What Is Music Licensing

Learning the ropes of music licensing and navigating license agreements can be exhausting and discouraging; I know that first hand! The goal of this section is to provide you with information on music licensing and copyright law that is straightforward and easy to understand so that you can make informed decisions when licensing (and using) music in your projects!

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What Is Music Licensing?

In it’s simplest terms, music licensing is paying a fee to the rights holder of a song or work to use it in a project of yours – or perhaps, to use a song in a project you are making for another person or company.

A “project” can be anything as small as an online video, or as large as a major motion picture. The bottom line is, regardless of the size of a project, if you want to use someone else’s song in conjunction with a project of yours you are going to either need their permission (or permission from the rights holder if the artist has transfered rights away to a record company / publisher), or more commonly, a license.

It’s a great misconception today that any music can be freely used for any purpose. The reality is, that even uploading a video to YouTube with music you haven’t licensed or cleared is illegal and could carry heavy legal consequences.

How to license my music

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Understanding Copyright

This section is here to help you understand copyright law as it pertains to songs in a way that is easy to read and understand. While I cover various topics regarding copyrights for educational purposes, this is of course not a definitive guide to musical copyright law. If you require expert advice please consult a lawyer or professional.

Introduction

When a song is created and made tangible (this could scribbling lyrics down on a piece of paper or napkin even), it is automatically assigned a set of six copyrights under law. These copyrights empowers it’s owner with a number of ways that he or she can exploit a song as they see fit.

The Rights Assigned To A Song

When a song is created, it is assigned six legal rights. Those rights are:

  1. Derivatives
  2. Digital Transmission
  3. Distribution
  4. Public Display
  5. Public Performance
  6. Reproduction

Here are short explanations of what each right grants:

Derivatives

When a song is created from an existing song (one that goes beyond a ‘cover’ or replica, but adds lyrics or additional content) that is considered a derivative work. Another example of a derivative work is a translated version of a song. Only the song’s copyright holder can legally grant permission for derivative works to be created.

Digital Transmission (Non-Interactive)

When a song is played or “transmitted” via AM/FM radio, satellite (ex. Sirius Radio) , or the internet (ex. Pandora), royalties are owed by the broadcaster(s).

In the case of terrestrial (AM/FM) radio, only songwriter’s are paid a royalty for the “public performance” of their work. This money is collected and distributed to songwriters via “performance rights organizations.” There are many PROs in the world, however some of the more notable ones are SOCAN, BMI, ASCAP, SESAC and GEMA to name a few.

For satellite and internet transmissions, the songwriter, the performer and the label (or whoever owns the rights to the sound recording itself – not just the song) are entitled to collect royalties. These royalties are monitored, collected and distributed by a non-profit company called SoundExchange.

It’s important to note that all of the above examples given are “Non-interactive” transmissions. In other words, music is supplied to the listener based on set programming by the stations; it’s not listener interactive. For interactive digital transmissions (YouTube) where listeners can choose the music they are listening to, only PRO’s are paid. As plays are considered interactive transmissions, SoundExchange does not monitor, receive or collect any royalties.

Distribution

When a song becomes tangible, the one who created it legally receives (by nature of creation) the right to distribute it. This right applies to the distribution of both physical and digital copies of a song.

The right to distribute is a very valuable right, especially as it’s crucial for music licensing.

Public Display

When a song is created (either from writing it down or recording it), you are legally granted the right to display that work in public.

At first it may seem that this right has little to do with a musical work, however that is not the case. Printing lyrics from a song onto something like a t-shirt, displaying lyrics on a website and creating sheet music all have to do with the public display copyright.

Any person or entity who will be using a song in that ways noted above will need to have an agreement with the rights holder.

Public Performance

When a song is created, the songwriter is granted the exclusive right to public performances. This performance right includes both live performances and transmissions of performances over radio, television, satellite, internet etc. Just like any of the rights, this right can also be assigned and transferred.

When a songwriter decides to allow public performances of their work and registers with a PRO (Performing Rights Organization), the PRO will collect royalties for the songwriter from establishments and venues who are broadcast/performing their song

It’s important to note that public performance rights are only dealing with the songwriters, who control the copyright ©, not the rights holder of a recording of a song who control the copyright ℗. The song itself © and the recording of a song ℗ are two different things, with different rights, and many times are owned by separate people or entities. In many cases, a songwriter or publisher will control the copyright of the song while a record company will control the copyright of the recording of the song.

Reproduction

When a song is created, the writer of a song is granted an exclusive right to reproduce the song. Compared to the other rights listed, reproduction rights are typically considered of higher value; no one else can reproduce a song without paying the songwriter(s) a “Mechanical Royalty”. This royalty rate is set by the government, and defines the maximum amount that must be paid to the songwriter for each reproduction.

Mechanical royalties don’t just apply to physical reproduction however, but digital reproduction too. If a song is purchased from iTunes for example, or even downloaded freely from a website – if it is downloaded to a hard drive it is considered a reproduction. The government also assigns a specific royalty rate for digital reproductions.

Finally, reproduction rights can be exercised and royalties collected for “streams”. Streaming royalties are collected from services that allow on demand/streaming music services. The owners of these sites and services are required to pay the songwriter a mechanical royalty, which is a combination of a percentage of the revenue generated by the site and a payment per each subscriber.

A Final Word

This section was created using a combination of my own personal experiences in the music industry and information gathered from the internet. One particularly useful resource I leaned upon for structure and info was an article written by Jeff Price and George Howard on the TuneCore website. If you would like to read a more in depth article on the six legal copyrights, I highly recommend: The six exclusive copyrights that drive the entire music business.

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Licensing Agreements

In the music industry, License agreements are contracts that grant rights, and carry conditions. Essentially, they are an agreement between the rights holder (or holders) of a song and the ones looking to use a song (and generally it’s recording) in a way that requires the granting of particular legal rights (the ones listed in the copyright section above). The person or party wising to license a song is generally referred to as the “Licensee” while the rights holder is referred to as the “Licensor”.

There are many different types of agreements that exist. There are industry standard agreements like Synchronization and Master Use license agreements (needed when syncing a song to media and broadcasting/distributing it for example), mechanical licenses (for duplication/reproduction) and there are custom agreements offering a mix of rights depending on the particular circumstances at hand.

Specific To My Work

When it comes to the case of AudioJungle (and many royalty free music agreements in general), you’ll find that a handful of agreements exist which cover a large number of rights. Many are attracted to this model because of it’s simplified licensing structure, relatively low cost and of course, not having to pay continual royalties to use a pierce of music. While this is a plus to some however, it is also a minus for others.

Some gray areas can exist in simpler licensing structures that make it difficult (or legally uncomfortable) for large scale projects to license music. Also in the case of AudioJungle at least, music cannot be exclusively licensed directly from the site. King’s Crown Productions bridges this gap in that it offers exclusive music licensing and a large number of licenses tailor made to specific uses both large and small. KCP also offers a royalty free collection of my work that is not available anywhere else in the world. So whether your project/budget is small or large, between the two, you will definitly be covered!

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