Recording contracts typically specify by contract that an artist’s recording is made as a work for hire. As part of the contract, the artist and record company also agree that if the recording is not a work for hire, the artist grants ownership of the recording to the record company. The artist usually receives an advance to pay for the recording process. After the recording is made available for sale, the artist is paid a royalty that is a percentage of the sale of each album. Artist royalties are first used to recoup or pay back the recording advance. After that advance has been paid back, the artist can keep all additional royalties although the record company owns the recording made by the artist. If the artist is also the songwriter, the record company will pay a license fee for each recorded copy of the song.
The big question in the American music business is whether artists can regain ownership of the recordings they made many years ago. It’s important to remember that the artist signed a contract saying the recording was a “work for hire,” meaning the artist agreed by contract that the recording was owned by the employer from the moment the recording was made. The issue to be decided in 2013 is whether the recording actually IS a work for hire. It’s an interesting legal question, since recordings are not mentioned in the copyright act as being eligible to be works for hire.
If a recording IS a work for hire, the recording company owns it, and the artist does not have the right to any ownership. If a recording is NOT a work for hire, the artist, or perhaps the producer, DOES have the right to take ownership away from the record company after 35 years. If the law doesn’t include recordings as works for hire, does that mean a recording CANNOT be a work for hire? Who will decide ownership of these valuable recordings?