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Music Licensing
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- 1Music LicensingThe process by which these users of Music secure the permission from copyright owners (and their authorized reps) to use the music in the desired manner.
A. Make copies
B. Publicly perform
C. Prepare derivative or adaptive works using the original. - 2Common types of musical licensesIn practically all instances where a recorded Master is licensed, a license from the owner of the musical composition embedded in the Master is also required. There are instances where a musical composition license is required but not a master license for the sound recording.
There are rare cases where a sample of a Master recording was held to be sufficient in a sample situation where no license was obtained from the owner of the musical composition. - 3Musical composition licenses1. Mechanical License
2. DPD License
3. Synchronization License
4. Sampling License
4. Print License
5. Software, videogame, multi-media license
6. Performance License
7. Videogram, karaoke, and music device license
8. Sound recording license - 4Mechanical LicenseAuthorizes the licensee to make a mechanical reproduction or recording of a musical composition in a physical form.
Every record company must have such a license from the owner of the musical compositions featured in the commercial recordings they manufacture and sell to the public.
As of Jan 1, 2009, the compulsory mechanical royalty rate is 9.1 cents per composition and 1.45 per minute for songs over five minutes (long song rate) - 5DPD License (Digital phonograph license, also known as Digital mechanical license)This is the term used for a license to digitally record and sell a composition. It can be thought of as digital mechanical license. The license is specifically authorized under section 115 of the Copyright Act. The rate of the license is tied to the statutory rate for the Mechanical License. There has been controversy over whether or not the compulsory license provisions under the copyright act apply to digital sales.
- 6Synchronization LicenseA synchronization license authorizes the use of the musical composition in connection with the soundtrack of a motion picture, television program, or video, whether or not in timed synchronization to the action. The cost of such licenses varies from a few hundred dollars to thousands or dollars for a use of a particular composition over the title or ending of a major motion picture. Whether the song is used in the background or actually performed in the film is also a factor. There are no standard rates and often independent labels and unsigned artists permit to use of their song recordings and compositions for nominal or no fees for the promotional value of having their work in a particular film.
- 7Sampling LicenseSampling licenses authorize the composer of another composition to use a portion of the musical composition in their work. Such licenses can be in the nature of a flat fee or a royalty based on a percentage of the income or copyright derived from the new song.
- 8Print LicenseA print license authorizes someone to make a re-print of all or a portion of the lyrics to a musical composition in books, magazines, or advertising.
- 9Software, video game, or multi-media licenseA multi-media license authorizes the use of all of a portion of the musical composition in a computer software program such as a Video Game. It may contain both a mechanical license to cover the individual copies of the program to be sold, as well as a synchronization license to cover the use of the composition in connection with text or visual material. The fee can be a per unit amount which is either a flat fee or a percentage of the retail or wholesale price of the item.
- 10Performance LicensePublishers of recorded compositions generally authorize either ASCAP, BMI, or SESAC to license broadcasters such as radio stations, night clubs, and other places where music is publicly performed.
- 11Videogram, Karaoke, and Music Device LicensesThese licenses authorize the manufacturers to manufacture the above devices which in turn contain a musical composition belonging to the licensor.
The Harry Fox Agency can be used for a fee to handle negotiation and issuance of most licenses for publishers except for synchronization licenses. - 12Sound Recording Licenses1. Master License
2. Master Synchronization License
3. Sampling Licenses for Master Use
4. Software, videogame, or multi-media license
5. Performance License - 13Master LicenseAuthorizes the licensee to manufacture copies of a sound recording. Such licenses are used when one record company seeks to issue a compilation recording featuring another record company's master.
They are also used where one record company seeks distribution in a foreign territory and licenses it's Master to the foreign company in that territory for manufacture and distribution.
In both instances, the licensee has the responsibility for obtaining and paying the required mechanical license from the owner of the underlying musical composition.
Rates for such licenses vary depending on the circumstances. Percentage royalty and penny rates per Master sold are both used. - 14Master Synchronization LicenseThe Master Synchronization License is similar to the synchronization license for the underlying musical composition, except it is granted by the owner of the Master instead. Fees are equal to those paid to the owner of the musical composition.
- 15Sampling licenses for master useSampling Licenses for Master use are typically issued by record companies to other recording companies who wish to use a portion of the licensing company's master as a part of their new master recording. Such licenses are typically based on a certain number of pennies per new master sold, with an advance up front to cover the first 100,000 or more units sold
- 16Software, videogame, or multi-media licenseAs in the case of a musical composition, a multi-media license for a Master authorizes the use of all of a portion of the master in a computer software program.
It will also grant permission to sell manufacture and sell copies of the software or video game to the public either for a flat fee or a per unit royalty. - 17Performance LicenseCurrently, the performance of sound recordings over the air via non digital means does not require a license or performing royalty. The only performance right for owners of Master recordings that currently exists under the U.S. Copyright Act is for the digital transmission or performance of copyrighted Master recordings, usually over the Internet. This payment, currently collected primarily by SoundExchange, is to be distinguished from a digital sale via the internet, for example, of a Master recording to the consumer in lieu of a physical copy of the record, which is not technically a performance.
Consider when you can only "Lease" a digital recording for a period of time and then the license ends. Is that a sale or a performance? - 18Musical Compositions - Parties in Control1. Songwriter owned publishing companies
2. Major publishers
3. Compulsory mechanical licenses - 19Songwriter Owned Publishing CompaniesThe songwriter of a composition owns the copyright of original songs written by the songwriter until such time as the songwriter assigns the copyright to that work or administration rights to that work to another party. If the songwriter retains all rights to the song and forms his own publishing company, all decisions regarding licensing the song will be made by that individual.
- 20Major PublishersMost popular music is controlled by large music publishers such as EMI, Warner Chappell, Windswept Pacific and others. They acquire either partial ownership of the copyright and administration rights or only administration rights by offering advances and royalties to the songwriters. Licensing requests are handled at such companies by experienced staff who are very familiar with the going rate for various types of licenses and terms.
- 21Compulsory Mechanical LicensesThe copyright act authorizes a manufacturer of a song which has been released to the public previously to record it based on a statutory license as long as strict statutory conditions are met. Very few record companies rely on compulsory licenses because the statute, among other things, requires monthly accounting, which is not typically found in negotiated mechanical licenses.
- 22Sound Recordings - Parties in Control1. Small record labels
2. Major record companies - 23Small record labelsSmall labels and individual artists who finance and record their own material will own and control the licensing of their master recordings.
- 24Major record companiesMajor companies who sign the artist or the artist's label and finance the recording expenses of the project, usually control the copyright to the recordings. Typically there is a department at the record company that handles all licensing requests for use of their catalogue. Again, such departments are well aware of the going rates and terms for each type of licensing request. Some Artist agreements may contain restrictions concerning what use can be made of their recordings. Use of Masters in political campaigns and sexually explicit films ofter require Artist consent.
- 25General points to consider in negotiating license terms1. Importance of access to information regarding market rates for the licensing being negotiated
2. Approach to Terms - 26Importance of access to information regarding market rates for the license being negotiatedIf you are representing a copyright owner on an isolated license request, it is very difficult to know how close the compensation offered for the usage compares to the "going rate". I have seen Mechanical License rates as low as 50% of the statutory minimum accepted by attorneys without apparent challenge. For that reason, it is very wise to cultivate cordial relations with individuals at publishing and record companies who can provide examples of compensation in current transactions in order to have a basis for comparison. This is particularly true if you have no prior experience in this area.
- 27Approach to Terms1. Description of rights granted
2. Audit rights
3. Copyright owner credit - 28Description of Rights GrantedGenerally, in terms of rights granted, the Licensor seeks the narrowest possible language and the licensee seeks the broadest. If the term, territory, or type of usage is narrowly construed, it is wise to add language giving the licensee the option to expand the term, territory, or type of usage upon payment of an addition, pre determined fee to avoid the uncertainty of future negotiations over such issues.
- 29Audit RightsWhere per-unit royalties are negotiated, right to audit clauses can be important
- 30Copyright owner creditRequired inclusion of credit information can be an important vehicle to secure additional licenses.
- 31Advantages for artist and labels who control 100% of both sound recording and musical compositionsSince most uses of recorded music require licenses from both the owner of the Sound Recording and the Musical Composition, Labels and Artists that control 100% of both rights to their catalogue have the advantage of being a "one stop shop" in terms of completing the transaction quickly and efficiently.
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- Fichas sobre Music Licensing, creado por Haley DeCrescenzo el 11/05/2017.
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- Haley DeCrescenzo
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