The “Two Sides” of Music Licensing (Flowchart)
What This Chart Shows — A Quick Guide for Artists
As a musician, your work exists in two legally separate copyrights: the composition (the music and lyrics) and the sound recording (any specific recorded performance of the composition). Both can generate income from licences, but they flow through entirely different systems: negotiated licences and tariffed licences. This chart maps both kinds of licensing.
The left side of the chart follows the revenue from the composition. If you have a music publisher, they will administer your composition rights on your behalf. Among the types of sales and licensing income your composition can earn, two main kinds tend to be licensed by collective societies: “mechanical royalties” (paid whenever your composition is reproduced — on a CD, download, or during many kinds of streaming), collected by CMRRA and/or SOCAN RR, and “performing rights royalties” (paid whenever your composition is played publicly or broadcast), collected through SOCAN. If you self-publish, you can collect both the author’s (i.e., composer’s and lyricist’s) and publisher’s shares of these royalties yourself.
The right side follows the revenue from a recording of the composition. If you are signed to a label (i.e., a record company), the record company typically holds the rights in your “master recording” and licenses its use to others. The master recording is the official sound recording of the composition that can then be licensed. If you own your master recording, you can choose to license these rights yourself and you can choose to use the assistance of a collective. If you contract with a record company, you can negotiate a share of royalties from the record company.
Among the many kinds of sales and licensing income your recording can earn, two main types tend to be licensed by collective societies: reproduction royalties for uses like streaming and background music, collected by Connect or Panorama, and neighbouring and public performance rights royalties for certain public uses of your recording, collected by Re:Sound. In the case of most reproduction royalties, your share of revenue is paid to you either directly or through the record company, if you have one. In the case of neighbouring and public performance rights royalties, your share is collected by Re:Sound and often split 50/50 between your record company (as maker of the recording) and you, as the performer. If you own the master recording, you may be able to negotiate with the record company for a share of the maker’s 50%. If you own the master recording as an independent label and have not otherwise contracted with a record company, then you can collect the maker’s share of this royalty directly from Re:Sound or through a membership in Panorama. The performer’s share can be collected directly from Re:Sound or through a membership in ACTRA-RACS or Aristi. If you are not the only performer, this 50% performers’ share is generally shared among the performers.
To receive payments from a collective society, you first have to register for a membership with that society (if you are eligible) and register each work in which you have a right to collect a share of licensing income.
A key takeaway: a single stream of your music on a platform like Spotify triggers royalty obligations on both sides of this chart simultaneously — for your composition and for your recording — through different collectives and different agreements. Understanding both sides ensures you are not leaving money uncollected.
