Music Rights and Royalties

The performance and reproduction of music is subject to various rights and royalties. On this page, you will find a brief information package on the main rights and royalties related to music.

Performing rights and reproduction rights

There are different rights associated with music, which can be roughly divided into two main categories: performing rights related to the public performance of music and reproduction rights related to the recording of music. Reproduction rights include

Mechanisation rights related to the recording of music on a physical or digital commercial recording
Synchronisation rights related to the incorporation of music in moving images and the production of video recording, such as for a video, a TV programme, an advertisement or a film

Performing right royalties and reproduction royalties

The rights needed to publicly perform music, transmit it to an audience, or record it can be obtained by acquiring the appropriate licence to use the music. As a rule, compensation is also paid to the music rightholders for the use of their music. A performing right royalty is paid for music performing rights, a reproduction royalty or mechanisation royalty is paid for recording music on commercial recordings and a synchronisation royalty is paid for synchronising music with moving images.

Different rights are administered by different operators, which also invoice the royalties paid for them. More information about both rights and the operators who administer them can be found in the following sections.

Copyright and related rights

Performing and reproduction rights apply to music authors, music publishers, music performers and phonogram producers, but the rights are different and associated with different things.

Music authors, composers, lyricists as well as arrangers and translators, have copyright to musical works: compositions, lyrics, arrangements and translations.

Music performers, singers, musicians and conductors, as well as phonogram producers, have so-called related rights that protect the musical work’s master recording and its copies. Related rights are also known as neighbouring rights, recording rights and master rights.

For the sake of clarity, the term recording right is used hereinafter for related, neighbouring, recording or master rights, the term recording is used for audio recordings and the term phonogram producer refers to the record company, unless stated otherwise.

What is the difference between copyright and related rights?

Playing or recording music always involves copyright. Therefore, a licence from music authors is needed and they are paid royalties for the use of music whenever music is

performed live publicly at a gig, concert or other event
played publicly, e.g. as background music in different customer premises
recorded on a commercial recording (mechanised and copied)
incorporated in moving images (synchronised)
transmitted to the audience on radio or TV or in streaming services, for example

Related rights do not include copyright to the musical work but only to a specific recording of the work and the playing of the recording in question. Therefore, a licence from music performers and phonogram producers is not needed when music is performed live and music performers and phonogram producers do not receive royalties for live performances.

However, a licence from music performers and phonogram producers is needed and they are paid royalties for the use of music whenever recorded music is

played publicly
incorporated in moving images
transmitted to the audience on radio or TV or in streaming services

A licence from performers and phonogram producers is needed and they are paid royalties also if new copies are made of an existing recording.

Music released as a physical and/or digital recording is subject to both copyright and recording rights. The recording right arises when the work is recorded on a recording.

Examples of physical recordings are CDs, vinyls and C-cassettes. Digital recordings include audio files used in streaming services.

The process of recording music on a commercial audio medium is called mechanisation

The making of a sound recording for commercial use, i.e. the economic production, is called music mechanisation. In most cases, the phonogram producer and the publisher of the recording is a record label, but the phonogram producer can also be the musician themself, in which case the recording is referred to as a self-published work.

Rights and remuneration of the musical work and its authors

A phonogram producer needs the mechanisation rights, i.e. the music authors’ permission to make a recording. The producer also pays the music authors a mechanisation fee for the making and copying of the master recording.

Rights and remuneration of music performers

The performers’ mechanisation rights and reproduction royalties for the master recording and the copies made from it are usually agreed in the recording contract.

If someone other than the economic producer of the original recording makes physical or digital copies of the recording, they must acquire the mechanical rights of both the authors and the performers and phonogram producers and pay remuneration to all of them. Such copies are made, for example, by Spotify for its own platform or by radio stations for their own broadcasts.

When a recording is publicly performed or the music on it is broadcast to the public, for example on radio or television, performance royalties are paid to the authors, performers and producers for the performance of the music on the recording.

Music released as a physical and/or digital image recording, such as a video, film, TV series or advertisement, also carries both copyright and recording rights.

Physical visual recordings include for example DVDs, Bluray discs, VHS tapes. Digital recordings are for example files used in streaming services.

If music is incorporated into a moving image, i.e. synchronised from a separate sound recording onto a video recording, mechanisation rights of both the music authors and the artists performing on the recording and the economic producer are required and a synchronisation fee must be paid.

When a video recording is publicly performed or the music on it is broadcast to the public, for example on radio or television, the performance of the music on the video recording is subject to a performance royalty paid to the music authors.

Performers and producers of recordings are not separately paid performance royalties at this stage, because after synchronisation it is a video recording and not an audio recording.

Rights are either moral or economic

Economic rights include the work’s performing rights, reproduction, or mechanisation, rights and synchronisation rights required for the musical work

to be performed or shown publicly
to be transmitted or distributed to the audience
to be copied, reproduced, duplicated and printed

Moral rights include

the right of paternity, i.e. the right to be mentioned as the author of the work when the work is used
the right of integrity, i.e. no one is allowed to alter the work in a manner that violates the artistic value of the author’s work by modifying the composition or the lyrics

Who administers different rights?

Moral rights are always held by authors and performers themselves and cannot be handed over to others. As for economic rights, authors and performers may, by agreement, assign them to another party for administration or sell them in their entirety.

Authors and performers often assign their economic rights to a copyright organisation for administration so that they can concentrate on their own creative work. The rights are assigned by signing a membership agreement with the copyright organisation in question, whereby the author and/or the performer authorises the organisation to represent their rights by granting licences to use the works and invoicing royalties for their use. The organisations distribute the music use royalties collected by them to their members.

TEOSTO AND ITS PARTNERS NCB AND ICE

In Finland, the performing rights of musical works and their authors are mostly administered by Teosto. Teosto sells licences for performing musical works, invoices performing right royalties and distributes them to the authors of the music performed.

With regard to physical recordings, the mechanisation rights of musical works are mostly administered by Nordisk Copyright Bureau NCB, which licenses the mechanisation of music and invoices and distributes the mechanisation royalties, which are then paid to the music authors as part of Teosto’s distributions.

For digital audio recordings used in international online services, the mechanisation rights are administered by ICE, which licenses the mechanisation of music. ICE royalties are also paid as part of Teosto’s distribution.

The administration of synchronisation rights depends on the type of AV production or video recording for which the music is being recorded. For example, with regard to TV programme content, the rights related to music synchronisation are mostly administered by NCB, which licenses the synchronisation of music and invoices and distributes the synchronisation royalties, which are then paid to the music authors as part of Teosto’s distribution.

With regard to internet and social media videos, the synchronisation rights are administered by Teosto and, with regard to advertisements or other commercial use or use as an identifier, by the music author themselves or their publisher.

When a music author has become a Teosto member, the services of NCB and its international partners as well as ICE are also available to them as part of Teosto’s membership agreement. Teosto and NCB also have reciprocal representation agreements with similar organisations in other countries. As a Teosto member, you get almost global protection for the performance and recording of your works.

However, Teosto and NCB do not always administer all the economic rights of their members: some of the rights of music authors can be administered by music authors themselves or their music publishers.

MUSIC AUTHOR AND MUSIC PUBLISHER

If the music author is not a member of any copyright organisation or self-administers their music, they are responsible for the rights and royalties related to the performance and recording of their music. In this case, the music author prices and sells the rights and invoices the royalties.

If the music author has signed a publishing agreement with a music publisher, they may also have assigned some of their economic rights to the publisher’s administration. In this case, the licence to use the rights administered by the publisher must be obtained from the publisher. Publishers also price and invoice the rights administered by them.

Most often, rights administered by the author or their publisher are synchronisation rights and mechanisation rights.

Many publishers have cooperation agreements with foreign music publishers, which is called sub-publishing. Music publishers are also Teosto members and Teosto also pays royalties to them for the works they have published. You can find more information about music publishers on the Finnish Music Publishers Association’s website.

GRAMEX AND PHONOGRAM PRODUCER

The performing rights of recordings, artist performing on recordings and phonogram producers are mostly administered by Gramex. Gramex sells licences for playing music from recordings, invoices performing right royalties and distributes them to the performers and phonogram producers.

Instead of Gramex, recording rights can also be administered by the financial producer of the recording in question, which is usually the record company. In this case, the licence to use the recording must be obtained from the record company, which also prices and invoices the right to use the recording. You can find more detailed information about the rights related to recordings and their administration on Gramex’s website.

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