This
blog references the term, music
licensing, quite a bit. Generally,
when we talk about licensing, we are referring to licensing music for film and
television, or “synch” licenses.
However, in nearly every aspect of music use, there is a license
involved. Licenses are required to sell,
broadcast and play live music. Confusion
arises when songwriters, artists, broadcasters and even club owners don’t know
if they are properly licensed in their area of music involvement.
Here
are some of the most basic licenses needed:
Mechanical
Licenses
Performance
Licenses
Digital
Licenses
Synchronization
Licenses
Master
Use Licenses
Mechanical
Licenses are required
when a song is recorded and sold, either digitally or physically. These ensure that the songwriters and
publishers are paid when a recording is sold. The Harry
Fox Agency (HFA) is the largest administrator
of mechanical rights in the U.S, handling over 15.2 million licenses for nearly
36,000 publishers.
Mechanical
fees shared between songwriters and publishers are paid at a rate of 9.1¢ per
song and 24¢ for ringtones. Fees for
streamed uses are still negotiated individually with each service. Without
mechanical licenses in place, it is illegal to release a CD or digital
recording.
Performance Licenses grant the rights to publicly perform a
musical composition. These licenses include live performances and broadcast via
a sound system radio or TV. These rights
administered via performing rights organizations, such as BMI (Broadcast Music, Inc), ASCAP (American Society of Composers, Authors and Publishers),
or SESAC.
People incorrectly assume that it is
the responsibility of musicians and entertainers to obtain performance licenses. However, it is the business owner who must
obtain the license. Just like insurance and other business licenses, paying
music license fees is simply another cost of doing business. Not properly
licensing an establishment could be quite costly as damages
can range from a minimum of $750 to a maximum of $150,000 per song played!
Fortunately,
the licensing fee is
determined by the size of the establishment, and the manner in which the music
is performed, i.e., live, jukebox, videofeed, etc. Concert rates are based on
the seating capacity, college and university rates are based upon the number of
full time students and retail store rates depend upon square footage, etc.
Radio
stations and television networks usually apply for blanket licenses that
allow them to publically perform any song that the PRO’s administrate. The fees they pay are based on the station's listener
numbers and ad rates.
Digital Licenses are for Internet websites, and mobile applications. Companies
that stream recorded music digitally—such as Internet radio services and webcasters
must have licenses to digitally transmit music to listeners. SoundExchange administers these types
of licenses for artists and labels. The PRO’s have special digital rates for
publishers and songwriters. The rates
are much lower than the terrestrial broadcast rates. BMI has even created
special “Live365” blanket licenses for “microcasters”
and “minicasters.” Additionally, HFA licenses interactive streams for one cent
(.01¢) per stream via Songfile.
Synchronization
or Synch Licenses allow a song to be synchronized
with pictures, and is the type of license required to use a song in a film or
on television. A Master Use license is
required to use a recording in a film. These two licenses are required when a
record is used, the Synch license to allow the use of the copyright and the
Master use license to use the actual recording.
Even
though each of these documents is called a license, each has a specific
purpose. Only the correct license can give you the protection you need, and grant
the permissions you seek. These licenses
also make sure that each entity involved in a piece of music, i.e., songwriter,
artist, publisher or label, receives compensation for the work that they
assisted in creating.
