The term “owning your masters” has become so popularized on social media in the last couple of years that it has raised questions for most people that are not well versed with how the business side of music actually works.
Do producers own masters? the answer is, Yes they do.
Producers own masters to compositions that they originally compose from scratch. An artist that acquires the rights to use the composition for a song will own the copyright to the lyrics. The ownership of the song then falls on both the producer and artist because they are both responsible for writing it. Ownership of masters will usually be split 50-50 between artist and producer, depending on the original agreement.
Before we dig deep into this topic, let’s zoom out a little,
You may be wondering what owning your masters actually means.
So what are the masters of a recording?
The masters of a recording to put it simply, are the original recording of a song from which everything else stems from.
This is the official recording and the source with which copies can later be made.
What does owning your masters mean?
All jargon aside, you can think of masters as the underlying rights to a song.
so owning your masters simply means having control of the song and you get decide what can be done with it.
Which essentially means you own it or part of it in situations where you own 50% of the master.
Therefore it would mean that you would be the one to grant permissions to people to use it in soundtracks, songs, background music etc.
You also assume full control of every stream and any other duplication.
Therefore what this essentially means is that the financial gains of said record belong to you as the owner of the rights of the song.
Do producers own masters?
We can now dig deeper and answer this question thoroughly.
Producers owning masters depends in the capacity with in which they operate,
which depends on whether they are signed to a label or are acting independently.
If the producer isn’t signed to any label, they own and control 100% of the masters of an original composition they create.
For example if I produce an original beat fully, it means I own the masters of that composition,
which then gives me the full rights to either sell that particular beat and return a portion (usually 50%) of the master ownership when the artist develops the beat into a song.
in a situation where a producer is signed to a label they will have a contract with the label that almost always splits ownership of the masters between the producer, artist and the label.
Sometimes the label will choose to cut both the artist and the producer off by not letting them have any ownership of the master recording at all.
Therefore a situation that has a producer not owning masters is always a possibility,
part ownership of masters is always something that can be brought to the table and negotiated.
Ownership of masters Grant’s the producer the rights to get paid a percentage of sales/revenue that song may generate.
the usual agreements in this case have producers choosing whether they would like to be paid a flat one off fee for their ownership of masters or they would like a back end deal.
In the case of a flat fee, the producer would get a one time fee and not get any other revenue after that because they would have simply sold the exclusive rights to their composition.
A flat fee is a like a once off payment that the producer would charge for their percentage or portion or ownership of a record.
a back end deal on the other hand,
would have the producer receive a share of the sales of the record.
A back end deal is sometimes referred to as points.
it is important to realise that a flat fee would have the producer receive one payment and move on and not receive anything further.
with a back end deal, the producer will have share in the sales revenue of the song, usually after receiving an upfront fee.
In a situation where the producer is trying to help out or render assistance to an indie artist, they sometimes will not even charge the upfront fee,
but they’ll rather produce the record and then agree on “points”,
that would then provide a percentage of sales that the producer would get.
the world of contracts, points, flat fees, back end deals , can get very complicated that is why it is very vital that you seek the right legal counsel to avoid any problems.
You need someone that can negotiate on your behalf and have your best interests at heart,
A person that can read the fine print and make sure all the necessary details are included in the paperwork.
Why do record companies own masters?
this has been almost a tradition in the music industry, going back as early as the 70s, record labels usually own their artists masters.
record labels do this for the particular advantage that it puts them at.
if they own the artists masters, it means they stand to gain from the intellectual property
financially they are able to stipulate the percentage that they’ll peel away from the artists revenue.
the artist relies on a record label to be it’s sort of agency,
an agency that has the final say on the artists work,
responsible for identifying opportunity for the artist and standing in between that opportunity as the middle man that can negotiate on behalf of the artist.
record labels structure these artists deals, in a way that makes them own the artist’s masters of all songs that are recorded.
in exchange for the masters, the record labels usually give the artist an advance or an agreed upon percentage on royalties.
usually these royalties only start going to the artist after they have earned back their advance,
only in this situation would the record label agree to start remitting royalties to the artist.
that is why it is so important that an artist own their matters.
you’ve heard that the term often enough and I hope this post helps you to understand the workings of masters.
Can I use a free beat for profit?
The extent to which a beat is “free” will greatly vary.
that’s why the first you should figure out is the extent to which the producer of the beat deems his content free.
usually they’ll specify as to whether a beat is free for profit and commercial use,
or free but limited to non profit use,
most of the time the producer will require a person to purchase a non exclusive license from them, that
means the beat will be given to the person,
but will still be available for sell to other people that would wish to acquire another non exclusive license or exclusive license.
with that said, it is always a good idea to reach out to the producer offering the “free-beat” and ask them the terms and conditions and the capacity in which the term “free” is used
Why is owning your masters important?
owning your masters guarantees that you can create and release songs anytime with whichever method you so wish.
it guarantees you control over your records which is great because that’s your intellectual property.
you decide how the financial side of the record will be, since you have complete control.
rather than signing your masters away to a record label that will in turn want to control you to their own benefit.
the term “owning your masters” has become so popularised partly because artists in this era have now gained the business acumen necessary to understand the inner workings of the music business.
now artists know that their intellectual property should be theirs,
a prime example of people who have stayed independent and made alot of money by owning their masters without the help of record label is the rapper Russ.
if you take time to listen to Russ, in his interviews you’ll understand why he is one of the most successful artist of our generation.
you can use his insight to make a road map for yourself.
granted a record label may give you an advance that would make giving away/signing away your intellectual property seem like the right thing to do,
but the truth of the fact is, they only do so because financially it puts them in a better position than you.
what percentage does a record label take?
this is a frequently asked question by most artists that are looking to weigh their options.
in most cases, it all comes down to the agreement that the artist establishes with the label.
an artist that is in a better position to negotiate, will often have a better chance of keeping a sustainable part of their revenue generated.
in cases where the artist is in a disadvantageous position, and willing to get a little money for their survival,
the record label will stand to hold a larger percentage of the artists masters.
in extreme cases even 80% of the masters.
in better cases the record label would agree on a 50-50 split