya...

[lukeh]

Perhaps the GP meant to identify the two rights as the right to reproduce the composition (mechanical) and the master right. The royalty on streaming services for the former is even smaller than the latter.

[rsstack]

Can you, or someone, share a source for the first paragraph? It completely changes my perception of music royalties and I'd like to be sure before I repeat it :)

[bogomipz]

You want to read up on music publishing as well as royalties[1][2]. It's important to understand both and it's hard to discuss one without the other. But basically if you understand the these two subject you will understand to a very large degree how the music business works. In the record label model of the music business a label advances you money to pay for your recording and advances you money to pay for your music's promotion(videos, tour support etc.) Before an artists sees a single cent of money from album sales they need to pay the label back all of the money the label advanced them. These advances are paid back via mechanical royalties. It is not until a label recoups every cent from the artist that the artist begins collecting royalties. This is how a lot of artists can sell a bunch of records and yet end up in debt to the record label. S

[1] https://soundcharts.com/blog/how-the-music-publishing-works

[2] https://soundcharts.com/blog/music-royalties

[bzbarsky]

https://www.royaltyexchange.com/blog/mechanical-royalties seems like a decent explanation, though I'm not an expert in this area...