3) The industry’s core framework: two distinct assets
At the conceptual level, the modern music industry runs on a simple but crucial separation: Asset A and Asset B.
Asset A: The underlying musical work (the “song”)
This is the intangible creative content—melody, harmony, lyrics, and compositional structure. Even if nobody records it, it can exist as an idea expressed in a fixed form (for example, written or notated, or captured in a demo).
Asset B: The sound recording (the “record”)
This is a specific recorded performance of that song—one particular version captured as audio. Two different artists can record the same song, and each recording can be a separate asset.
Why the separation exists:
- A song can be reused across many recordings, films, and contexts.
- A recording can generate its own value as a distinct product.
A simple example
Imagine a songwriter writes a song in their bedroom. That “song” is Asset A. Later, an artist records it with a producer in a studio. That recording is Asset B.
Now the world might know the hit because of the recording—but the underlying song still exists as an independent asset that can be recorded again by someone else, translated, or performed live.
Key Insight: Two different groups can be paid from the same moment of music usage because, conceptually, two different assets are being exploited at once.