Entertainment Law Series, Vol. 4 - The On-Going Fight Over Masters
Updated: Dec 16, 2020
By Rolanzo White, Esq. & Arjit Roshan
For those who follow music, it is hard to miss the on-going dispute between artists and record companies regarding their "masters." In music, there are two types of rights in a "song." First is the composition. The composition is the music notes and lyrics that define a song. The rights to the composition are usually owned by the composer or their publisher.
The "master” is the original recorded performance of the composition (song). The rights to the recording are usually owned by the artist or their record label. The owner(s) of the master recordings have significant bargaining power because they have creative control over the content; and are free to sell or distribute the song with autonomy.
Knowing the value of the master recording, most record labels invest in an artist in order to own the masters produced, or at least to hold an exclusive license to exploit the master. Traditionally, record labels would sign an artist, pay them an advance, and invest in their music career by getting them in the studio, helping book shows, shoot music videos, and find opportunities to sell the artist's music. In exchange, an artist would assign their rights in the recorded songs to the record label.
These agreements give the artist the freedom to create music without having to worry about money and management, and, if the record company retains control the artist's master recordings, they get to reap the rewards if the artist turns out to be a star.
If the artist does not become successful, the record label will not be able to get the return on investment they expected, because the value of the masters will be little to nothing. However, when an artist becomes successful, the artist's master recordings becomes extremely valuable intellectual property for the company. However, this is where the artist and their label can clash as the value of the master recording becomes significantly more valuable than what the artist earned/earns under the original agreement..
We have seen this play out several times. In September 2020, the Hip Hop Titan, Kanye West, went on one of his famous twitter rants, this time taking aim at his record label, Universal Studios, regarding his masters.
When a record company owns an artist's master recording, they usually have the right to sell the masters as well. Taylor Swift was famously outraged when the masters of her first six albums were acquired by Scooter Braun, with whom she had a contentious personal relationship characterized by “manipulative bullying.”
On Taylor's blog, she states that:
"When I left my masters in Scott’s hands, I made peace with the fact that eventually he would sell them. Never in my worst nightmares did I imagine the buyer would be Scooter. Any time Scott Borchetta has heard the words ‘Scooter Braun’ escape my lips, it was when I was either crying or trying not to. He knew what he was doing; they both did. Controlling a woman who didn’t want to be associated with them. In perpetuity. That means forever.
Thankfully, I am now signed to a label that believes I should own anything I create. Thankfully, I left my past in Scott’s hands and not my future. And hopefully, young artists or kids with musical dreams will read this and learn about how to better protect themselves in a negotiation. You deserve to own the art you make. I will always be proud of my past work. But for a healthier option, Lover will be out August 23."
Prince famously changed his name after a high-profile dispute with Warner Bros., calling himself a “slave” to the label. Warner Bros. withheld hundreds of his songs from the market, against his wishes. It wasn’t until 2014 that he bought back his catalog in a landmark deal.
Aside from ownership of masters, record deals can also present other creative, financial and personal challenges to artists.
Lil Wayne's 2018 album, Tha Carter V, was infamously delayed for seven years due to a protracted interpersonal conflict between him and Birdman, the head of Cash Money Records.
The common theme between the above stated examples, is that these artists are some of the most famous musicians to have ever lived. The catalogs of Kanye West, Taylor Swift, Prince, and Lil Wayne are worth millions. The catalogs of smaller artist may never even be worth their recording contract.
Artists and Record Labels have differing goals, but their interests do intersect at points. For example, both parties want to produce amazing music as the success of the music is mutually beneficial. Also, the artist benefits greatly when the label successfully exploits the music for profit. However, when an artist becomes successful and business suave, the role of the record label becomes less valuable.
These agreements are heavily shaped by who has more power at the negotiating table. Big record labels have strong negotiating power when dealing with smaller artists, so the smaller artist may have to relinquish more ownership rights to the record label.
However, in order for a record label to have any kind of agreement with a big artist today, they will need to get creative, as these artist have no incentive to sell their masters. In fact, many top artists are embracing new relationships with labels or going independent altogether. In 2016, Frank Ocean released Endless to fulfill his contractual obligations to Universal Music so that he could release his magnum opus, Blond, independently.
In Taylor Swift’s new deal with Universal Music Group, she is guaranteed a slice of Spotify equity and full ownership of her masters moving forward. Although her first six albums are owned by Scooter Braun, she will own all the masters of her latest albums Lover and Folklore.
Chance the Rapper famously released his seminal work, Acid Rap, completely for free with no label, opting for revenue through merchandise and live performance. Kanye West recently committed to returning the masters of artists he had signed on his label, G.O.O.D. Music.
Many of the artists we see fighting protracted legal battles with their labels may have benefitted from alternate arrangements, but too often they sign these contracts when they’re young, naïve and impatient.
Regardless of whether you are a growing record label or an aspiring artist, WRO Law and Strategy LLC is poised to guide you through the contracting process to ensure your goals are met.
Send me an email at Rolanzo@wro-law.com if you have any questions or issues you think I could help with.