What You Need to Know About Music Licensing

While music licensing is a complex and somewhat obscure topic in the music industry, it plays a huge role in our everyday lives. Whenever you hear music in a commercial, a movie, playing in Starbucks, or in that cheesy training video you had to watch at work, it’s the result of music licensing. You can think of it as one party renting music to another. Instead of selling the song outright, permission is granted for the other party to play or use the song in exchange for royalties. First, let’s cover some basics…

Song rights

There are several aspects or rights of a song that can be licensed:

• The sound recording (masters)
• The composition (publishing)
• The lyrics

How do I gain permission to use these rights?

Permission needs to be obtained from the rights holder. Oftentimes, there are multiple rights holders, which means you’ll have to contact different parties to obtain the rights.

• Sound recording: Rights to the sound recording (known as “master rights”) are controlled by who financed the recording. This is usually the record label unless you’re dealing with an independent artist.
• Composition: The composition (the lyrics and melody) written by the songwriter is typically administered by the music publisher, unless the writer is self-published.
• Lyrics: Rights to the lyrics are controlled by whoever wrote them, which is usually the songwriter. However, as with a composition, the songwriter may have a publishing deal which means you would contact the publisher.

When do you need to obtain a license?

There are several examples of when you need to obtain a license to use a song. Here are just a few:

• Use of radio or live performance in public (i.e. restaurant, nightclub, commercial establishment).
• Use in a visual project (i.e. film, TV, commercial, online video, video game, etc.).
• Use in a toy that plays music.
• Use in an app that displays lyrics.

What kind of license do I need?

There are several different types of licenses you can get depending on how you intend to use the song.

• Master License. This type of license gives the license holder the right to use a recording that someone else made. The master license is obtained from the rights holder (usually record label or artist) for each song that wants to be used for the project.
• Performance License. A performance license gives the license holder permission to use an artist’s song at live performances, clubs, business establishments, multimedia presentations, music used in meetings and conventions, or simply played through a CD for the benefits of the people listening to it i.e. ambient music in a restaurant. (ASCAP licensing) Songwriters, composers, and/or publishers are paid royalties for use of each track. If the songwriter is a member of a performing rights organization agency, like BMI, ASCAP, or PRS, the collection society will keep track of performances of the songwriter’s material and collect royalties on behalf of the songwriter.

• Synchronization License. A synchronization license (commonly called a “sync” license), gives the license holder permission to use a song in “sync” with visual media. Synchronization licenses are usually used in television shows, movies, commercials and other videos. Fees may vary according to: 
  • How the song is used (e.g. background music, theme song)
  • Where it will be played (e.g. TV network, local channel)
  • How many people will hear it (e.g. regular sporting event, Super Bowl)
  • Type of media using the song (e.g. independent film, Hollywood movie)
  • Songwriter status and experience

• Mechanical License. A mechanical license gives the license holder permission to reproduce the sound of a recording. For example, an artist that records a cover song needs a mechanical license. Each time a copy of a song is made e.g. every CD produced, royalties are paid to the songwriter. In some cases however, the payments are divided amongst band, label and publishers.

• Print License.  This license is obtained to copy or reprint lyrics of sheet music for a song that someone else wrote for personal use or reproduction. The royalties are paid to the composer or author of the song for the right to print the work. The Print License is required for every song copied or used by a third party. This type of license can be necessary to create a music book or a song sheet. The price of Print Licenses is negotiated on a case-by-case basis between the copyright holder and the licensee, thus there is no set price range.

• Blanket License. Performing rights organizations and collecting societies offer blanket licenses that allow a licensee to have access to a portion or complete repertoire of songs for a flat annual fee. The licensee (client) can be, for example, a radio station or a shopping center that wants to play background music. From the Licensee’s point of view, it is less time-consuming than other options because it enables them to avoid clearing each song’s right with the relative copyright owner. These blanket licenses allow the system to flow smoothly and efficiently while minimizing unnecessary administrative time waste.

How can Songtradr help? 

If you’ve made it this far you may be thinking, “Wow! This is a little more complicated than I expected!” While music licensing is certainly not an easy beast to conquer, services like Songtradr are able to relieve a lot of the headache associated with it. They offer a vast catalog of songs that can be licensed for varying budgets and needs, including film, TV, video games, and much more. Through Songtradr, all rights holders of a song are connected in one place and licensing fees are automatically generated, saving time and money.