Music licensing


Music licensing is the licensed use of copyrighted music. Music licensing is intended to ensure that the owners of copyrights on musical works are compensated for certain uses of their work. A purchaser has limited rights to use the work without a separate agreement.

Definitions

The following words and phrases appear in discussion of music licensing:
;license : the right, granted by the copyright holder or his/her agent, for the broadcast, recreation, or performance of a copyrighted work. Types of licensing contracts can include: 1) a flat fee for a defined period of usage, or 2) royalty payments determined by the number of copies of the work sold or the total revenues acquired as a result of its distribution. In addition to a basic fee, most music licensing agreements require additional payments to the copyright owner when the work in which it is included is financially successful above a certain threshold.
;licensor : the owner of the licensed work
;licensee : the person or entity to whom the work is licensed
;performance : the public performance of a musical piece, whether live or recorded, performed by the original artist or someone else, whether the performance keeps to the original version or is adapted or changed in some manner. Playing a music CD in public is "performing" the work.
;broadcast : playing live or recorded works, including radio, television, webcasting, podcasting, etc., to several listeners in a setting such as a bar or bookstore.
;performing rights organization : large companies that hold performance rights for copyrighted musical works. The best-known are American Society of Composers, Authors and Publishers, Broadcast Music Incorporated, Society of European Stage Authors and Composers, and La Asociación de Compositores y Editores de Música Latinoamericana, In the United Kingdom, the PRS for Music, and Phonographic Performance Limited for licensing recordings and music videos. The companies license public performance on a nonexclusive basis of the music they own or hold under contract using a complex weighting formula to distribute the fees to the respective rights holders. The license may be a blanket license, but individual licenses may be negotiated.
Rights organizations sample radio and television broadcasts, offer blanket licenses to broadcasters, and investigate complaints to detect and prevent unauthorized performances.
In the U.S., ASCAP and BMI hire field agents to monitor public performances. The field agents may act as agents for the organization, negotiating a fee for a blanket license, but individuals may negotiate directly with the organization. The fee may be presented on a take-it-or-leave-it basis, but in case of disagreement, the fee may be appealed to the Federal District Court in the Southern District of New York.
;pre-cleared music: music that is covered under a prior agreement allowing distribution and legal use under specific circumstances. The license may be for use in film, video, television, Internet, events in live venues, video games and multimedia productions.
;copyright : literally, 'the right to copy.' The owner of a copyright has five exclusive rights: reproduction, preparing derivative works, distributing copies to the public, performing the work publicly, and displaying the work in public. Prior to 1886, no effective international law of copyright existed. The first major international copyright law conventions were the Berne Convention for the Protection of Literary and Artistic Works created in 1886. In the U.S., for works created in 1977 and after the work is protected by copyright when it is "fixed in any tangible medium of expression," without the need to register it with the US Copyright Office. A work must be registered, however, before a copyright owner may bring suit for infringement.
;royalty free music : generally speaking, with royalty free music, the copyright owner has either waived their right to collect royalties, or have waived their right to collect additional royalties in exchange for an upfront payment.
;synchronization licensing : the licensing of musical works to be synchronized with moving pictures as background in a motion picture, television program, video, DVD, etc.
;master use licensing: the licensing of the recording of a musical work to be performed as a soundtrack, bumper, lead-in or background to a motion picture.
;publisher : for the purposes of copyright, a publisher is the owner of the copyrighted work. It is now standard practice for songwriters of even the slightest prominence to form a publishing company as a separate legal entity to hold the rights to their work. Continued use of the, now somewhat anachronistic, term "publisher" reflects the state of media at the time of the Berne Convention, when all music distribution was done on paper as sheet music or player piano rolls.

Broadcasting

Broadcasting, in the context of music licensing, means the playback of recorded or live music for groups of people beyond what might be normally expected in a social setting. Legal claims are filed frequently against bookstores, bars, and live music venues that broadcast music without first obtaining a performance license.
The music broadcast in grocery stores and elevators is a service purchased from one of many organizations that offer it. Part of the fee paid for the service is used to cover licensing costs. Except in very narrowly defined circumstances, noted below under the "small business exception" in 17 USC 110, a business, restaurant, or store that plays radio broadcasts or shows television programs in the premises does not pay a licensing fee.
Radio stations pay fees to licensing bodies for nonexclusive rights to broadcast music. Radio stations and businesses typically pay a flat rate once a year, called a blanket license, which can vary based on the size of the audience, value of the advertising revenues, and amount and nature of music usage. As part of the license contract a radio station may conduct periodic audits of the music being played, with the audit results submitted to the licensing bulk.
Broadcasting pre-recorded music at live events at outlets larger than stores or restaurants, such as stadiums, arenas, or parks, is covered under United States Copyright Law through a "blanket license" that obtained from one of the performing rights organization, such as BMI or ASCAP. These are compulsory licenses that are held by the PROs, and typically offered based on a per-attendee cost per song, paid to the PRO, which then distributes the royalties to the artists.
In 2012, both BMI and ASCAP introduced a new type of blanket license for political-based events such as campaign rallies called a "Political Entities License". While similar to the blanket license for broadcast of pre-recorded music at large public events, it gives the artists the ability to disallow the use of their music for specific political functions.

Home media

Licensing issues are encountered when TV shows or films using copyrighted music are released on both DVD and streaming formats.
When a song is cleared for usage on a TV show, historically to save money, the clearance typically applies only to TV airings of the show in question. Thus, when the show is considered for DVD distribution to the home video market, the rights to the song must be renegotiated in order for the song in question to be included on the DVD. Most producers/production companies now include the rights for DVDs or "all media now known or hereafter devised," which assures production companies of the right to re-release without incurring additional licensing fees.
If the process of clearing the rights to the song is prohibitively expensive for the home video distributor, or clearance is rejected by the copyright holders of the original song, the affected song is either replaced with a similar one, or the footage containing the copyrighted song is edited out. In a few cases, TV shows, with extensive use of copyrighted music whose cost of "after-market" licensing is high, are withheld from release on DVD; notable examples include The Wonder Years, Murphy Brown, Happy Days, WKRP in Cincinnati, Third Watch, Cold Case, Popular and MTV's Daria, some of which were eventually released after long delays. Sony Pictures Home Entertainment cancelled the planned October 2007 DVD release of Dark Skies for that reason, but it was finally released on January 18, 2011 through Shout! Factory.

Live performance

Live public performances of musical works are typically licensed in the United States, as "public performances" is one of the six "exclusive rights" listed in 17 USC 106. In the U.S., the owner of a bar, cafe, or restaurant who wants to have live music played in their establishment, commonly obtains a blanket license from ASCAP & BMI to play copyright music listed in their catalogues. Because ASCAP, BMI, , and SESAC have non-overlapping collections, a license from one entity does not provide a license to play music from the other entities.
The Association for Concert Bands offers a blanket license to community bands that covers both ASCAP and BMI lists. At the end of the year, a community band completes a spreadsheet showing how often each song was played during the year, which the ACB submits to the rights organizations.
Public performances of works in the context of dramatic works are separately licensed; these licenses are called "grand rights".

Performance Licensing

In general, someone who plans to perform a piece of music publicly will obtain a "public performance" license from the rightsholder. Purchasing a copy of the sheet music does not itself usually provide public performance rights.
Developing one's own arrangement of the music is considered a derivative work, which would ordinarily require a separate license. The derivative work is itself copyrighted, but if the original work is under copyright, then permission of both the composition's rightsholder and of the arrangement's rightsholder is needed before performance, distribution, or recording is planned. An arrangement of a traditional song or piece of music will be protected by copyright even if the original piece is in the public domain. For instance, ASCAP has over 40 arrangements of Beethoven's "Moonlight Sonata" under license, and nearly 80 versions of Row, Row, Row Your Boat.
In the United States, limitations and exceptions to performance rights include fair use and the performances described under Section 110 of the US copyright statute The fair use limitation defines uses that are not "infringements", based on consideration of factors such as how the original work was used, the nature of the original work, how much of it was used, and if the original rightsholder suffered economic harm.
In spite of folk wisdom to the contrary, there is no "three second rule" for copying or sampling recorded music. There is no rule that "four notes" can be copied without penalty. Instances under the fair use exception might include criticism or comment. Criticism need not be negative: if a jazz soloist quotes a phrase from a well-known solo by another player, it might be viewed as an homage. Music sampling has been aggressively pursued by copyright holders as a form of "free riding" but might be interpreted as a transformative use.