The Music Licensing Guide for Musicians

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Music is a key element of any piece of media, but is usually the last piece of a television show, movie, advertisement, or video game to fall into place. Time constraints and budget concerns make the process tricky to navigate. However, music can make or break a project; it sets the mood and tone of scenes in our movies and shows. It heightens the anticipation of tense moments, evokes an emotional response in tender scenes, and can influence our perception of media in ways no script, production team, or lighting designer can. Music speaks to us on a profound level, so it’s important to match the right music to the content. A properly structured music licensing deal is an important piece of the production puzzle.

 

Some Basic Terms to Know

 

Before we dive into the particulars of sync music licensing, it helps to know some of the terminology we’ll be using. Copyright is literally “the right to copy.” The copyright holder has five exclusive rights: reproduction (or copying), adaptation (preparing works derived from the original), distribution of the work to the public, public performance of the work, and display of the work in public. For copyright purposes, a publisher is the owner of the copyrighted work. It is common practice for songwriters to form a publishing company as a separate entity to hold the legal rights to their work. A song is a composition, while a particular recording of a song is the master.

 

The license is the right, granted by the copyright holder or their agent, to perform, reproduce, or broadcast a copyrighted work. There are different types of licenses, but most involve either a flat fee paid for a predetermined length of time, or royalty payments based on copies sold or total revenue. The licensor is the owner of the copyrighted work, and the licensee is the person or entity the work is being licensed to.

 

Performance is the public performance of a work, whether recorded or live, by the original artist or someone else, even if the music is adapted or changed in some manner. Playing the music in public on a CD or tape is “performing” the work. A broadcast is when a piece of work is played for multiple listeners, such as in a bar or store. It is easy to see how these two terms can intersect, leading to such phrases as “live broadcast performance.”

 

Performing rights organizations (or PROs) such as the American Society of Composers, Authors, and Publishers (ASCAP), Broadcast Music Incorporated (BMI), and the Society of European Stage Authors and Composers (SESAC), are large companies that hold the performance rights for copyrighted musical works. “PROs collect royalties for songwriters when their works are performed publicly, such as played on television and AM/FM airwaves, through internet radio services like Pandora, at a club, inside a restaurant, or at a concert.” These organizations license public performance on a nonexclusive basis, using a complex weighting formula to distribute the fees to the respective rights holders. Individual licenses may be negotiated, or the license may be a blanket license. In the US, performing rights organizations commonly act through agents to monitor performances and prevent unauthorized usage, but you may also negotiate directly with the organization rather than going through an agent.

 

Music covered under a prior agreement is termed pre-cleared music and may be distributed and legally used under specific circumstances. Master use licensing refers to the use of a piece of music as a soundtrack, lead-in, bumper, or background in a motion picture. Synchronization licensing relates to the synchronization of music to moving pictures as background in a movie, television show, video game, DVD, etc.

 

The Two Main Clearances

 

The two types of licensing we’ll focus on today are sync rights and master rights. Sync rights are the rights to a particular composition — think the sheet music to a song. Sync rights are granted by the songwriter and publisher and give the rights to a particular composition. Master rights, on the other hand, are the rights to a particular mastered recording, or specific version of a song. The sync rights are composed of a songwriter’s and publisher’s share of a song, while the master rights are usually owned by the record label that represents the recording artist.

 

Getting the Right Clearance for Your Project

 

Determining what type, or types, of clearance you will need for your project is crucial. “Recall, Sync rights are paid when a song is synchronized with another visual medium like TV, film, the Internet, or video games. The biggest buyers of Sync rights are ad agencies, video production studios, and video game developers. To use a track, the user needs two licenses: a ‘synchronization license’ from the composition owner (usually a music label that represents a writer) and a ‘master use license’ (from a label that represents the recording artist). Because there are two licenses — one for Music Publishing and one for Recorded Music — Sync rights span the two businesses within the music industry.”

 

In order to determine what kind of clearance is right for your purposes, you need to know some specifics about your project. What type of media is it? Is this a radio commercial, or a YouTube ad? Will it be streaming online? Will the media be paid or unpaid? Will there be any trade show or industrial usage of the work? Will it be broadcast? Also, how many spots or videos will there be? For indie films in particular, film festival rights can be an affordable option.

 

Term and territory are also important considerations when deciding what type of license to obtain. How long will the work be played? In what territories will it be available? Reducing the term of a license can be an effective way to cut fees. 13 weeks, 6 months, 1 year, and perpetuity are common terms for licensing, but other term lengths can often be negotiated. Many advertisements are often limited by region, or broken down into Designated Market Areas, or DMAs, so it’s important to consider where the work will be available.

 

How many times and for how long will the music be played in the work? How long is the overall work? It is important to consider this when negotiating fees and royalties. Another thing to weigh is whether or not exclusivity is important to you; do you need exclusive rights to this music? If so, expect to pay more since this means the licensor will be missing out on potential income from other licensees, and will expect you to make up the difference. Category exclusivity allows a licensee to be the only business in its product category associated with the sponsored property, and generally extends for six months in the US.

 

There are also other options that can be negotiated into your licensing agreement, such as the right to add other territories, add additional terms, or create different versions of the work. For indie films, step payments are a common option that guarantee payment if the film revenue reaches a certain threshold.

 

Fees and Royalties

 

Fees and royalties are important considerations when reaching a licensing agreement. Upfront fees are determined by a number of factors, some outside of your control. Sometimes the budget is healthy, while other times things are leaner and the client needs a favor. While it’s true that royalty-free music library tracks are cheap, they often have a sound that matches their price point. On the other hand, using classic, well-known songs can be very expensive.

 

One option is cover songs, whose sync rights can be purchased from the publisher (which can be costly). The song can then be re-recorded in a way that matches the project for less than the original master rights. Another option can be searching the public domain; many classical pieces are available via the public domain and therefore don’t require sync rights, though full master rights for the particular recording are still necessary. However, public domain pieces can be difficult to verify and proof of public domain is up to you to furnish.

 

Often times, a master rights owner will insert a clause that stipulates that they make the same amount as the sync rights holder. This is referred to as a Most Favored Nation, or MFN clause (it sounds so heavy and official because the concept originated in international trade and carried over into the music licensing and other industries).

 

It is important to note that broadcasts can generate royalties for years when aired on television. Over time, these royalties can far exceed the initial fees paid, so you should consider your long-term goals for a work when reaching a licensing agreement.

 

When Rights Go Wrong: Avoiding Music Clearance Mistakes

 

The process for obtaining appropriate music licensing is complex and full of potential pitfalls. Sampling a song that is uncleared can get you into trouble, especially if it is a well-known piece of music. It is also important to consider that some pop songs may have as many as five songwriters, all of whom have to approve of the licensing agreement. Additionally, all samples must be cleared, including getting both the sync and master rights.

 

Working with experienced music licensing companies can be an advantage, as they can offer you options that suit both your project needs and budget. Avoid common music licensing mistakes by making sure to clear both master and sync rights, paying your invoices on time, avoiding improper usage, and being sure to get all your options in order when negotiating an agreement. It can also be helpful to re-record a song that you have obtained the sync rights to, as this can be a more affordable option than getting the master rights.

 

Sync Music Licensing FAQ

 

Why do I need a license? Simply put, “The right to perform or play a song in public is one of the exclusive rights of the copyright holder,” and you need to obtain permission from the copyright holder in order to legally perform or broadcast the work. Music licensing allows artists to be paid when their work is played or performed publicly, which in turn allows them to create music. You can also be sued for improper usage of someone else’s copyrighted material without their consent, so it’s important to comply with all licensing requirements from the beginning.

 

What services to PROs provide to businesses? Music licenses through a PRO offer copyright clearance to use any music in the organization’s repertoire in a variety of ways. This can save time and expense over going to individual artists and composers to obtain licensing for individual works. There are also music placement companies that offer a more specialized approach. While some offer large catalogs with a wide variety of artists, others are more focused and aggressively push a select artist or group of artists.

 

It should be noted that podcasts do not qualify as public performances, and are therefore not covered by many blanket license agreements. “By their very nature, podcasts are meant to be downloaded, which implicates other rights under copyright law.” It is therefore crucial to ensure that your licensing agreement allows use in podcasts specifically, as this use is not included in most blanket licensing agreements.

 

What happens to the fees that businesses pay, and how much profit to PROs make? PROs tend to be run like non-profit companies, giving out the entirety of what they are paid less operating costs to the copyright holders of the music. Your money goes to support artists and composers so that they can continue to do their work.

 

If musicians are playing live music, aren’t they responsible for public performance fees? While the musicians may be performing, the business or organization that is benefitting from their performance is ultimately responsible for ensuring that music is correctly licensed. Even if the musicians are independent contractors, this responsibility cannot be abdicated.

 

I bought my own MP3 files, CDs, or tapes. Doesn’t that mean they’re my property to use as I see fit? While most people buy audio files, music, or games thinking that they are their property, there is a legal distinction between owning a copy of the media and owning the rights to the media itself. When you buy an audio file, game, or CD, the purchase price only covers private listening use. It does not extend to public performance. To legally use the media in question, you will need to obtain licensing rights for any public performance.

 

Does a business need a license if they only play original music? The short answer is, it depends on who owns the rights to the music. Part of the reason that PROs exist is to help aid up-and-coming musicians in getting support for their work. It is likely that most “original compositions” will need to be licensed in some capacity and it is your responsibility to find out what licensing is required.

 

Navigating the field of possibilities when pursuing a music licensing agreement can be daunting. To get the best results, be thorough in your research, get all your options in order when reaching an agreement, be timely in your payments, and avoid improper usage. Be sure to clear both master and sync rights when necessary, and be sure to get the sync rights for any compositions you will be re-recording. If working within the public domain, make every effort to prove that the work is indeed public domain. Speak to an agent or music supervisor to determine what kind of licensing agreement best suits your purposes, or apply online at many PROs.