MUSIC LICENSING BASICS

So you want to license music. Music licensing is a particularly complicated area of copyright law. A big part of why it’s so complicated is that there are two copyrights in every piece of music – one for the composition, i.e. the music and lyrics, and one for the performance of the song.

Here are a few things to work through during the process.

1. What song(s) do you want to use? It’s important to identify exactly which songs you want to license – especially because each song may belong to different composers and labels.

2. Is the song in the public domain? Any song composed prior to 1923 is in the public domain and you do not need to acquire a license for that composition. The performance of the song, however, is tied to the date of the recording and may still be protected by copyright even if the underlying song is in the public domain. In other words, The Entertainer by Scott Joplin (written in 1902) is in the public domain, but the performance of the song by Marvin Hamlisch in the 1973 movie “The Sting” is not.

3. Is use of the song a “fair use”? If you’re using the whole song, probably not. In any event, this is a complicated area and you shouldn’t assume that your use of the song is one that falls under fair use unless you’ve talked to a copyright lawyer, even if you’re not making any money from the use or even if you are using it with a non-profit organization.

4. Who wrote the song? Are there multiple songwriters? The composers of the song retain many licensing rights. Often there are multiple songwriters and they each retain partial interests in the song. Practically, this means that you may need to obtain permission and/or pay royalties to multiple songwriters (who may be represented by separate publishers, i.e. more licenses).

5. Are you performing a composition or are you using a recording of someone else’s performance? If you are “covering” someone else’s composition, then you only need to obtain a license from the composers. If you are licensing, broadcasting, distributing, etc. someone else’s performance, then you need to obtain permission from the performer or the performer’s representative (likely the record label) as well.

Page 1 of 4 6. Are the composers of the song signed to a contract by a music publisher? Most established performers have signed a contract with a music publisher to administer their royalties. If so, you will likely have to obtain licenses from the publisher, not the composer.

7. Have the composers of the song registered with ASCAP, BMI or SESAC? ASCAP/BMI/SESAC are the performing rights organizations (“PROs”) in the United States and they collect and distribute royalties for public performances of music, whether through TV/Radio broadcasts, live performances, background music in retail stores, or through YouTube. Most established artists register their music with these organizations and rely on them to license any public performances. It’s possible to obtain a direct license from an artist for use of a particular work, but this is rarely done.

8. Are the performers of the song signed to a record label? Most established performers have signed a contract with a record label to produce their music. If so, you will likely have to obtain licenses from the record label, not the performer.

9. How do you want to use the song? There are different licensing schemes for use on different platforms.

a. Radio Broadcast: For broadcast of music on a traditional terrestrial radio station, a radio station typically obtains a “blanket license” from the PROs. This allows the radio station to broadcast any music licensed by the PROs for a single flat rate.

b. Audio Streaming: For internet/mobile broadcast of music either through a music service (e.g. Pandora) or as a simulcast with a traditional terrestrial radio station, you need a blanket license from the PROs (as with a traditional radio broadcast) and also you must pay digital performance royalties to Sound Exchange (which are royalties that are paid to the record label).

c. On Demand: Blanket licenses from PROs do not apply to on-demand music broadcasts, i.e. a digital jukebox (e.g. Spotify). These uses require specific licenses from the applicable record labels and the applicable music publishers.

Page 2 of 4 d. Live Performance: If the performance is public, then the only license required is the license from the PROs. Only one party associated with the performance needs to have the public performance license, i.e. if the venue has this license, then neither the artist, promoter, nor the sponsor need to also have a license.

e. Other Public Performance: If the performance is to the public, e.g. as background music in a coffee shop, you need a license from the PROs, but no other license. If the performance is not public (e.g. at home), no license is required. The Copyright Act does not provide a satisfactory definition of what is “public.”

f. CD, Digital Download, etc.: Any license for the manufacture of CDs or similar media and/or the distribution of music as a download to a storage device, e.g. iTunes, requires a mechanical license. A licensee can either acquire a license directly from the music publisher or obtain a compulsory license (a license that doesn’t require consent) and pay the statutory royalty rate established by the Copyright Office. All royalties for compulsory uses are paid to an entity called Harry Fox. If the work is a “cover”, then this is the only license required. If the work also includes a performance, then you need to acquire a “Master Use” license from the label for the performance as well.

g. As Part of an Audio-Visual Work: Any use of music with an audio-visual work, i.e. a movie, video, television program, etc. requires that a licensee obtain a synchronization license from both the music publisher and the record label. This is the only license required to produce the audio-visual work. Any public broadcast of the resulting work, however, e.g. through YouTube, on TV, etc. would also require a payment to the PROs for the public performance. Such payment would be covered by the broadcast network or station’s blanket license.

10. Have you thought about how you want to use it in the future? Think again if you’ve gotten all of the rights you need. It’s much easier to get those rights all at once. Many music licensing problems occur because the licensee wants to use the music differently than originally contemplated, i.e. the music was licensed for a website, but now the licensee wants to include the music in a companion television show.

11. How long do you want to use the song? Many music licenses are bound by time. In other words, you only have the right to use the music for a limited time. This is especially true for any use of music for promotional or advertising purposes.

Page 3 of 4 12. Do you want to use the song exclusively? It is possible that you can obtain exclusive rights to use the song, either exclusively across all platforms or exclusively for specific use cases. Any negotiation for an exclusive right will almost always require a higher payment.

13. How are you paying for the song? Will you be paying for the rights on a flat fee basis, on a per use or per sale basis, a percentage of revenue, or some other method? Flat fees have the advantage of simplicity. Revenue share requires less of a payment up front, but requires more extensive accounting.

14. Do you want to edit, re-mix, or modify the song in some other way? Any right to edit or modify the song or the recording will need to be specified in any license.

15. Will you be promoting the use of the song or the artist? Any advertising or promotion of the song, use of the artist’s name or persona, use of accompanying artwork, suggestion of an endorsement by the artist of your organization or one of your sponsors, etc. must be explicitly licensed, typically from the artist or the artist’s management company.

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