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Thomas Edison is famous for many things. The lightbulb. Direct current. Moving pictures. Electrocuting elephants. But in the music industry, his legacy is built on one thing — the first practical machine for recording sounds. Just as notation allowed compositions to become a commodity, Edison’s phonograph did the same for performances. Now, with the composition apparatus thoroughly in the hands of the publishers, the time was right for musical stars — and the record labels that made them.

The rise of the machines

As with all things, the development of the recording industry took time, and had some technological teething troubles. Strictly speaking, the phonograph wasn’t the first machine to play music — music boxes, barrel organs, and player pianos had that honor — but the first to be able to record a performance. All of the earlier versions of music machines played what was effectively sheet music, and didn’t impact the mechanics of the industry substantially. Recordings, however, opened up new avenues of promotion, marketing, and litigation. After all, was a recording of a performance covered by the copyright of the music? Was it a performance, an object, both, or something in between?

In the beginning, it was just a novelty, with recorded sound productions being little more than technological competitors to the heavy-hitting music halls. However, when Edison’s wax cylinder method was improved upon by Bell’s discs, the gramophone began to spread into private homes — and with it, a totally new music market.

What is a recording, anyway?

As when publishing created the need for copyrights to defend the publishers and artists, the dawn of the record industry created a need for copyright protection for recordings. However, the question remained about who owned the copyright. The owner of the music’s rights hadn’t recorded the song. The performer didn’t necessarily own the rights to the music, nor the recording equipment. What if it was a recording of a live performance?

Again, technology bred confusion, which paid lawyers, who litigated cases, which set precedent.

As defined by Merriam Webster

Copyright complications

Now that things were getting complicated, new concepts of music rights licensing emerged. The copyright holder remained owner of the original work, but specific rights could be licensed out for performance, modification, and recording.

This had the effect of effectively creating two layers of copyright, with one dependent upon the other. In somewhat simplified terms, to legally make a recording, the artist’s record label had to buy (or rent, depending on the terms) the license to perform and record the music. Once this was acquired, they could then record the music and sell the recordings. Depending on the terms of the licensing agreement, the record label may have to pay further money as royalties to the copyright holder.

Once recorded, any given song had at least two layers of copyright, maybe more. Making things more complex was that playing a recording in public was considered performance in its own right, and required paying royalties to the recording copyright owner, who would then pay royalties to the song copyright owner… in the simplest case. However, it could get far, far more complicated, and often did.

Getting the royal treatment

If two copyright holders and two layers of royalties is the simple version, let’s take a look at a complex one. First, let’s take a look at what a royalty actually is. As defined by Merriam Webster, a royalty is “a payment to an author or composer for each copy of a work sold or to an inventor for each item sold under a patent.” In practical terms, this is a fee granted to a rights holder in exchange for allowing another party to use and profit from those rights. For example, a music publisher who sells sheet music must compensate the composer for use of his/her intellectual property. Usually these royalties are levied as a percentage of the revenue or profit that the other party (in this example, the music publisher).”

While this model is relatively simplistic for, say, a book — book sells, publisher pays author, maybe illustrator — it can get almost comically complex in music. The royalty longtail on a performed song recording could look something like this: owner of the recording copyright, performers of the music, owner of the music copyright, composer of the music, lyricist. Each of these groups of people is entitled to a fractional amount of the fee paid to perform the music. It requires knowledge, accounting, and trust — after all, who knows where and when each piece is played, and how often?

By the early 20th century, the music industry was coming to grips with the situation — but then the paradigms moved again, because just as soon as recorded music had become part of the personal life of most of the world through the phonograph, it broke boundaries again, taking to the air and the new medium of wireless.

Curious to know more? Join our Discord and Telegram — Utopia Genesis.

We believe in unlocking the music industry’s full potential by unifying it all in one holistic space. We call it Utopia — Where music lives.

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