Understanding the importance of music business licenses will help musicians protect their intellectual property. Every time a song is reproduced for an audience, the track’s creators have a right to be compensated.
Getting your music licensed is an excellent way to gain exposure and make money. While it may seem complicated and confusing, there are music licensing companies that can help.
Copyright is the intellectual property that gives you the right to make and distribute your work. Music licensing is a way to permit businesses to use your music for a specific period and at a specified rate. When a musician has their song copyrighted, they automatically have both the master and publishing rights to it (see our guide on how to get your music copyrighted for more information).
There are many different types of licenses that you will need to secure for your music. These will vary based on the kind of use and how it will be used. Some of the most common include public performance, synchronization, reproduction and distribution rights, and reprint rights.
You will need a public performance license to broadcast your music on a radio or TV. This is typically managed by performing rights organizations (PROs) such as SESAC or BMI. They often offer a so-called blanket license, meaning you can access a certain musician’s catalog for a fixed annual fee.
A synchronization license is a special music business license that allows you to synchronize your music with moving images. This is very common with video posts on your social media accounts and music in a film, TV show, commercial, news segment or even a video game.
Music licensing has become a very important source of profit for many musicians, both independent and signed with a record label. Unfortunately, some companies may try to take advantage of musicians by running schemes and untruthful marketing programs, so it is important to understand how this process works.
Several different types of music licenses are necessary for a song, depending on what the track will be used for. The most common ones are the synchronization license and the master license, which both permit the use of the song in audiovisual media such as television, movies, commercials, video games, radio, etc.
Another type of music license is the reproduction license, which enables a company to reproduce a copy of the music track on a medium or support that can be distributed for sale, including CDs and cassettes. Finally, the public communication license enables companies to broadcast a song in a space open to the public (such as a radio or a website).
Collective Management Organizations usually handle these music licenses, which act as intermediaries between rights holders and second parties that want to use their music. For example, ASCAP, BMI, and SESAC are all examples of CMOs. These organizations collect and distribute performance royalties for their members and negotiate licensing agreements on their behalf.
Music licensing is a crucial element for musicians to consider, especially when landing their music in popular media such as movies, TV shows and advertisements, podcasts or radio broadcasting. Landing their music in these mainstream media types can greatly affect their income. However, music licensing can seem confusing and complicated for musicians who have yet to become familiar with the concept.
The most common type of license musicians need is a public performance license. These licenses are managed by what is known as Performing Rights Organizations, or PROs. Some of the biggest PROs include ASCAP, BMI, and SESAC. These organizations license musicians’ performances in public places like stores and restaurants.
They also collect and distribute performance royalties to their members. To do so, they track live performances of songs and use various methods to report these performances. However, they can only capture some of the arrangements that take place.
For business owners, it’s important to understand that music copyright laws dictate that they must obtain a public performance license before using music in their store or restaurant. The exception to this rule is businesses that play music as part of a face-to-face teaching activity at non-profit educational institutions. To avoid paying hefty fines for not obtaining the proper licensing, it’s best to consult a PRO about getting a public performance license.
The legal definition of a music performance extends well beyond just playing a song in public. Even posting it online can transmit copyrighted music to an audience. Business services often purchase music licenses from so-called performing rights societies, like ASCAP and BMI in the U.S. or CMOs in other countries.
These entities are dedicated to collecting performance royalties — paid every time a song is played for a large audience, whether on the radio, TV, in a cafe or at a concert — and then distributing them to musicians who have joined their groups. Broadcasters usually enter into so-called blanket licenses, paying an annual fee to access a musician’s entire catalog and use all their songs in various media.
Music publishers and the artists they publish take a share of those royalties, called sync fees. Depending on the music’s popularity and commercial success, the fee can range from nothing to millions of dollars.
Music licensing allows musicians to make money and build their careers. But they have to put in the effort first. As an indie musician knows, sustaining a career solely on exposure alone is very difficult.