3. Getting Paid For Your Music Online – Digital Music Rights

Digital song files embody the same rights that songs on physical media do:

1. a musical work copyright for the composers of a particular song or piece of music


2. a sound recording copyright that covers the specific recording of a composition and the creative work of those involved in that recording.

Composition copyrights are traditionally administered and distributed by publishing companies for mechanical and synchronization rights, and by performing rights organizations like ASCAP and BMI for radio and other public performances. The sound recording rights are usually owned by the record labels that fund and release the music or by the artists themselves.

The licenses for sound recordings in most digital settings are exclusive and voluntary, meaning that the creators of the recording must explicitly grant another party the right to deliver their work. The exception is non-interactive radio, which is treated much like traditional radio with the exception that the sound recording rightsholder is also paid a royalty for each transmission. Aside from this exception, anyone offering music on the Internet must get permission to use that music from the people who created it. The RIAA site provides a good description of what uses require what licenses.

Types of Digital Rights

1. Unrestricted download – The basic and well-known delivery of an encoded, compressed copy of a sound recording, these downloads (in formats such as mp3, Windows Media Audio, etc.) are generally easy to use with a wide array of freely available computer players or portable digital music players. They're ubiquitous, permanent, and can be freely moved around and copied, lacking any control mechanisms for tracking ownership and file trading. The quality of the audio is usually good but not quite CD level (though many services consider 128kbps encoding "CD Quality"), and the user must wait for the file to download to the local computer before listening to it. These are typically sold in pay-per-download stores that do not carry major-label music (such as EMusic or Audio Lunchbox).

2. CD burn – this type of delivery enables the user to make a copy of a downloaded file to a recordable CD, enabling users to take the music anywhere (or even rip the music back off the CD into another portable format). CDs burned from downloads sound inferior to store-bought CDs to some, as compression degrades audio fidelity. Rhapsody offers CD burning options as part of their service.

3. Restricted download –; These downloads include DRM (Digital Rights Management) Technologies that place restrictions on copying the file. Typically, restrictions involve the number of computers, digital music players, or simply the number of times a file can be copied. They usually do not restrict the user in terms of CD burning. In terms of sound quality and download wait time, there is virtually no difference from typical mp3s. Apple iTunes, Napster, Real and most download stores with major label content put this DRM on their files. There are a number of DRM technologies, with varying degrees of limitation; these translate to different rights and license rates.

4. Tethered download – A type of delivery similar to renting, with users having access to the file for a limited amount of time. The limits are enabled by various DRM technologies that track information such as where files are moved to and how many times they are used. Again, the quality is usually the same as mp3 or other common download formats, as is the download wait-time. Services such as Napster and MusicNet offer this type of download. Microsoft is currently toying with this idea as well.

5. On-demand interactive streaming – streaming delivery of music over the network "on-demand," or when the user requests it. Most services advertise "CD-quality sound" and there is typically no download wait-time — the music begins playing immediately after the user clicks (although bandwidth and network limitations may affect this). On-demand streams are available from services such as Rhapsody, MusicMatch, and Napster.

6. Interactive radio – streaming delivery of music over the network like traditional radio, but allowing the user the ability to skip songs or rate tracks and artists to influence the experience. No download time or wait for access with quality ranging from lo-fi to "CD-quality" depending on bandwidth limitations. Can be subscription or non-subscription offerings, and separate licenses that address the specific features and value provided by each product are required.

7. Non-interactive radio (compulsory license) – streamed delivery of songs over a network strictly adhering to radio programming rules. The DMCA (Digital Millennium Copyright Act) created a compulsory (or statutory) license that allows webcasters that meet certain conditions to broadcast non-interactive radio stations without obtaining an explicit license from rightsholders. The Library of Congress arbitrated and set rates for these webcasters through negotiations with the RIAA and the webcasting community, and millions of dollars have been paid to rightsholders for these licenses. Sound Exchange is the organization appointed by Congress to collect and distribute these royalties to rightsholders.

8. Other non-interactive radio – radio services that don't meet the DMCA compulsory license requirements for a variety of reasons, such as radio stations that promote or advertise a product or brand. Separate licenses to address the specific features and value for each product or service are required.

The above rights also apply to a number of other digital delivery mediums, such as wireless, satellite, and cable.

Because there are no standard rates for these voluntary rights there's a huge amount of work that must be done by services and rightsholders to reach the licensing agreements necessary to make the music available.

Continue: What This All Means For Independents