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Compositions vs Masters: What's the difference?

Compositions vs Masters: What's the difference?

If you're investing in music royalties, it’s important to understand that Master rights are different from Composition rights and, as a result, the royalties associated with each flow through different paths before reaching you as an investor.

What type of royalties will I receive from a Composition rights and how do they flow to me?
What type of royalties will I receive from a Composition rights and how do they flow to me?
What are Composition right royalties?
Royalties associated with compositions are tied to the songwriting – melody, lyrics, and arrangement. These are earned by songwriters and publishers.

Revenue sources include:
  1. Streaming (Spotify, Apple Music, etc.)
  2. Physical sales (vinyl, cds, etc.)
  3. Licenses for film/TV/ads (aka 'Synch')
  4. Radio spins
  5. Live performances

Royalty flow:
  • Royalties are primarily collected by collective management organizations (CMOs), such as The MLC, ASCAP and BMI.
  • The CMOs pay those royalties to publishing/admin companies, as well as directly to songwriters.
  • The publishing/admin companies pay Musicow.
  • Musicow then distributes them to investors on its platform.
What type of royalties will I receive from a Master rights and how do they flow to me?
What type of royalties will I receive from a Master rights and how do they flow to me?
What are Master right royalties?
Royalties associated with Masters relate to the sound recording – the performance of a composition captured on a record/digital file. These are earned by artists and labels.

Revenue Sources Include:
  1. Streaming
  2. Physical sales
  3. Synch
  4. Digital performance (e.g. SiriusXM)

Royalty flow:
  • Royalties are collected by labels and SoundExchange (for digital performance).
  • These are passed to Musicow.
  • Musicow distributes them to investors.