A musical composition is a work of art consisting of music. A musical composition can take various forms, such as audible sounds, notation which is written or printed on paper, a (traditional) audio recording, or for example, a MIDI or MP3 file. The legislative history of the Copyright Act states that "musical composition" refers to works with or without words. Therefore, sheet music is always considered to constitute a musical composition – not a literary work – regardless of whether it contains words or not.
The copyright of a musical composition
According to Copyright Law, a person who has created a literary or artistic work, has copyright to the work. A musical composition is copyrighted, but a musical work can be expressed in various forms. However, the subject, structure or other ideas can't be protected, but only the individual and original form, which the expression takes. For example separate chords or combinations of chords are not protected by copyright.
A copyright is created by law when the musical composition is created. Thus, a copyright does not require registration or any particular copyright mark. The only precondition is that the musical composition exceeds the required level of originality. In other words, the musical composition must be the product of the composer's independent and original creative work. As a rule, the works is considered to exceed the required level of originality if it can be assumed that no-one else would have produced a similar work, had they undertaken to create one. There are no other requirements to achieving copyright protection. Thus, the musical composition's artistic quality, or the time spent on creating the work is not relevant from the copyright's point of view. Whether or not a musical composition exceeds the required level of originality is decided on a case-to-case basis.
The Copyright Council has assessed a musical composition's level of originality and issues concerning the copyright in its opinion 2003:11. If someone brings a lawsuit against copyright violation, a court will judge whether the threshold of originality has been exceeded.
Photo (left) : Wilma Hurskainen
Photo (right): The cover of Shogun Kunitoki album, containing examples of joint musical compositions. Graphics: Shogun Kunitoki
The copyright is created to the person creating the independent and original work, for example a composer. A copyright can be created to a natural person only. Thus, a company or some other organization can obtain a copyright only by agreement. A copyright can also be created simultaneously to two or more individuals. This type of a work is called a joint work. For example, a musical composition created through the creative input of two or more individuals, where the authors' contributions do not create separate parts, is a joint work. The authors of such a work are all considered composers, or authors, of the work, should the creative input of each author exceed the required level of originality. Providing an idea or subject doesn't create a copyright for the composition. Every contribution has to exceed the threshold of originality. The authors of a joint work control the exploitation of their work together.
When the authors' contributions to the work can be separated, the work is called a collective work. In that case, each author controls their own part, independent of the other authors. When the entire work is performed, the permission must be given by all the authors. An operetta for example can contain separable parts of speech, dance and music. A musical composition, too, can consist of independent parts created by a composer and an author of lyrics. In the Supreme Court decision KKO 1956 II 76 (Mustalaisparoni) the court considered the operetta's music and text to form separable and independent works of art. The writer of the text was not shown to have contributed a creative input in the creation of the musical composition that would have made him an author of the musical composition together with the composer.
Musical composition - economic rights
The purpose of economic rights is to give authors of works the exclusive right to make the exploitation of their creative work subject to their permission. In other words, the composer has the right to determine when, where and how his musical composition is delivered to the audience. Another purpose of economic rights is to recompense authors for their creative work and to inspire and encourage future creative work. Authors can transfer their economic rights fully or partially.
Composers have the right to make the duplication, or the reproduction of their musical compositions subject to their permission. Reproducing a musical composition refers to putting the work in a material form. As a rule, the work is reproduced when it is expressed and attached to a certain medium (paper, CD, file) so that it can be copied again from that medium to another storage medium.
A musical composition can be reproduced, e.g., by writing or copying the notes or by recording the work in some way on a tape, disk or similar device (for example in a file). It makes no difference whether the object of reproduction consists of notes, a live performance, radio or television broadcast or an existing recording of the musical composition. As a rule, also partial duplication of a musical composition is considered reproduction.
The Copyright Act does not determine any technical specifications as to what constitutes a reproduction. Thus, all duplication of a work is considered reproduction regardless of the technology employed.
Screen shot of 'Näinä mustina iltoina' music video by Regina as an
example of duplicating a recording of their musical composition
There are four ways to make a musical composition available to the public:
The aim has been to include in the Copyright Act all the current means that can be used for making a work available to the public. Thus, the concept of "making available to the public" covers traditional performance of the work to the public, e.g. in a rock concert, as well as making it available via radio or television broadcast or in a data network. For the authors of a musical compositions this means that they have the exclusive right to control where and when their works are performed to the public and to be recompensed for the same. For example, a concert organizer or someone performing the work must obtain either the author's permission or permission from the organization representing the author, such as Teosto, to perform the work to the public.
That is to say, a copyright only gives its holder the right to control the work's life in the public. Traditionally, copyright has not been applied to any activities that take place within a private family. In other words, the composer controls the communication, performance, distribution and display of the musical composition only when the target is the public. According to the Copyright Act, the audience is considered to be the public, if the target group for using the work has not been defined in advance. This is the case, for example when practically anyone can participate in the event where the work is used. According to legal literature, the audience is considered to be the public also when the right to participate in the event arises from a criterion (for example a performance for pensioners) that allows for a considerable number of participants.
The definition of the public can also include paid performances to a fairly large private group, e.g. during a non-public corporate event. The Copyright Council opinion 2003:20 considered performing a musical composition in a company's private event with 147 participants a performance to the public.
Composer's Moral Rights
Moral rights are rights held by the composer that, as a rule, are inalienable. Moral rights are attached to the author's person and relate to the protection of the work's original nature. They ensure the author's right to be named in connection with the work, and that the work is not altered or used in a way that infringes on its artistic value. Together with economic rights, moral rights form the basis of copyright.
Traditionally, moral rights have been considered to include the right to attribution and the right to the integrity of the work. Right to attribution means that the author's name should be acknowledged, in accordance with fair practice, when the work is reproduced or made fully or partially available to the public.Generally this means stating the name in the form requested by the author. Instead of the author's name, this can mean using a pseudonym, pen name (stage name) or publishing the work anonymously. The manner in which the author's name is acknowledged varies according to the art form. For example, when broadcasting a musical composition on radio or television, the authors can be acknowledged before or after the performance. However, the obligation to acknowledge the author's name is ultimately dictated by existing practices in each industry. For example, advertisements seldom acknowledge their authors by name.
According to the right to the integrity of the work, the work cannot be altered in a way that defames the author or used in a context that defames the author. In case law, only indecent alteration of the work has been considered to infringe on the right to the integrity of the work. For example, combining a work exhibiting a certain ideology with a work of opposing ideology can infringe on the author's right to the integrity of the work. An infringement of moral rights is assessed on an objective basis, taking into consideration, e.g., the nature of the work, the ideology exhibited by the author in the work, and the purpose of the work. In addition, changes in moral sensitivity must be taken into consideration. What was considered an infringement on the integrity of the work 50 years ago does not necessarily apply today.
As a rule, a copyright gives composers the exclusive right to make the use and exploitation of their work subject to their permission. However, this is not an absolute right, and for practical reasons there are certain limitations. The justification for such restrictions is based on the interest of education, research and culture, and on the freedom of speech. That said, none of the restrictive provisions can limit the author's moral rights.
Categories of Restrictive Provisions
The restrictions fall into three categories, including full restriction, compulsory license system, and contractual license system. Full restriction means that in certain cases works can be freely used for certain purposes. In that case, a musical composition can be used without the author's permission and without compensation. In the compulsory license system, the work can be used without the author's permission, but the author must be compensated for its use. Playing records on the radio is based on the compulsory license system. Works under contractual license system can be exploited only with the author's permission and compensation must be paid. You do not necessarily have to obtain the permission directly from the authors but from the organization that represents them (if the composers are members of an organization). In Finland, authors of music (composers, authors of lyrics, and arrangers) are represented by Teosto, and musicians, performing artists ja phonogram producers are represented by Gramex.
Temporary reproduction of a work is allowed without the author's permission. It is allowed when the reproduction forms an integral part of a technological process, is transient in nature, is carried out for the sole purpose of enabling transmission in a network by an intermediary, and has no separate economic value on its own. For example, listening to a musical composition on a website creates a copy in the computer's cache that is a necessary reproduction required for listening to the musical composition.
Anyone can produce a few copies of a published work for private use. There are no limitations regarding the method of copying, and therefore, copying can be done by way of manual copying, photocopying, downloading from the internet, or any other way. Private use refers to copying the work for personal use or within one's family. Personal use is considered to include, among other things, studying, private research and hobbies that do not involve commercial gain. However, such copies cannot be used for any other purposes. Thereby a performing artist, too, is allowed as a professional to make copies of musical compositions for practicing on his own or within a private group. That said, an artist performing a musical composition to the public from the notes he has copied is not considered to fulfill the criteria for private use.
According to the Copyright Act, private copying can, as a rule, be performed by a third party. This means that the copying can be commissioned to a company offering copying services. Musical compositions form an exception to this rule. Copying notes must always be done alone, for example with the self-service copier of a company offering copying services.
According to the Copyright Act, published works can be quoted to the extent required by the specific purpose and in accordance with fair practice. As a rule, a work is considered to have been published when reproductions of it have been made available to the public with the author's permission.
The fair practice of quoting has been considered to require using the quotation to aid intellectual creative work. Thus, quotations must be appropriately connected to the work of the quoting party. In addition, the quotation must fulfill the so-called invoking function, i.e. there must be a justifiable reason for using a quote in the context it is presented in. Acceptable use of quotations includes, among other things, providing support for your own thoughts and views and quoting for illustrative purposes. The author's name and the source must be acknowledged in the extent and manner required by fair practice. Generally this means stating the place of printing and the quoted pages in addition to the name of the author and the work. As far as recordings are concerned, also the record company must be mentioned.
All types of works can be quoted using any available technology. Therefore, any published work can be quoted within the meaning of the Copyright Act. A work consisting of quotes only, however, is not considered to conform to the principles of fair practice. A quotation should not be so short, either, that it gives a false impression of its source. With musical compositions, the problem is usually that the quotation is too long, in which case it is considered plagiarism. There is no specific rule on how big a portion of someone else's musical composition you can quote. That is determined on a case-to-case basis.
Copying in Educational Establishments
Copying in educational establishments is permitted under contractual licenses. They allow limited photocopying and similar copying of published works. Music schools are covered by an agreement between the Ministry of Education and Kopiosto that requires that the pupils are not charged for the copies. If they are charged for the copies, the school must obtain a separate license from Kopiosto. Private music schools (unless operated under by the Ministry of Education) must always obtain a copying license. The copying right does not include the right to convert works into digital format.
Teachers can copy up to 10 pages of any sheet music publication for educational purposes for the same students within one semester, or half of that if the sheet music publication has less than 20 pages. The copying of entire sheet music publications is not allowed. Copying sheet music for use in a performance is permitted to a certain extent. Sheet music can be copied for a performance and for practicing for a performance if it is in connection to teaching or an event organized by the school with free entry and an audience consisting mainly of students and staff. However, this does not remove the obligation to pay compensation for public performance if works protected by copyrights are performed in the concert.
Reproduction for Education
A published musical composition performed by a teacher or a student can be reproduced by recording the sound or image. That means that, for example, a concert by students may be recorded without permission from the author of the work. Such reproduction is, however, only permitted for short-term use in teaching.
Small parts of musical compositions, or in case of short musical compositions, entire works may be included in a compiled work used in teaching. The musical composition should be at least five years old, counting from the year it was published. In addition, the restriction applies only to compilations that are produced by printing or some other comparable method. In other words, the restriction applies only to musical compositions that are published as sheet music.
Whether a musical composition is extensive and what constitutes a small part is decided on a case-to-case basis. However, a part of a musical composition that could be performed as such is not considered a small part. This restriction falls under the scope of the compulsory license system, i.e. the permission of a composer is not required, and the composer does not have the right to prevent such use of the work. The composer is, nevertheless, entitled to compensation for the use of his musical composition.
Expiry of a composition's copyright
A copyright remains in force for 70 years after the end of the year during which the composer died. In case of a joint work, the copyright remains in force for 70 years after the end of the year during which the last surviving composer died. After the copyright expires, the musical composition falls into public domain. The composer's economic and moral rights expire simultaneously.
Protection of classics
Protection of classics forms an exception to the expiry of copyright. It is a special protection that can extend to a work after the author's death. The main objective of classics protection is to protect common cultural interests and to benefit education and teaching. The Ministry of Education has the right to prohibit any public procedure that infringes on cultural interests. Anyone can demand the prohibition of an infringing use of a work, if they think that the interests cited in legislation are infringed upon. As a consequence, the work may be protected against infringing use irrespective of the copyright's expiry. An example of this is the Ministry of Education's decision of 1962 to ban the import of certain popular children books (including "Alice in wonderland" and "Robinson Crusoe") due to unskillful and careless translations, flaws in narration, and significant changes in the books' events.
Lyrics are protected by copyright as literary works if they are considered separate from the respective musical composition. In popular music, for example, the author of the lyrics and the composer are usually two different people, and the the copyright of lyrics belongs to the lyricist. On the other hand, if the composer and the author of the lyrics are one and the same person, the lyrics are protected by copyright as a musical composition.
Lyrics too, must be the product of the writer's original creative work to be protected by copyright, i.e. they must exceed the required level of originality. In case law, this level is considered to be exceeded, if it can be assumed, that no one other than the lyricist had reached the same outcome. Copyright requires the work to be a reflection of the author's originality and autonomy, thus mere ideas and mechanical lyrics are not protected by copyright. For example, a completely mechanical translation of an English source text produced by translation software is not protected by copyright. Whether the level of originality has been exceeded, is ruled case by case.
Lyrics – Economic and Moral Rights
The writer of lyrics has the exclusive right to make the exploitation of the lyrics subject to his/her permission. If the lyrics are used in a musical composition or translated into another language, authorization must be given by the original author. This rule applies to any copyrighted text, for example poem, being exploited in a composition. The lyricist is protected also by moral rights, which means the writer of lyrics has the right to be credited, and the lyrics can’t be changed or published so that it violates the author or his/her artistic vision.
Exception to the Copyright of Lyrics
If the musical composition is performed with lyrics, the text can be included in the concert program for the audience. The purpose of the exception is to enable the use of the text in the context of a performance. This applies to both classical and popular music. However, performing the musical composition must be authorized.
According to the Copyright Council's opinion 1996:6, the lyrics of a song were allowed to be printed without the author's consent to be used by the audience during a songfest.
Lyrics – Terms of Protection
The copyright of lyrics remains in force for 70 years after the end of the year during which the author of lyrics died. More detail information on this topic is provided in the section 'Expiry of a Composition's Copyright' .
Audio Recording Producer – Economic and Moral Rights
The protection of producers of audio recordings differs from the composer's copyright and the performing artist's related right. The protection of phonogram producers does not relate to the protection of creative work or artistic performance but rather to the protection of a commercial product. Unlike an author or performer, a phonogram producer can also be a legal person, such as a company or some other organization.
In the Copyright Act, phonogram producer refers to a natural or legal person who first records the sounds of a performance. The producer does not necessarily take part in the actual technical or mechanical production of a phonogram. It is enough that the producer has the financial and operative responsibility for the production of the phonogram. Often the producer is a record company.
In the Copyright Act, "phonogram producer" does not refer to artistic producer.
The Copyright Act provides phonogram producers essentially with the same rights as performing artists. This means that the phonogram producer's consent is required, if the phonogram:
Unlike performing artists, producers do not have moral rights to the audio recording. This is because producers' relations to the product of their work is not considered as personal and creative as those of authors or performers.
Requirements of a Related Right: Protection of the Producers of Audio Recordings
A related right protects only the original producer, who is responsible for the first fixation of the performance. Thus, parties who later produce copies of the original recording are not protected as phonogram producers in the meaning of the Copyright Act. Such parties can, nevertheless, be transferred rights of the original producer by agreement.
Phonogram refers to any type of recording that is only meant to be listened to. If the recording also contains images, it not considered an audio recording, but audio-visual recording, in the meaning of the Copyright Act. There are no requirements relating to the quality or content of a phonogram. Thus, the recorded sound does not have to constitute a work or any other object of protection. For example, recording the sound of rain or the buzzing of insects guarantees the producer the same rights as producing a recording that contains a musical performance. However, the object of the recording must be a detectable sound.
Arrangement refers to the creation of conscious changes in an existing musical composition. Thus, an arrangement is an adaptation of the original musical composition, where the character of the original musical composition is preserved in a recognizable form. An arrangement is always a derivative of the original musical composition, and that is why the arranger must obtain consent from the composer of the original work to produce an arrangement.
Arrangement Copyright Creation
According to the Copyright Act, an arrangement is protected by copyright since its creation. However, it must be the product of the arranger's original creative work. A mere mechanic change of key that can be produced with the help of notation software without human creativity is not protected by copyright. In this way, the copyright only protects the original part of the arrangement.
Arrangement – Economic and Moral Rights
The arranger holds the copyright to his arrangement in the particular form. Thus, the arranger has the exclusive right to make the exploitation of the arrangement subject to personal permission (see composer's economic and moral rights). However, an arrangement is always subordinate to the original work's copyright. The arranger may not impose restrictions on his arrangement in a way that infringes on the copyright of the original work. For example, a public performance of the arrangement requires permission from both the arranger and the party that holds the copyright to the original work.
Arrangement – Terms of Protection
The arrangement's copyright remains in force for 70 years after the end of the year during which the arranger died. See also Expiry of a composition's copyright.
Arrangement in the Public Domain
After the copyright has expired, musical compositions can be arranged without restrictions. This also means that the original composer's consent is not required to publish the arrangement. Whether or not a musical composition is in public domain, can be found out by looking at when the composer died. For example, with copyright protecting a composition for 70 years after the end of the year during which the composer died, Jean Sibelius' (died in 1957) music will fall into public domain in 2028.
There is also so-called traditional music (trad.) that does not have known authors. Such music is in the public domain, i.e. not protected by copyright in its original form. Here are some examples of traditional compositions that are in the public domain:
Overview of the Economic and Moral Rights of a Performing Artist
The live performance of a performing artist is protected by a related right. The protection of related rights is provided in the Copyright Act. Any type of use that falls under the protection of related rights requires consent from the holder of the related right in question. Despite their exclusive nature, certain aspects of related rights provide less protection than copyrights.
According to the Copyright Act, the performing artist's consent is required for the following:
Recording refers to the first recording of a performance on any storage medium. The device that is used for recording the performance can utilize any technology. Both analogous and digital recording technologies are subject to the right. That means that "recording" refers to audio or video recording. For example, recording the concert of a rock band falls under the scope of the performer's exclusive right.
The performer is also given the right to make all instances of making the performance available to the public in a radio or television broadcast subject to his permission. Direct transmission refers to transmitting the performance by wire or wireless means from the place of performance to another place where an audience can see and hear it. Thus, displaying a concert on the screens of the waiting area of a concert-hall falls under the scope of performing artist's exclusive right.
It should be noted that a live performance is, thereby, protected only against recording and making it available to the public as cited in the law. As such, a live performance, without recording or making it available to the public, does not give rise to any other rights or compensation. Therefore, any compensation for the performance should be agreed upon separately, e.g., in a contract for live performance. For example, mandatory collective labor agreements that apply to orchestral musicians may contain provisions relating to the recording of performances and the display of such recordings (recording contracts).
Audio Recording of a Performance
Performing artists have the right to make the records and other recordings containing audio that are produced from their performance subject to their permission. This exclusive right covers:
Copying an audio recording requires consent from the performing artist regardless of the technology employed. The public presentation of a recording to an audience also falls under the scope of the exclusive right. For example, playing a CD in a restaurant requires, as a rule, consent from the performing artist. Communicating refers to all forms of communication where the audience is at a distance from the starting point of the communication (e.g. selling music on the internet). Distributing refers to distributing copies of the work (phonograms) to the public.
Visual Recording of a Performance
Performing artists have a limited right to make the exploitation of the visual recording containing their performance subject to their permission. Performing artists do not have as extensive control over visual recording as they do over audio recordings. They can make the exploitation of a visual recording that contains their performance subject to their permission in the following cases:
As a rule, performing artists do not have the right to make the public display of the visual recording containing their performance subject to their permission or to receive compensation for the same. There is, however, an exception in the Copyright Act that relates to visual recordings of music. The exception gives the performer of a musical composition the right to compensation when a visual recording containing his performance is displayed to the public. According to the legislative history of the Act, visual recordings of music refer to visual recordings, in which the recorded performance consists mainly of the performance of a musical composition.
For example, musicians performing in a music video are entitled to receive compensation when the music video is displayed to the public. On the other hand, dramatic films are not covered by the exception, even if music had an important role in the film, as the main content of the recorded performance does not relate to performing a musical composition.
Requirements of a Related Right: Protection of the Performing Artists
In order to be protected by a related right, the performing artist's performance must fulfill certain criteria provided in the Copyright Act. There is no threshold similar to the level of originality. Thus, a performance does not have to constitute an original and independent work. A performance with the aim of following the conductor's instructions, is also protected by a related right. However, related rights apply only to performances that fall under the field of performing arts. According to the legislative history of the Act, performing arts include acting, singing, interpreting and other acts of performing.
Work or performance of folklore
In order to be protected by a related right, the subject of performance must be either a written or artistic work or a performance of folklore. Ultimately, the existence of a work within the meaning of the Copyright Act is determined by assessing whether the work is original or not. On the other hand, the work does not have to be protected at the time it is performed. A work that is no longer protected by copyright or has never been protected by copyright according to legislation in Finland, or any other country, can also constitute the subject of a performance.Consequently, artists performing works by Bach or Mozart are also protected as performing artists.
The artistic work can also be a performance art or improvisation, which means the performer is the same as the performance, or part of it. As far as improvisation is concerned, the performer is both the creative author and the performing artist.
A performance of folklore can also be considered the subject of a performance. According to the legislative history of the Act, this refers to performances that consist of natural elements of artistic heritage developed and maintained by the community or traditions that reflect the community's artistic heritage. A performance of folklore can also take a material form. Some examples of expressions of folklore that take a material form include products of folk art, such as musical instruments and sculptures. The decisive factor here is that the act of performing must form an integral part of the "display" of folklore. As a consequence, certain activities, such as lace making, and games, such as the traditional Finnish game "kyykkä", are not protected.
Copyright holders (e.g. composers, arrangers, or writers of lyrics) can trade their rights by transferring them either fully or partially. This freedom of contract gives the parties the right to negotiate the extent and other conditions of the transfer. The transferee can be a natural person, or a company or some other organization. Copyright contracts are subject to general contractual principles. This means that they fall under provisions relating to the invalidity and equitability of contracts and the protection of consumers.
A copyright can be transferred either fully or partially. Full transfer refers to the transfer of rights which is not limited in duration or scope. With a partial transfer, some of the copyright remains with the author. Copyright holders can also grant a license or some other limited right to exploit the work only. Such rights can be limited in scope, duration, and/or territory. For example, an agreement can be made regarding the use of a musical composition in a product advertisement.
Even if economic rights are transferred, the moral rights always remain with the author. The right-holder can transfer moral rights only to a limited extent in connection with the licensing of the work that is limited in scope or nature. For example, by agreement, the copyright holder can waive any claim to his moral rights in relation to a particular use of the work in an advertisement.
A publishing contract may well be the first contract that an author of music encounters during their career. Publisher is the party that bears the financial risk related to the economic exploitation of a musical composition and arrangement. For example, printed sheet music can be published basically in two different ways. It can be published by composers themselves, which is exceptional, or the composer can transfer the publishing rights to a specialized company. In most cases, the producer and the publisher are one and the same party (company) but they can also be two separate legal persons.
The aim of publishing contracts is to yield financial profit to both the makers of music and publishers, as well as to bring the products to the market in the first place. Due to the author's limited financial resources, a publishing contract is often the only viable way to introduce the product to the market. The form of publishing contracts has not been specified in legislation, and the contracting parties are free to determine applicable rights and responsibilities. The publisher is not vested with the copyright but only the right to publish the work in accordance with the agreed terms and conditions.
Thus, the terms of contract determine the extent of the publisher's rights. The subject of the publishing contract is an important factor when determining the scope of the publisher's rights. For example, a composer can transfer the rights to all arrangements to the publisher or retain all arrangement rights. Arrangement rights are important to publishers because they can be used to extend the life of the publisher's rights to the work. For example, if the composer's copyright is about to expire the publisher can extend the musical composition's term of protection by producing an arrangement of the piece. In that way the publisher will have exclusive right to the arrangement for 70 years after the end of the year during which the arranger died. This is possible if the publisher has made an agreement that gives them the right to arrange the original composition.
Transfer of related rights
The holders of related rights can transfer their rights either fully or partially in the name of freedom of contract. Performing artists can transfer their rights partially, e.g. to a record company in the same way as original phonogram producers can transfer their rights to other producers. The contracting parties are free to determine the terms and conditions and the scope of their contract. When agreeing on the transfer of related rights, it should be kept in mind that an object of protection, such as a recording, can be subject to several related rights as well as actual copyrights. As a consequence, exploiting a recording may require obtaining more than one consent or permission.
A recording contract is a copyright contract. Holders of copyrights and related rights determine the terms and conditions relating to the exploitation of their rights in recording contracts. Traditionally, the parties to a recording contract are the performing artist and a record company. The contract details the conditions for the production and making available to the public of a recording that contains the performing artist's performances. With a recording contract, the performing artist transfers rights provided to him in the Copyright Act to a record company that needs the rights to produce and market recordings. As such, a recording contract is the foundation for cooperation between the performing artist and the record company.
Traditional recording contract
A contract that makes the record company responsible for all costs related to the production, publishing and marketing of phonograms, is called a traditional recording contract. With this contract, the performing artist's exclusive rights, such as the right to make the recording of performances subject to his permission and the right to produce copies of the recordings of his performances and make them available to the public, are transferred to the phonogram producer under the terms and conditions of the contract. According to the traditional recording contract, the record company covers all the costs related to the phonogram. Thus, the record company is responsible for the expenses that arise from producing, publishing and marketing the phonogram.
The artist receives compensation proportionate to the sales of the phonogram that, in some cases, increases with the sales volume of the phonogram. Royalties can be distributed, e.g., as follows:
|Units for Sale||Royalty %|
|1 - 50 000||8|
|51 000 - 100 000||10|
|101 000 - 150 000||12|
Distribution of royalties
Usually royalties are determined in the contract as a proportion of the phonogram's wholesale price, or Published Price to Dealer (PPD), excluding value-added tax. Thus, if the phonogram's PPD is, for example, 12 Euros and the royalties 8%, the artist receives 0.96 Euros for each sold phonogram. In a band of four, this will still be divided by four, leaving each musician with 0.24 Euros per sold phonogram.
The payment of royalties can be made subject to reaching the so-called break even limit. This type of a condition transfers some of the record company's cost risk to the artist, royalties are paid only after the company has been able to cover some of the costs with income from the phonogram's sales. In addition, the contract can contain many other deductions from the royalties.
The duration of a traditional recording contract varies. It is customary, that company undertakes to publish one album-length phonogram, and holds an option that covers, e.g., the next two phonograms.
So-called Master Contracts
If the artist chooses to manage the production of the phonogram on their own but the record is published by a record company, the contract is called a master contract. With the contract, the artist transfers the publishing rights of the master copy of the phonogram to the record company. The record company has to publish only the final phonogram in the agreed format. In that case, the artist will hold the phonogram producer's rights in addition to the performing artist's rights. With the master contract, the artist's bargaining position is better than with the traditional recording contract. On the other hand, the downside for the artist is that his financial risk is bigger than with the traditional contract.
Authors have the right to manage their copyrights on their own. However, most makers of music use the services of collecting societies to manage copyrights. In this case, the collecting society is responsible for the practical management of the copyrights on behalf of the author on the basis of the authorization provided in the membership agreement. The membership agreement also defines the instances in which the author is responsible for negotiating the contracts (e.g. stage works'' rights). The Finnish Composers' Copyright Society Teosto is the copyright organization for authors and publishers of music.
The Finnish Composers' Copyright Society Teosto was founded in 1928, and it is a not-for-profit organization. Teosto manages the copyrights of Finnish authors of music and promotes Finnish creative music and the creation of favorable conditions for it. In addition, Teosto represents foreign authors of music on the basis of reciprocal agreements with collecting societies in other countries. Teosto's mission is to represent the interests of the authors of music, to grant licenses required for using music, and to distribute collected royalties to the authors. As such, Teosto is an important link between the authors and the users of music.
The supreme decision-making body in Teosto is the Annual General Meeting; all musician members of Teosto have the right to participate in the meeting. The Annual General Meeting elects the Board of Directors that is responsible for everyday operations and management. Both authors (composers, writers of lyrics, arrangers) and publishers of music are represented on the Board. In practice, the Board determines the terms of distribution and the amount distributed to the rights-holders.
Teosto enters the works of authors of music and their right-holders in its database. The information entered in the database includes the name of the work and its authors, i.e. its composer(s), writer(s) of lyrics and arranger(s). Teosto collects information relating to the use of music from reports by performing artists, event organizers and radio and television companies. In practice, concert organizers and performers report, which musical compositions have been performed in the concert, to Teosto. Teosto also commissions different studies relating to the use of music to collect user information. On the basis of the reports and declarations, Teosto distributes royalties to the right-holders in its register.
Authors of music (composers, arrangers, writers of lyrics) and writers, who hold a copyright to a musical work or a related written work, can become members of Teosto. At least one of the applicant's works must have been performed to the public or recorded on an audio or visual recording. Similarly, a right-holder who has received the copyrights of a deceased author of music or writer through inheritance, testament or marital right to property can become a member of Teosto during the copyright's term of validity. Publishers who publish music on a constant basis can become publisher members of Teosto. Becoming a member requires signing the membership agreement that defines the rights transferred to Teosto by the member and the contracting parties' other rights and obligations.
With the membership agreement, the author transfers the following rights to Teosto as of the creation date of each work:
Teosto does not oversee the performing of music that is composed specifically for an opera, operetta, ballet, play or any other music for stage (stage works' rights). This is the case when the work is performed in its original context as a stage work. Here the author is responsible for managing the rights, i.e. permission for performing a work that is protected by stage works' rights should be obtained directly from the author. It should also be noted that this exception relating to stage works' rights apply to performances of the work only. Thus, the permission to record a stage work is granted by Teosto.
The exception does not apply if the music that was composed specifically for a stage work is performed outside its original context. If necessary, Teosto's Board has the power to determine what "original context" means. For example, Teosto is entitled to collect royalties if parts of music composed for a stage work are performed in a concert or in some other context.
Teosto's permission is always required when music made by Teosto rightholders is performed to the public (all other instances of performing but performances to family or a private gathering) or recorded on an audio or visual recording. Teosto can only grant permission to use music by its member authors.
Music in Events
Teosto's permission is required when a work is performed to the public, e.g. in a concert, festival, dance, customer event, or any other similar event. The fee depends, among other things, on the number of attendants, the area of the event site, and whether music is the main content of the event or not. The event organizer is responsible for applying for the permission before the event takes place. It should be noted that if recorded music is to be performed at the event, permission is required from Gramex, too. Gramex' way of operating is explained later on in this article.
Permission for recording music is required from Teosto, if the recording is to be used for any purposes other than private ones. Hence, permission is required when the recording is used for gain. Thus, permission is required to transfer music from a computer to a CD or an MP3 player if the music will be used for any purposes other than private ones. For example, a DJ needs to obtain a permission to record music to play it in a restaurant. Permission is required if the phonogram is to contain music by an author represented by Teosto or the Nordic Copyright Bureau (NBC). The producer of the phonogram must report the phonogram's content before publishing it.
As a rule, permission is required to record music regardless of whether it is the author's own music or not. In certain cases, authors can record their music without a recording permit. If the following conditions are met, the recording party is usually exempted from paying the recording fee: the producer and the author must be one and the same person, it must be the first edition of the album, and the maximum print cannot exceed 1,000 copies.
It should be noted that the recording permit does not authorize arranging the musical compositions. The permission to arrange a published work can be obtained from the publisher. If the work has not been published, the permission to arrange and translate it can be obtained directly from the right-holder. If necessary, Teosto can help obtain the publisher's or right-holder's contact information. However, Teosto will not apply for the permission on your behalf.
As a rule, permission is required from Teosto whenever music is put on the internet. Permission is also required from the musicians and record companies (e.g. through Gramex).
Teosto's internet license is also required when an author puts music on a private or their band's website, or a social network service, such as MySpace. The internet license is free of charge for Teosto members. The license presumes that the music is made available free of charge.  If the band or musician plays cover versions, the fee is 0.07 Euros per download.
Founded in 1967, Gramex is a copyright society that manages the related rights of performing artists and phonogram producers. According to the Copyright Act, the Ministry of Education elects an organization to represent performing artists and phonogram producers for a specific term of up to five years at a time. In practice, Gramex ry has been permanently entrusted with representing performing artists and phonogram producers. By signing the membership agreement, members (performing artists and phonogram producers) authorize Gramex to manage their related rights regarding the Copyright Act.
With the membership agreement, the members (performing artists and phonogram producers) transfer their rights that arise from the Copyright Act to Gramex that enforces them in Finland and abroad.
At the same time, Gramex is authorized to:
The responsibilities of the members include:
It is in the members' own interest to fully comply with these obligations. If a member fails to comply with their obligations, Gramex is entitled to deduct an accounting fee from the royalties payable to him according to the distribution rules.
Accrual of royalties
The royalties of performing rights payable to Gramex are based on §47 of the Copyright Act that states that compensation must be paid for performing phonograms to the public. In addition to the public performances of published recordings, royalties are collected from copying phonograms to be performed to the public.
Radio and television companies submit reports of the music they have used detailing the name and length in seconds of each piece. Other parties that play music (stores, restaurants, etc.) do not have to submit such reports; in their case the fee is determined, among others things, according to the floor area.
The royalties collected by Gramex are distributed to performing artists and phonogram producers according to Gramex's own distribution rules. The royalties for Finnish phonograms from abroad are distributed once a year in cooperation with the copyright societies in other countries. The royalties from abroad are based on the distribution and processing rules in force in the country of collection.
The distribution rules determine the right-holders, who are entitled to compensation, i.e. the performing artists (musicians, soloists, and conductors) and the phonogram producers. According to the rules, the royalties for phonograms are distributed half-and-half between performing artists and phonogram producers. With performing artists, the distributable amount depends on how vital a role the artist plays on each track of the phonogram.
Any disputes relating to the implementation and interpretation of the distribution rules are ultimately settled by the Board of Gramex.
The provision of the Copyright Act relating to the compulsory license system imposes restrictions on the rights of performing artists and phonogram producers. An audio recording may be exploited without the performer's or the phonogram producer's consent as prescribed in the Act, as long as they are compensated for the same. The compensation is paid through an organization approved by the Ministry of Education (Gramex Ry). However, compensation can be paid only if the audio recording has been published commercially, and copies of it have been distributed or communicated to the public. Pursuant to the provisions relating to the compulsory license system, audio recordings may be:
For example, playing a CD as background music in a restaurant does not require permission from the performing artists or the phonogram producer, as long as they are compensated. It should be pointed out, though, that the provisions relating to the compulsory license system apply to the rights of performing artists and phonogram producers only. A recording that contains music may be subject to the rights of other copyright holders, such as composers, writers of lyrics, or arrangers. Permission to exploit their works must be obtained separately, for example from Teosto Ry.
The consequence of the compulsory license system is that performers and phonogram producers have the exclusive right to make reproducing the performance and any recordings of the performance, on demand communication to the public, and distribution to the public subject to their permission.
The duration for a work is protected under the related rights differs from the duration of copyright protection. Although the work of a performing artist and that of a producer can be categorized similarly in relation to the Copyright Act, the duration of protection is different. In the following, both cases are elaborated.
As a rule, performing artists' rights remain in force for 50 years after the end of the year of the performance. Thus, the term of protection starts only in the beginning of the following year. If the performance is recorded on a phonogram and the recording is then published or made public within the afore-mentioned time, the term of protection will remain in force for 50 years after the end of the year, during which the recording was published or made public.
Producers of Audio Recordings
As a rule, the rights of phonogram producers remain in force for 50 years after the end of the year, during which the phonogram was recorded. If the audio recording is published within 50 years of the recording year, the term of protection will remain in force for 50 years after the end of the publishing year. Publish refers to making legal copies of the audio recording available to the public, e.g. selling CDs in a record store.
However, if the audio recording is not published but is made available to the public in some other way than through the distribution of physical copies of the recording within 50 years after the end of the recording year, the term of protection will remain in force for 50 years after such instance of making the recording available to the public. This applies, e.g. if the recording is made available to the public on the internet. In that case, the term of protection will be in force for 40 years after the year, during which distribution on the internet started. This also means that different terms of protection apply to the performing artist and the phonogram producer if the phonogram is made available to the public on the internet within 50 years of its recording year.
The European Parliament and the Council have amended the Directive 2006/116/EU in September 2011. According to directive the term of copyright for fixations of performances in sound recordings and for sound recordings themselves is extended from 50 years to 70 years counted from the date of publication or communication to the public. Additionally, if record producers fail to market a recording, performers can get of their rights back and market the record themselves, ʻuse it or lose it’ provision.
Case 1 "Using Spotify for Teaching"
"You want to play your favourite artist's music on Spotify during a music lesson. Is this possible, in terms of copyright law?"
Case 2 "Using Online Purchased Music for Teaching"
"A teacher has purchased music for their computer online. Can the teacher play the tracks in question to their students during a music lesson?"
No, if the online service terms define that the service is selling music for personal use only.. According to Copyright Act 21 §, a published work may be performed as part of teaching, as long as the source of the work is legal.However, an agreement defines the rights of a user accordig to the terms of the online service. Most online services selling music sell the right for personal use only and use in teaching is using the work in public. Check the terms of the online service you are using.
Case 3 "Copying CD Music for Teaching"
"May a teacher copy CDs they have at home, and CDs they have borrowed from the library, onto their computer and play the music from the computer during a music lesson?"
No, they may not. Although performing the music in an educational context is permitted, making copies for purposes other than private use is not. Therefore, copying music from an original recording, e.g. a CD, for anything other than private use, is prohibited.
Case 4 "Creative Commons and Teosto"
"May you license your own music under the Creative Commons license, even though you are a member of Teosto Ry?"
No, you may not. By joining Teosto, you have assigned the management of the intellectual property rights of your compositions to Teosto. In this case, you also cannot decide on your own licensing.
Case 5 "Private Use of Music Online"
"May you make private use of copies of music published online, even though you know that it has been uploaded without the consent of the copyright holder?"
No, you may not. According to the Copyright Act, a few copies of a published work may be made for private use. The provision, however, stipulates the so-called requirement of legitimate source, according to which private use copies may not be made of the track if it was manufactured or made public in a way that violates the author's financial rights. Violation of the requirement of legitimate source may result in liability for damages if the copier knew or should have known about the illegality of the source.