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FAQS

Music Licensing 101 by Monica Corton

Music Publishing

Q1

What is a copyright?

A copyright is a legal right to protect an expression of an idea created by a person or several persons from unauthorized use or copying. That expression can take many forms. It can be music, music with lyrics, books, pictures, photographs, motion pictures and videos just to name a few. For the purposes of this discussion, a copyright will be considered to protect music. The music can be music alone or music with lyrics. Most references and explanations will relate to music in the form of a song and the creators of the song as songwriters because most people who are interested in licensing music are interested in licensing songs. This should not be confused with copyrights that protect the sound recording of a song. The sound recording has a separate copyright. Sound recordings are the actual recordings of an artist’s rendition of a song and they require a separate license.

Q2

How do you register a copyright with the Library of Congress?

In the United States, the creator of a song owns the copyright to that song immediately upon creating it and can claim it as his/her work as long as it is fixed in a tangible medium. The tangible medium can be either a printed or hand written representation of the song called a “lead sheet”, or it can be an audio recording of the song. In order to officially document that you are the creator of a song you must register the song with the Library of Congress. This registration provides notice to the public that the creator of the song has made a public record that shows ownership. The process involves a fee (currently $35.00 per song) and a form called a “Form CO” (formerly it was a “Form PA”). This form is used to register works of the Performing Arts which is the classification for musical works and it provides benefits in seeking to enforce a copyright in court. The fee and the Form CO must be accompanied by a lead sheet and/or recording of the work so that the Library of Congress can have a tangible record of the song for which you claim copyright protection. These should be sent to the Register of Copyrights, Library of Congress, Washington, D.C. 20559. There are different copyright forms which are used to protect other types of copyrights. For more information on registering copyrights, go to the Copyright Office home page (http://www.copyright.gov) or visit the registration/forms page at (http://www.copyright.gov/forms).

Q3

What is a published work?

The term “published” is antiquated, at best. Published music initially meant what everyone thinks, music in the form of sheet music or music in a printed, tangible format. Sheet music was the principal way songwriters made money from their music prior to the creation of technological products and services which allowed for new and different types of transmissions and distributions of music, i.e., radios, televisions, motion pictures, record players, cassette players, DVD players, the Internet, etc. A songwriter would bring his/her new song to a print publisher and they would enter into an agreement to allow them to share in the income derived from the sale of the printed version of the song. Today, a songwriter seeks out a publisher for the purposes of “publishing” his/her music, but the publisher now represents and exploits every type of musical use which has evolved through the development of new technologies. The following is a breakdown of the four areas in which a publisher collects and licenses a published work of music:

Q4

Public performing rights?

A public performance of a musical work includes the right to transmit music over the radio, free television, basic and pay cable television, the Internet, department stores, supermarkets, restaurants, stadiums, concert halls and any other public area imaginable. Public performances of music require that music publishers and songwriters be compensated for transmissions to the public or for performances in a public forum. Those who wish to transmit music must obtain a performing rights license. Yes, that's right, THE MUSIC YOU HEAR ON THE RADIO, TELEVISION AND IN EVERY STORE YOU SHOP IN IS NOT PLAYED FOR FREE! Are you surprised? Well, there is a very simple explanation. Every time you are listening to music there are many people making money from that performance. For example, the music you hear on the radio is made possible from the millions of dollars broadcasters of the radio programs receive through agreements with advertisers. The principal way they attract the biggest amount of advertising dollars is by the ratings they receive which indicate the numbers of people who listen to each station. And why do people listen to one station over another? People listen to hear a specific genre of music. Therefore, publishers and songwriters are compensated for the use of their songs through performing rights licenses which are secured between them and the different types of broadcasters of music.

Q5

ASCAP, BMI & SESAC

Public Performing Rights are licensed in the United States by three organizations, ASCAP, BMI and SESAC. These organizations, known as “performing rights societies”, monitor musical performances which emanate from the United States. Additionally, ASCAP, BMI and SESAC have reciprocal agreements with other performing rights societies all over the world. These reciprocal agreements allow performing rights societies in other countries to license and collect money on behalf of the members of ASCAP, BMI and SESAC. It also allows ASCAP, BMI and SESAC to collect and license music on behalf of the members of foreign performing rights societies if the performance occurs in the United States.

A songwriter’s membership in ASCAP or affiliation with BMI or SESAC is exclusive to that particular performing rights society. Therefore, a songwriter who is a member of ASCAP cannot also be an affiliate of BMI or SESAC. The performing rights societies are structured so that both a songwriter and his/her publisher have separate and direct membership. Income generated from performing rights licenses is split 50% to the songwriter and 50% to the publisher by the performing rights societies and paid directly to the songwriter and publisher. This is a different payment structure from all other types of music licensing where the income from music licensing is sent to the publisher who thereafter pays the songwriter his/her share of the income.

Songwriters generally choose which performing rights society they want to join prior to signing a publishing agreement. Most publishers have affiliated companies with each performing rights society. When a publisher enters into an agreement with a songwriter, the publisher registers the songwriter’s compositions with the appropriate performing rights society (e.g., a BMI songwriter needs to become affiliated with a BMI publishing company). The important thing to understand is that ASCAP, BMI and SESAC act as agents on behalf of songwriters and publishers with regard to performance rights ONLY. We stress this because many people confuse the role of ASCAP, BMI and SESAC thinking that they have jurisdiction over all types of music licensing.

Performing rights societies are an excellent source for information to locate publishers. If you know the performing rights society of the publisher and/or songwriter of a song, you will be able to obtain the address and phone number of the publisher from the performing rights society. If you don't know the affiliation, you can search in the database of each society to try to locate the song title and/or songwriter.

The label copy of most CDs often contains information regarding the performing rights affiliation. This information is usually printed immediately following the publisher information. Once you have found the name of the publisher and songwriter from the CD label copy, you may search the ASCAP, BMI or SESAC websites for information. It is critical for you to know the songwriter(s), because there are many song titles with the same name. It is the songwriter information that makes the song unique.

ASCAP website - www.ascap.com

BMI website - www.bmi.com

SESAC website - www.sesac.com

Q6

Mechanical rights

Mechanical rights and royalties are those related to the AUDIO ONLY reproduction and distribution of a musical work. It is called mechanical because this right originally came into practice with the sale of player piano rolls. Due to the mechanical nature of this type of product where the piano roll would allow the piano to direct itself in the playing of a particular piece of music, the name “mechanical” seemed to fit. Through history, the term “mechanical” has applied even with the development of new technologies which have increased the amount of products and media which require a mechanical license. The mechanical right today is primarily associated with the sale of CD’s and the downloading of music on the Internet, but newer products are always being developed that also require a mechanical license.

The unique aspect of the mechanical right is that it is the only music right where the amount of compensation to the publisher and songwriter is regulated by the United States government. The statutory rate for a mechanical license as of January 1, 2010, is $.091 for up to five minutes worth of music. This is the rate that all songs under five minutes in length receive on any particular album or single unless the record company negotiates with the publisher of the song for a rate that is lower than that set by the government. So, out of the $10 - $18 you pay for a CD, each song on that CD which is under five minutes in length will receive $.091 per unit sold which will be sent to the publisher for payment of the right to mechanically reproduce and sell that song in the form of a CD.

There are fluctuations in the rate if a song exceeds five minutes in length. For such songs, the rate paid is $.0175 multiplied by the amount of minutes of play (which is always rounded up to the next highest even number). For example, a song that is 6:30 in length would be considered a 7:00 song. The rate is calculated as 7 x .0175 = $.12. If a song exceeds five minutes in length by even just a few seconds it is still considered a 6:00 song so timing plays a key factor in mechanical licensing. Additionally, the statutory rate of a song is determined by the rate during the year of manufacture of the record. Therefore, the statutory rate of a song on a CD manufactured and released in 2005 is different from the same song manufactured and released on a CD in 2010.

Another unique feature of the mechanical right is that once a song has been recorded for the first time with the consent of the publisher, thereafter anyone can record the song in its original form (i.e., no changed lyrics) without consent of the publisher as long as he/she obtains a mechanical license and pays the mechanical royalty per unit sold at the statutory rate.

A publisher can issue a mechanical license directly to any party seeking a mechanical license. However, the principal agency in the United States which handles the bulk of mechanical licensing is The Harry Fox Agency (HFA). In addition to the responsibility of licensing almost all of the mechanical licenses issued from records released in the United States, HFA also monitors, receives, and distributes the money which is collected in the rest of the world for mechanical licenses issued for copyrights owned or controlled by United States publishers who are members of the HFA. This is similar in structure to the reciprocal licensing discussed with regard to performance rights licensing, however, many US publishers have sub-publishers who represent them in foreign territories for licensing. If a US publisher has a sub-publisher in a particular foreign territory, that sub-publisher would collect the mechanical royalties in that territory (see What is a sub-publisher).

The following is the contact information for The Harry Fox Agency:

601 West 26th Street, 5th Floor

New York, NY 10001

Phone: 212-370-5330 Fax: (212) 953-2384

If you would like to learn more about The Harry Fox Agency/National Music Publishers’ Association, please click below.

Q7

Synchronization rights

Synchronization rights and royalties are those related to the use of music which is “synchronized” (i.e., recorded in a timed relation with) to visual images. The types of uses which require a synchronization license (often called a sync license) include music used in a motion picture, commercial, television show, home video, DVD, laserdisc or any other medium which utilizes an audio-visual use. Sync licensing is the hardest to describe because there are no steadfast rules governing the license fees, i.e., the industry standard varies based on what the market can bear, and it is the least obvious type of license. Most people watching a movie understand that the artist singing a song which is included in the movie should be paid for that use but would not readily understand that the publisher and songwriter of the song must also be compensated for this use. Sync licensing allows for the most variables with the terms of the licensing agreement making it slightly more complex than other types of licensing. Factors such as timing of the musical use, territory, term, and nature of the musical use play a part in determining the fee. There is no particular agency responsible for sync licensing. The determination of the fee and structure of the license rests with the publisher. Please visit the How to License Our Works section to find out the information we require for specific types of synchronization licenses.

Q8

Print rights

Print rights and royalties are those related to the sale or use of any material which is a visual representation of a piece of music. The principal type of products requiring a print license include sheet music and books of sheet music, called folios. However, any representation of a song in a visual medium requires a print license. Some areas which require print licensing that are less obvious include lyrics reprinted in a book or magazine, karaoke lyrics printed on a screen for home or public use, and computer programs and games which utilize a lyric reprint of a song. All print rights are licensed directly from the publisher. Many publishers enter into exclusive print agreements with companies which specialize in print music. The four print companies usually associated with the manufacture of popular music are Cherry Lane Music Group, Hal Leonard Corporation, Music Sales Corporation and Alfred Publication Co.

If you need to negotiate a license which has a print element, the best way to acquire this right is to go directly to the publisher who then can refer you, if necessary, to their print publisher.

Q9

What is a co-publisher?

The description of music publishing thus far has been presented in its most basic form. For example, one publisher who publishes one songwriter’s song. In order to understand how this all works, you need to understand how the money generated from music licenses is dispersed. In monetary terms, the most basic situation works like this:

A check for $100.00 is sent for royalties earned (with the exception of performance royalties which are paid directly to each publisher and songwriter by either ASCAP, BMI or SESAC) on a song the music publisher owns and was written by one songwriter. This money is divided as follows:

$100.00 is split: $50.00 to the publisher and $50.00 to the songwriter.

Suppose that there were two songwriters on this song who contributed equally to the song’s creation. Now the money would be divided as follows:

Suppose that there were two songwriters on this song who contributed equally to the song’s creation. Now the money would be divided as follows:

$100.00 is split: $50.00 to the publisher and $25.00 to one writer and $25.00 to the second writer.

Now, suppose that there are two writers, but one songwriter really didn’t contribute as much to the writing. The two songwriters have decided that the first songwriter should receive 75% of the songwriter’s share and the second songwriter should receive 25% of the songwriter share. Now the money is divided as follows:

$100.00 is split: $50.00 to the publisher and $37.50 to the songwriter who has a 75% interest (this is calculated by multiplying the songwriter share of $50.00 by 75%) and $12.50 to the songwriter with a 25% interest.

Confused yet? Wait, it gets better. Many songs do not have just one publisher. Instead, they have two or more publishers who CO-PUBLISH the song. For simplicity sake, lets assume there are just two co-publishers and one songwriter. The income is divided as follows:

$100.00 is split: $25 to publisher #1, $25 to publisher #2 and $50.00 to the songwriter.

In this scenario, the co-publishers controlled equal shares of the publishing. However, THIS IS NOT ALWAYS THE RULE!! Publishing splits can be unequal like the unequal writer split which was described above. You must check with each co-publisher to find out the exact split for any song that is co-published and make sure both publishers agree on these splits.

Monetarily, it is not hard to understand co-publishing. It is the intricacies of who controls what that can get a bit difficult when it comes to licensing. Some co-publishing agreements allow for one publisher to be responsible for all licensing and then account to the other publisher and songwriters. This publisher is known as the “sole administrator”. Other co-publishing agreements allow each publisher to license their share directly and collect directly on behalf of themselves and the songwriter(s) they represent. These publishers are known as “co-administrators”. Licensing problems can occur when the splits between the publishers have not been worked out. Be careful when licensing co-published works. You should double check with all parties to ensure that everyone agrees on who owns what and who should be paid for licensing.

Q10

What is an administrator?

Some publishers choose to have a third party, an “administrator”, deal with the business of licensing their music, collecting licensing fees, and paying royalties to songwriters. In essence, the administrator acts as the publisher in every way except he/she does not get to retain all of the money that the publisher is entitled to receive. Administrators generally get a commission of 10% to 20% of the gross income generated. For an example, assume there is an administrator whose commission is 15% and he/she represents a song with one publisher and one songwriter. The same $100.00 is sent to the administrator for royalties on this song.

$100.00 x 15% administration fee = $15.00 admin. fee and $85.00 to the publisher and songwriter.

$85.00 is split: $42.50 to the publisher and $42.50 to the songwriter.

Some songwriters’ agreements with their publisher stipulate that if the publisher uses an administrator, the songwriter’s royalties shall not be calculated after the deduction of the administration fee. Therefore, the publisher must absorb all of the administration fees. In this scenario, the royalties are distributed as follows:

$100.00 x 15% administration fee = $15.00 admin. fee and $85.00 to the publisher and songwriter.

$85.00 is split: $35.00 to the publisher and $50.00 to the songwriter.

Q11

What is a Sub-Publisher?

A sub-publisher represents a publisher in a foreign territory. A song published in the U.S. will need representation throughout the rest of the world because many U.S. copyrights are popular in foreign countries. It is critical for a publisher to be represented by a local foreign sub-publisher in order to receive effective representation abroad. Each territory has its own performing and mechanical rights societies to which the local publishers are affiliated. The compensation to a sub-publisher is similar in structure to an administration agreement. A U.S. publisher can choose to be represented by one of the major music publishers where a single sub-publishing agreement is entered into from their U.S. office. They thereafter have their foreign affiliates sub-publish in their relevant foreign territories. If a U.S. publisher chooses not to be represented by a major, he/she can enter into separate direct agreements with different sub-publishers in specific territories.

Licensing

Q1

How do you find the music publisher?

As discussed in the previous section (go back and read it if you skipped ahead to this section), the music publisher is the primary entity you need to locate for any type of permission to use a song. The first task is to determine who the publisher of the song is. If you are unable to locate the name of a publisher from a CD or the end credits of a motion picture, you can locate them by searching the Web sites of ASCAP, BMI or SESAC. For more information on this, please refer to the section on Performing Rights.

Q2

What elements make up a music publishing license?

All music licenses with the exception of performance licenses are structured basically in the same way. The first part of the license contains information specific to your needs. These are called the “variable terms” because they vary from license to license. The remainder of the license contains terms that all music licenses usually contain, i.e., “boiler-plate” terms. You will find that each company you deal with has boiler-plate language that is worded differently, but the essence of the language is similar among music publishers.

The following describes the different elements that make up the variable terms in a music license:

  1. Type and Nature of the Use of the Music: What is the amount of time of the music you would like to use? For example, do you require a ten (:10) second use or a full use of the song? How is the music used? Is it a background use (called a background vocal or background instrumental) where the music serves as a backdrop to add atmosphere or is it a visual use (called a visual vocal or visual instrumental) where you see the source from which the music emanates (sources include performers, radios, jukeboxes, etc.)?

  2. Term: This is the duration of time for which you need the music license to last. Do you need a five year license, ten year license or do you need a license in perpetuity (a license that runs forever)?

  3. Territory: This is the area you would like permission to distribute or transmit your product. Do you want a license for a specific geographic city or area, the United States and/or Canada or the World?

  4. Rights: These are the music rights you need from the publisher. Does your product involve a single right (i.e., Is it an audio-only product requiring a mechanical license?) or does it involve multiple rights (i.e., Does the product involve an audio-visual use and a print use where you would need to secure both synchronization and print rights in your license?) Also, in what medium(s) will your product be distributed, i.e., television, Internet, theatrical, motion picture, video, CD, DVD etc.? Generally, music rights are granted on a non-exclusive basis.

  5. Lyric Changes: Have you changed the lyric of the song? If so, are they potentially objectionable? You must always advise the publisher of any lyric change you plan on making when requesting a quote for a music license and submit those changed lyrics with your request.

  6. Options: Options are clauses that are built into a license which allow you to modify your original negotiations, i.e., to distribute your product in a different manner or extend the term of a license. Options are exercisable upon payment of additional option fees. These fees are negotiated when you originally secure the license. Even though the date of exercising an option is undetermined, there usually is a maximum window of two years after the execution of the original agreement for you to exercise any option. An advantage of option clauses is that they permit the person or company obtaining a license (the licensee) to pre-plan for the growth of the product without having to pay for these rights when initially entering into the licensing agreement. For example, a common option among television producers in synchronization licenses is the option for the right to distribute the television program as it was released on television in the form of videos. The fee for this right is negotiated when the original license is negotiated, but the option to actually pay and obtain the video right is exercised at a later date within the first two years of the term of the original license. Many licenses include options for extended terms, extended territories or extended platforms for distribution.

  7. Compensation: Compensation is the amount of money the person or company agrees to pay to the music publisher for the right to use music. Compensation can be structured in two ways: royalty-based or buyout. Royalty- based compensation is where the music publisher is paid money up front, an “advance”, against an agreed upon royalty per unit sold. The advance is recoupable against future sales and functions as a guarantee for the music publisher that a minimum amount of compensation will be given for the right to use the music. For example, suppose you have a product that the publisher has agreed to license at the royalty of $.15 per unit and requires an advance on 5,000 units. The advance will be $750.00 (i.e., 5,000 x $.15) and any sales that exceed the initial 5,000 units will be paid at the same royalty rate and will be accountable to the publisher in either quarterly or semi-annual royalty statements. A royalty-based compensation can also be reached without paying an advance to the music publisher, but such agreements are much less common.

    The second type of compensation, a buyout, is a one-time fee for the right to use the music. Generally, music publishers will not agree to buyouts. The reason is very simple and relates to the other types of licensing discussed in Chapter 1. If a company plans on selling a product which includes copyrighted music, chances are that music is an integral part of the product and adds value to the product. Therefore, the music publisher feels they should share in the income generated by the sale of the product. The only way to safely accomplish this is by licensing on a royalty basis as one never knows how successful a product will be. This is particularly true in the area of multimedia licensing where the market is so new and ever-changing that there is no way to predict potential future sales. If you must try to obtain a buyout, you may have luck in negotiating a “limited buyout” where you pay one fee but it is for a very limited term (e.g., one year) or a limited amount of product (e.g., 25,000 units). After you have exceeded the limited term or the sale of the 25,000 units, you can re-negotiate to extend your agreement or possibly you can exercise an option for this purpose. In this way, the limited buyout is a hybrid of a royalty-based license and a buyout license because by limiting the term and/or units, in effect you are monitoring sales like a royalty-based license while paying lump sums like a buyout license.

Q3

How to present your request for a license to a music publisher?

The music publisher is going to want to know as much information about your product or service as possible in order to determine whether they want to grant a license and if so, under what terms. The more accurate and complete your request letter is, the sooner you should get a response from the publisher. The following is a list of the items and descriptions that should be included in your request letter:

  1. The song title, songwriter & publisher name.

  2. The name of the product or service you plan to market.

  3. The name of the distributor or producer of the product.

  4. The retail selling price and the wholesale selling price or in the case of an Internet site, the projected income (from advertising and/or user fees) of the site.

  5. The territory you would like to have covered in your license.

  6. The term of the license (the number of years you would like to have permission).

  7. The total number of units you plan on initially manufacturing.

  8. The medium you plan on releasing (video, Internet, CD, DVD, etc.) and the number of units you plan on initially manufacturing in each medium.

  9. The total number of copyrighted songs you are attempting to license.

  10. The timing of the music use and nature of the use. (Is it background or visual, instrumental or vocal?)

  11. Detailed description of how the music is used and in the case of multimedia, how the user interacts with the product with regard to music. (Can you print lyrics, can you listen to music, can you copy the music and send it to someone else, and can you change elements of the music?)

  12. Is all the music in your product used in the same way? If not, how are the other musical elements used?

The following are TIPS for successfully negotiating music licenses:

  1. Make sure you are only asking for rights that you really plan on using. Do not ask for permission for the world if you do not plan on distributing product to the world. Many people mistakenly believe it is better to try and obtain very broad rights, e.g., permission for the world in perpetuity. A quote for a license that has limited terms e.g., a five year license for the United States only, and one that asks for everything under the sun can differ substantially.

  2. Be very clear in your request letter in describing exactly how you plan on using the music you wish to license. This is especially true when it comes to any kind of multimedia or Internet licensing. If your music use is used in a multimedia format but does not allow for interactivity you should specify so. You will have an easier time clearing rights for a product that is non-interactive.

  3. Make sure you are prepared with substitutions if the song you want is denied permission. Also, substitutions may be necessary because the song you wish to license is too expensive for your budget. Music publishers are always trying to exploit their entire catalog. If you are unable to secure the #1 hit song maybe the #5 hit song is standing in the wings ready for easy access licensing.

  4. Leave plenty of time for clearing music licenses. It is a time-consuming procedure so you need to start early if you intend on using music. This is the number one mistake that new music licensees make regarding music licensing. They generally wait until the end of the production process without appropriately budgeting for music. Music can drive a product like no other type of content so it is worth planning your music uses early.

Q4

Songwriter/Publisher approvals

The process of licensing music is not something that will happen quickly. Make sure you leave plenty of time for licensing and have back-up song selected because you will not get permission for every song you wish to use. The reasons for being unable to obtain a license are varied and do not always hinge on being able to agree on a license fee. One of the key areas where permission breaks down is songwriter/publisher approvals. This is a process where a songwriter or publisher decides that he or she does not creatively want to allow you to use his or her song. Generally, the more popular the songwriter, the more difficult the approval process can be. Some songwriters are worried about having too much commercial exploitation. They feel that this sort of licensing of their material will negatively affect the integrity of their work. Objectionable material or material that could somehow place a negative light on their reputation or diminish their song’s value is often a difficult area to clear for permission. Not all songwriters are this particular and some songwriters do not even have approval rights, but you can never stake your product’s success on one song. You must have options.

If you are determined to have a particular artist’s music, you may be able to get around an approval problem by picking a song the artist performed but did not write. The bigger the publisher, the more staff they may have to help give you these suggestions. The best people to contact for alternate song titles are often located in what is called the “creative department”. The people in the licensing department of smaller companies, often also function as the creative department. Do not be afraid to ask for suggestions from the publisher for alternate songs to license should you receive a denial on permission.

Q5

Music publishing licenses vs master-use licenses

This document has dealt exclusively with music licenses which are issued by a music publisher. Do not confuse these licenses with Master-Use licenses. Master-Use licenses are those issued by record companies for permission to use the specific recording of an artist’s rendition of a song. For example, in our office we represent the music publishing catalog of Harry Belafonte. This catalog includes songs he wrote and/or owns. When someone comes to us for a license for one of these songs, we give them a license to use the song. If they also want to use the song as recorded by Harry Belafonte, they must obtain the Master-Use license from his record company. Many times people will license the song from us but re-record it with a different recording artist or studio musician. Then they do not have to obtain a Master-Use license because they are creating their own master.

Q6

Performance licensing on the Internet

One of the most active areas of licensing is performance licensing. All sound transmissions broadcast to the general public require some form of a performance licensing. There are two basic ways to transmit music. The first way is streaming audio where the music is sent and heard at approximately the same time. This type of transmission does not allow the person receiving the music to save the music. The second type of transmission which is sent in different types of audio files can be downloaded, saved and replayed. A music file that can be downloaded and saved requires a performance/mechanical license because these types of transmissions include both rights as a saved file allows you to keep a copy of the music. Performance/mechanical licenses fall into the category of multimedia licenses and must be negotiated directly with the music publisher.

ASCAP, BMI and SESAC, the performing rights organizations in the United States, have devised specific agreements which address the use of performance rights licensing of music. These licenses are “blanket licenses”. A blanket license requires the payment of an annual fee which allows the Licensee unlimited use of any repertoire in either the ASCAP, BMI or SESAC catalogs. You must apply directly with each organization for these licenses. They vary in structure especially as to how the licensing fee is calculated. These “rate formulas” determine the rate of your blanket license and are developed to accommodate the variations in uses and revenues generated from those sites.

The variations in services between sites and even within a site can make the licensing of music a complicated issue. The following is a list of the types of sites which exist on the Internet:

  1. A site that is supported by user fees.

  2. A free site, non-profit.

  3. A mixed site, which is partially free and partially paid by user fees.

  4. A site supported by advertising.

  5. A site that serves as a promotion site for a company’s products and services, e.g., X Car Company has a free site that promotes its cars and potentially leads to the sale of cars which are not given away for free.

  6. A merchandising site where the site sells information online or directs you to order product which will be mailed to you but was secured through a transaction online.

  7. A site which combines several or all of the above elements.

There are also several ways to utilize and transmit music within a site. These include:

  1. Music is used throughout the site.

  2. Music is used in certain spots on the site as a highlight or added value.

  3. Streaming technology where music is sent via streaming transmissions.

  4. Downloadable music where you can copy a music transmission to your hard disk or a floppy disk and repeat the performance of the music as if it were a CD or cassette.

  5. Combinations of several or all of the above elements.

ASCAP, BMI and SESAC have each tried to address all of the above issues in determining a fair rate schedule which can accommodate the wide assortment of variables. The blanket license is re-evaluated at the end of each year to see if the music uses which were initially described and licensed have remained the same. This is an important feature because it is extremely common for web sites to be updated and changed in order to retain a client base who will continually visit a site.

If your Web site does not have an extensive amount of music but only a few songs, it might be easier and more economical for you to obtain a performance license directly from the music publisher(s) of the song(s) you would like to use. Be very specific when sending your request letter to the music publisher about how the music is used on your site. Please refer to the Licensing Request page to make sure you include all of the necessary information in your request letter.

Q7

Multimedia licensing

Licensing all other rights beyond performance licensing (e.g., mechanical, synchronization and print licensing or combinations of two or more of these rights) is a more complicated process. These licenses are wholly new and have to be formulated. If you plan on requesting a license that will allow multiple rights to be delivered to users, be prepared for much scrutiny. You will have to accurately describe all of the features that will be allowed by a user. If there is no way to contain the copying of the music, it is doubtful you will be able to secure a license. Without these safeguards, in effect you are asking a music publisher to condone the transfer of music for free.

The first step in licensing for multimedia products is determining what rights you actually need to license. If you have downloadable sound files where you can save the music to a hard drive or a floppy disk, the license you need to obtain is some form of a mechanical license. Probably it should include some type of performance rights language also. The fees for this type of mechanical license may come under the compulsory provisions of the Copyright Act for mechanical licensing (please refer to the chapter entitled Mechanical rights to learn about the compulsory rates for mechanical licensing) or may be determined by each publisher individually.

If you have a video or movie synchronized to the music you are sending, either in streaming or something that is downloadable, you will need some form of a synchronization license. If you are putting the lyrics, music, tablature or any other visual representation of the song in your product, you will need some form of a print license. You might find that providing very clear descriptions of the technology you intend to employ might aide in your negotiations with the music publisher.

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Summary

We hope you have gained a general understand of music licensing. Once you locate the correct publisher for the song you want to license, they will help you through the process of completing a license. It sounds a lot more daunting than it truly is. Good luck and happy licensing!