Copyright law as it relates to music is somewhat complex, and the issues that arise vary depending upon the role a business plays in the music industry. From the most basic level, it should be understood that any song consists of two copyright rights; copyright rights in the composition, and copyright rights in the sound recording. The former has been available as long as copyright law has, whereas the latter has generally been available on the federal level only since 1972. Furthermore, these rights are more often than not licensed separately; artists tend to retain the composition rights, whereas labels normally retain rights in the sound recording.

Sound recording rights retained by a record label afford a number of different types of rights, including the right to record or copy a work, the right to distribute a work, and the right to public and digital performance of a work. Within those categories there are still additional sub-types, some of which are subject to compulsory licensing schemes, and others which are not. A license is in fact a permission granted by the holder of the right to the licensee, and in effect this means that the holder of a copyright may choose not to license his or her rights. However, the mechanical compulsory licensing scheme under the Copyright Act requires that licensees be allowed to publish a work once the author has exercised his or her exclusive right of first publication, at which point the mechanical licensing scheme kicks in, and conveys the rights to record and distribute compositions on various kinds of recordable media, e.g. CDs, as well as digital music at rates set by statute. Recently, the U.S. Copyright Office decided upon the rates for mechanical licenses for digital distribution. Compulsory licensing schemes also exist under U.S. Copyright Law with respect to non-dramatic musical compositions, public broadcasts, cable system retransmission, subscription digital audio transmission, and non-subscription digital audio transmission, i.e. Internet radio. In fact, many point to compulsory licensing as one reason for the low profitability of Internet radio.

Synchronization rights on the other hand, or the rights to use a recording of a musical composition in a motion picture, TV program, commercial, music video or other audio-visual work, are not subject to a compulsory license, and are typically licensed separately by artists or labels. Rights to public performance usually materialize in the form of broadcast or in the form of live performances at clubs or other venues. This is not to say that payment is extended for every individual performance or play; rather, performing rights societies receive blanket fees or negotiated rates from distributors in return for unlimited “performances” or plays, and those revenues are passed on in part to the authors of the works performed.

One should also be aware of the state legal rights associated with music recordings, which in some cases pre-date their federal counterparts and can serve as alternatives when certain federal pre-requisites have not been met. Most states recognize common law copyright rights, which have been relied upon frequently in the past, particularly with respect to pre-1972 sound recordings, as well as “Unauthorized Duplication Statutes,” preventing the sale of unauthorized copies.