A composition is a musical piece that a songwriter or composer has created. It can have lyrics, or it can be purely instrumental. The composition is the intellectual property of the songwriter or composer, who is entitled to receive royalties from its commercial use. The composer typically retains the copyright, and the publisher handles the administration of the composition, including licensing it for use in various media.
A sound recording is a physical embodiment of a performance of the underlying composition. It captures the sound of all the performance elements, including the vocals, instruments, and other sounds. The sound recording is owned by the person or entity that created it, typically a record label or a producer. The rights to use the sound recording are separate from those to use the underlying composition.
Note:
Dolly Parton wrote the composition "I Will Always Love You," meaning she wrote the lyrics and melody. Whitney Houston, an Arista Records recording artist, recorded a version of Dolly Parton's composition. In this case, Arista Records owns the song's sound recording, while Dolly Parton and her publisher own the composition. This means that Arista Records can use the sound recording however they see fit. Still, they would need to obtain a license from Dolly Parton and her publisher to use the composition in another context, such as in a movie or a commercial.