What do musicians mean when they talk about their ‘masters’?

Last week, over a long series of tweets, Kanye West shared his recording contracts with Roc-A-Fella, Def Jam Recordings, and Universal Music Group with the world, claiming that he wanted to “change the music industry for good”. He spoke out against Universal Music Group, who acquired Roc-A-Fella in 2004 and released his first six albums, and said that he would do “everything in my legal power and use my voice until all artist contracts are changed starting with getting my masters for my children”.

It’s hardly the first time that the subject of ‘masters’ has been in the music press. Last year, two stories put the subject in the spotlight: in June a report into a historic fire at Universal Studios drew attention to the loss of masters for legendary artists like Nirvana and Aretha Franklin, and in July, Taylor Swift spoke out about Scooter Braun’s acquisition of her masters.

The topic of masters often been controversial, particularly among Black artists. Kanye West described certain record industry practises as “modern day slavery”, echoing Prince’s famous comments he gave to a Rolling Stone journalist in 1996: “If you don’t own your masters, your master owns you.” West seems keen to practise what he preaches – yesterday, he announced that he’d be returning the 50 per cent stake he holds in all of G.O.O.D. Music’s artists’ masters, news that was welcomed by signees Big Sean and 070 Shake. 

And yet while this is an issue that clearly matters a great deal to so many musicians, including A-list stars, for a casual music fan who’s not familiar with the ins and outs of the record industry, it can all seem a little impenetrable. What even are masters, anyway? To help us understand, we spoke to lawyer Victoria Wood, a partner in Statham Gill Davies’ Music, Media and Entertainment departments, to get her insight into what masters are, why they’re important, and what up-and-coming musicians need to look out for when signing record contracts of their own.

What do artists mean when they talk about their “masters”?

Victoria Wood: Masters, or “master recordings”, are, in the music business, the original recording(s) of a performance/song. Essentially, the masters are the source material from which copies of any recording are made – e.g. vinyl, CDs, MP3s, streams, etc.

Is it normal for a record label to own an artists’ masters?

Victoria Wood: In order for someone other than the original owner to “own” masters, it’s necessary for an assignment of copyright, so an artist is transferring copyright ownership of the masters to a third party.

Any record deal is a negotiation. Record labels can take the firm position of requiring an assignment of copyright, meaning an artist is required to transfer ownership of the masters to the record label for either a limited time or for the life of copyright (where the rights in the masters never go back to the artist). However, record labels can also offer to enter into limited licence periods for masters – this is where the artist retains ownership of the masters but gives the record label exclusive rights to exploit their recordings for a limited period of time (they have rights to make money from the masters for a period of time and then it’s over). Assignment of copyright is not uncommon, I wouldn’t say that it is “normal” – each deal is different.

There is a lot of opportunity in the modern marketplace for artists to retain ownership of their masters and – for example – do distribution deals with distributors (distributors aren’t record labels). It is now a much more open marketplace to be able to get music distributed through the DSPs (Digital Service Providers); even Apple and Spotify do direct deals. Distribution deals offer a much higher royalty rate for an artist, and the artist receives the lion’s share. 

There are a lot of factors in making a decision about which deal is right for the particular artist.

What I might also add in here, is that if a record label invests heavily in an artist with recording costs, music video costs, marketing, promotion, advances, tour support – in the UK, this is never considered to be a debt, and is not repayable by the artist if things don’t work out. So a record label is taking significant financial risk. For this risk, they want to acquire ownership of the copyright in the masters.

Why is owning your masters seen as such an important thing for a lot of musicians? Should a musician worry about signing their masters away?

Victoria Wood: Every deal is different, and there is a balance to be struck with A) the commercial level of the deal, B) what is being offered, and C) whether that is enough for an artist to want to assign over their rights to the master recordings. Music can take a long time to make meaningful profit. It might be impossible for an artist to turn down an advance in the short term, rather than to try and negotiate a better long term deal. It is not a decision to take lightly, and should be discussed with a lawyer and management team. In an ideal world, an artist will aim to retain ownership to his/her masters.

Put in the simplest terms, controlling and owning masters keeps an artist in full creative control. In recording agreements, yes, it can mean that the label owns the masters, but there is often a list of creative approvals as to what can and/or can’t be done without approval of the artist (NB, this is unlikely to cover every eventuality). If an artist doesn’t do a deal with a record label but for example does a distribution deal instead, it can result in an artist receiving much better financial terms and being able to grant licences directly (rather than through a list of approvals in a record deal).

When assigning rights, an artist should think long term and to also contemplate the future of the record label an artist may be signing to. For example, what will happen to the rights if the record company goes into liquidation? If an artist is signing to a small independent label, the small independent label may want to (down the line) sell its catalogue of master recordings. When record labels are sold their ownership of masters and their value comes into play. Does the artist want to have his/her masters owned by the buyer of the company? As we saw recently with Taylor Swift, she was incredibly upset about her masters being sold to Scooter Braun. Most of the time, companies do not want to agree to an approval over the sale of their business/catalogue as a whole as this is their business and they want to have freedom here.

“In short, get a good music/entertainment lawyer. It’s a false economy to think you don’t need one or can’t afford one”

What can a record label or musician actually do with these masters, anyway?

Victoria Wood: It’s all about the exploitation of the masters, and generating revenue from the exploitation. For example, licensing the masters in a film, putting them on compilations, releasing a remix, and so on. 

As I mentioned in the previous question, often there are creative approvals for master usage when an artist signs to a record label and a label can’t just do everything they like with the masters. Before granting a sync licence (so for example, including a master in a film, TV programme, or advert) or getting a remix, a label may have to get artist approval over this before agreeing to move ahead with the opportunity.

It's also worth noting that if the artist is a writer of their recorded music, there are clearances to be made on the songwriting/publishing side as well. 

With someone like Kanye West, who samples other people's recordings on a lot of his music, would the masters still be worth a lot?

Victoria Wood: Just because samples are included in masters, this does not mean Kanye does not own the master recordings – there would most likely have been a process of clearing samples in order to include them in his recordings. It’s important to have cleared the rights of any third parties, otherwise you’ve got a copyright infringement claim.

How would an artist usually go about getting their masters back from their label?

Victoria Wood: This, I would suggest, would involve an artist buying back the masters, and it would be a negotiation as to what this would cost. A record label doesn’t have to agree to do this. 

In the event that a record deal doesn’t work out, then there is often a termination agreement to be negotiated and agreed upon. If masters haven’t been released, then the labels will often come to an agreement for assigning back rights to unreleased masters, and also on released masters too.

What should a musician look out for to make sure they don’t get stiffed by a bad contract?

Victoria Wood: In short, get a good music/entertainment lawyer. It’s a false economy to think you don’t need one or can’t afford one. Contracts are not casual documents, they’re legally binding. It’s imperative to have advice and people on your team who are experienced with dealing with music agreements (general non-entertainment lawyers don’t necessarily know the usual commercial terms and what to ask for). It’s also worth noting that record labels frequently pay the artist legal fees as additional advances.

Record label agreements are detailed and lengthy with many facets to them. It’s important to be considered and to think as far ahead as possible as to how the agreement will impact the artist, commercially and creatively.