What are master rights and how are they applied?
The rights to audio recordings, thus the rights on what is coming out of the speakers when a recording is played, are called master rights. This word stems from the term “master tape,” which originally was the tape the final “mastered” recording was on and which was then handed off for duplication. You are not allowed to upload a song you do not hold the master rights or written permission from the rights holder for.
When recording a song in your own studio, thus also functioning as a producer, you are holding the master rights. When recording a song in an external studio where you are also functioning as a producer, you are also holding the master rights. When the song is recorded in an external studio by another person acting as producer, you will need the allowance of this person in written form for the use of it.
In a nutshell: When commissioning someone with the recording – even when you have to pay for it – you should in any case reach an agreement in written form with the producer that guarantees the master rights for you and therefore the right of use for digital distribution. In most of the cases you pay for the work of the producer and include the master rights in the payment as well. Often it is agreed that the producer receives a share of the sales through a “producer’s license”. The specific allotment is a matter of negotiation, but in general no producer settles for less than 3%.
The golden rule is: All arrangements have to be settled up front. Once the recordings have started or the master tape is finished, different points of view can quickly degenerate to a serious problem, escalate to a “deal breaker” and the entire project is doomed. And who really wants to record and produce when the result only collects dust in a drawer?