Music Licensing is not rocket science. But it's not intuitive either. This infographic illustrates some of the broader principles for music licensing under United States law.
The downloadable pdf can be printed onto one sheet of legal-sized paper. Download Music Licensing Infographic – by Joy Butler Esq.
The Copyright Clearance Center’s (CCC) Velocity of Content blog is offering three articles adapted from my recent CCC-sponsored webinar presentation about uses of music within the work and office environment:
Music Licensing: The Difference Between Public Performance and Synchronization Licenses The complexity of music licensing stems in part from the different types and names of music licenses. The music industry gives different names to music licenses according to whether you are using the song or the sound recording and according to how you are using the music. During the webinar, I reviewed different categories of music licenses and gave examples of when you might need each one – including public performance licenses which grant permission to perform music in public and synchronization (or synch) licenses which grant permission for the use of a song in a video, advertisement, or other audio-visual presentation. Read the article, “Music Licensing: The Difference Between Public Performance and Synchronization Licenses” on CCC’s Velocity of Content blog.
Using Music at Work – 5 Source and Licensing Considerations During the webinar, I discussed the pros and cons of the following sources where a company might seek music for its video, advertisement, and training materials:
Music Licensing: What is Considered Fair Use? Copyright fair use is an exception to copyright protection that allows you to use a small portion of a copyrighted work without the copyright owner’s permission. The challenge for those who want to rely on fair use if that the doctrine is subjective, has no bright line rules, and must be decided on a case-by-case basis according to the specific circumstances. During the webinar, I discussed how the fair use doctrine applies to educational use, incidental use (i.e., a documentary production picking up music in the background during a shoot), and use for news reporting purposes. Read the article, “Music Licensing: What Is Considered Fair Use?” on CCC’s Velocity of Content blog.
Additional “Using Music at Work” Webinar Summaries and Recaps
Here is my recap of 25 key music licensing points I shared during the webinar, 25 Key Points about Using Music in Your Business. For more details and examples of these key points, you can listen to a recording of the entire 1-hour “Using Music at Work” webinar at http://go.copyright.com/l/37852/2017-02-24/cg7t1z
A dance company plans to use several musical recordings in conjunction with a dance recital and queries whether its use of the music requires a license.
That seems like a simple question. Yet, it quickly becomes complicated as the dance company’s efforts to research the issue yield conflicting information about how to go about licensing and whether licenses are even required at all.
(My analysis of the dance company’s situation assumes that all the music to be used in the recital is currently copyright-protected and not in the public domain.)
WHY ALL THE CONFUSION AND CONFLICTING INFORMATION?
Song Versus Sound Recording
The dance company plans to use musical recordings. One source of conflicting information might be confusion between permissions needed for the recording versus permissions needed for the underlying song. A recorded musical selection includes a copyright in the recording itself and a separate copyright in the underlying song. Each might have a different owner and each carries different licensing requirements.
There is no general public performance right in a sound recording. Hence, the dance company’s use of the sound recording for a live recital requires no license for the sound recording. (But, as discussed below, the situation changes if the recital is recorded). In contrast, with some limited exceptions, the public performance of a song generally requires a public performance license.
Grand Rights Versus Small Rights
Another source of the conflicting information might be uncertainty over whether the dance company’s use requires non-dramatic performance rights (aka small performance rights) or dramatic performance rights (aka grand or large performance rights) in the song. The first category of small performance rights grants permission to present non-dramatic public performances of a song (such as playing the song on the radio, in a nightclub, or as background music in a film).
The second category of dramatic performance rights provides permission to make a theatrical presentation of a song or act out a song. A dance performance would typically require dramatic performance rights. Non-dramatic performance rights in a song can usually be obtained through one of the performing rights organizations – ASCAP, BMI, or SESAC. Typically, you must contact the song’s copyright owner or music publishing company directly to obtain dramatic performance rights.
WILL THE DANCE COMPANY RECORD THE RECITAL?
If the dance company plans to record and share copies of the recital (either as hard copies or via the internet), in addition to publicly performing the music, the dance company is now reproducing and distributing the music. Those reproduction and distribution activities require a synchronization license for the songs and a master use license for the sound recordingS.
DOES THE DANCE COMPANY PLAN TO LIVE STREAM THE RECITAL?
Song License Requirements for Live Streaming
For the song, live streaming of the dance recital via the internet still requires a public performance license – and, as discussed above, likely a grand or dramatic public performance license directly from the song copyright owner.
Sound Recording License Requirements for Live Streaming
With respect to license requirements in the sound recording for the live stream, I admit to being stymied. What is the necessary clearance for a sound recording heard during a live stream (audio-visual) event offered in real-time only?
As mentioned above, there is no general public performance license for a sound recording, but there is a right to perform the sound recording publicly by means of a digital audio transmission. However, the Copyright Act Section 114 definition of “digital audio transmission” explicitly says “{digital audio transmission} does not include the transmission of any audiovisual work”. Does this mean that a sound recording included in a live audio-visual stream (like a dance performance) is not a digital audio transmission – in which case no sound recording public performance license is needed for the live stream? If anyone knows of case law, additional statutory language in the Copyright Act, or industry practices that shine light on this question, please share.
Of course, if the live stream is to be archived and subsequently shared with others, that results in the same licensing requirements for the sound recording as offering a recording of the recital. A master use license for the sound recording would be required.
Companies use music for the instant vitality, emotion, and specific mood that music can inject into a promotion, presentation, or a room. Companies are often uncertain about how they may legally use music, which uses require a license, and the best sources of music for business use.
I addressed these issues at a recent webinar, “Using Music at Work”, sponsored by the Copyright Clearance Center. Here are 25 key points I shared about using music in your business:
SOME BASICS
1. Common business uses of music that might require a license include
2. Music licensing can be complicated. Here is an easy-to-grasp general take-away. If your company is sharing music externally (on the internet – in an advertisement – at a conference), the company’s use of that music likely requires a license. Even if the company is sharing the music only within the organization, the use of that music might still require a license.
3. While music licensing is not rocket science, it is also not intuitive. As an initial step in determining which music licenses you need, you must understand that a song differs from a sound recording; and that each has its own separate copyright.
4. Typically – but not always – the song and the sound recording have different owners. The song copyright is owned by the songwriter or by the songwriter's music publishing company. The sound recording copyright is owned by the record label that released the recording. The same song can have multiple sound recordings with different ownership of each sound recording.
MUSIC LICENSES MOST COMMONLY SOUGHT FOR BUSINESS USE
(Public Performance, Synch, and Master Use Licenses)
5. Public performances of songs almost always require a public performance license. License requirements for the public performance of sound recordings are limited to public performances rendered over the internet or by other digital means.
6. If you play a song in a retail store, in a restaurant, at a conference, or other public venue, those are public performances (as opposed to private performances) of the song and a license is required. It does not matter whether the public performance is rendered by a live band, a CD, a DJ, or someone’s smartphone.
7. Most song public performance licenses are issued by performing rights organizations (PROs). The PROs for songs in the United States are ASCAP, BMI, and SESAC – which have been around since before the 1940s – and Global Music Rights, a relatively new PRO established in 2013.
8. Each PRO controls a different catalog of songs. Typically, the PRO issues blanket licenses that allow licensees to perform any song in the catalog of that PRO. Public performance licenses in songs are fairly easy to obtain. ASCAP, BMI, and SESAC offer websites where you can obtain and pay for the public performance license you need.
9. Using music in a video, advertisement, or any audio-visual presentation requires a synchronization (or synch) license from the copyright owner of the song and a master use license from the copyright owner of the sound recording.
10. There is not a specific name for every different manner in which a company might use music. For example, there is no specific name for incorporating music into your training materials. Licensing for training and business presentations is more similar to licensing for a video presentation since you need direct permission from the song and sound recording copyright owners
COMPARISON OF MUSIC SOURCES FOR AUDIO-VISUAL, TRAINING, AND BUSINESS PRESENTATION PURPOSES
(Popular Music, Production Music, Indie Music, Creative Commons Music)
11. As noted above, public performance licensing is relatively easy. In contrast, acquiring music to incorporate into company promotions, videos and presentations can be more difficult. When evaluating where and how to obtain music for this purpose, a company should consider ease-of-licensing, cost, suitability for the company needs; and potential risks.
Benefits and Advantages to Using Popular Music
12. Popular music (i.e., music by well-known artists, music listed on Billboard charts) is the most difficult to acquire. Its benefits include immediate recognizability and conveyance of the mood or period you wish to evoke.
13. Using popular music requires contacting and directly negotiating with the music publisher for a synch license in the song and with the record label for a master use license in the sound recording. These owners are likely major music industry companies and it is not uncommon for permission requests to a major music company to elicit no response.
14. License fees for popular music are frequently in the tens of thousands of dollars, depending on the popularity of the music and how it will be featured or used in the audio-visual production (e.g., background, foreground, over the credits).
Benefits and Advantages to Using Production Music
15. Production music companies are in business solely to license you content so they often make the acquisition process very easy by allowing you to preview, purchase a license, and download music online. The production company provides both the synch license and the master use license. The cost for some production music can be as low as $30. Most uses are usually less than $1,000.
16. Using production music carries minimal risk. Nevertheless, you should read the license agreement to be certain that your specific use is permissible. For example, some production music companies do not allow their music to be used in political advertisements.
17. As a downside, while production music can be very well-done music, it is not going to be music that was on the Billboard Top 100 and that people immediately recognize.
Benefits and Advantages to Using Indie Music
18. Music by independent musicians (i.e., musicians whose music is not distributed by a major record group and, as a result, might have narrower distribution and not be as well-known) is likely to be significantly less expensive than popular music and somewhat more expensive than production music. While it probably lacks the broad immediate recognition of music that was a Billboard Top 100 hit, it might be recognizable within a particular niche – depending on the indie musician’s fan base.
19. While a company will want all its music licensing agreements to include appropriate representations, warranties, and indemnifications, this is especially important when obtaining music from indie musicians. If indie musicians lack the funds and resources to document the ownership rights in original music on which they collaborate, ownership and rights questions can eventually result in a dispute among the indie musicians. And your company does not want to find itself in the middle of any such intra-band dispute.
Benefits and Advantages to Using Creative Commons Music
20. Creative Commons music is free to use, and easy to find and download on the internet. It is unlikely to be immediately recognizable music. Using any creative commons material is higher risk because it comes with no representations, warranties, or indemnifications.
Benefits and Advantages to Using Commissioned Music
21. You can commission original music. The expense depends on the commercial stature of the musician providing the music. It’s a longer acquisition process because you must negotiate the transaction and then wait for the composition of the songs and the creation of the sound recordings.
22. While the music is not immediately recognizable (because it is brand new music), it can be tailored to the company’s needs. If you have a well-drafted agreement for creation and acquisition of the original music, there should be minimal risk.
WHAT HAPPENS IF A COMPANY FAILS TO LICENSE MUSIC? AND WHAT ABOUT FAIR USE?
23. Using music in your business without obtaining the required license might result in a DMCA take-down notice for materials posted online. There is also the possibility of a cease and desist letter with or without a demand for a license fee payment for both online and offline use. In a worst case scenario, the legal consequences of infringing music will generate a copyright infringement lawsuit against the company.
24. Fair use is subjective – and just because you believe a use is a fair use doesn’t mean the rights owner will agree with you. The situations where fair use applies to music for company use are probably not as broad as some people believe. In my view, it is rare for a company’s use of music in an advertisement or promotion to qualify as a fair use. There might be situations or circumstances of using music in training materials that result in credible fair use arguments.
25. Like many legal issues, the answers to music licensing requirements and rights clearance questions are sometimes unclear. Sometimes, the right approach depends on your tolerance for risk. Here are questions to ask yourself when conducting a risk assessment over music use – or any other creative material.
For more details and examples of these key points, you can listen to a recording of the entire “Using Music at Work” webinar at http://go.copyright.com/l/37852/2017-02-24/cg7t1z
Thousands of recorded songs are easily available thanks to Pandora, Spotify, Amazon’s Prime Music, and other streaming music services. Under which circumstances may a business use these services? In preparation for my "Using Music at Work" webinar presentation, I perused the license terms of a few streaming music services.
Streaming Music Is Usually Limited to Personal Use. Streaming music services generally restrict usage to personal, non-commercial use. Hence, if you are the owner of a business such as a barber shop, restaurant, retail store, or gym, you cannot use your typical consumer streaming account to offer music to your patrons. There are business license versions of streaming music accounts that allow some commercial use but . . .
Commercial Versions of Streaming Music Licenses Have Limitations. A business that offers performances of copyrighted music to the public (e.g., its patrons) must have a public performance license from the copyright owner of that music. In the United States, there are performing rights organizations (PROs) – ASCAP, BMI, and SESAC – that issue most of those performing rights licenses for songs. The benefit to obtaining your business music via a service is that the service handles all the necessary performance rights license acquisition work so your company need not directly interact with the PROs.
Typically, the business license offered by streaming music services is meant only for mood music. Mood music is that background music you hear at a doctor’s office, hair salon, or grocery store. One service states that the service does not include the applicable PRO fees if the business uses the service for music used to accompany dancing (including ballrooms, discotheques and dance studios), bowling, skating or instructed health club classes; or for music used in a location where a cover charge is charged.
Can a Business Use Streaming Music Service Just for Staff? My analysis uncovered some gaps and gray areas on this question. Licensing is required for the public performance of songs (and, in limited circumstances, of sound recordings). Licensing is not required for the private performance of songs or sound recordings. Disagreements on what constitutes a public performance versus what constitutes a private performance have sparked many lawsuits. Nevertheless, one can certainly credibly argue that a group of three co-workers listening to streaming music within the confines of their office is a private performance. As the number of employees in your business setting increases, the closer you get to that public performance threshold – music for 20 workers staffing the kitchen of a restaurant, music for 50 employees at a holiday dinner, music for 250 sales representative at the firm’s retreat??? It is not always clear where to draw the line.
However, arguments about a private performance might not always be relevant – depending on the specific licensing language used by the streaming service. Not all the streaming services use the phrases “private performance” and “public performance” in their terms of use. For example, some restrict use of their standard accounts to “personal, non-commercial” use. One prohibits use of music from the standard account in “any business establishment”. That terminology leaves gray areas too. If five colleagues and I operate a start-up from my home, am I in a business establishment?
You May Not Use Streaming Music as a Soundtrack for Your Original Audio and Audio-Visual Productions. Even though streaming music is played in real time and is not downloaded to your computer, it is possible to capture a copy of the recordings. But just because you can capture it doesn’t mean you should. Hopefully, all readers realize that the streaming services’ terms of service do not allow using the music as the soundtrack for your own production. In fact, there are several issues to consider when adding music to your company video.
I will address these and other issues related to the use of music within the work and office environment at a complimentary webinar, "Using Music at Work", sponsored by the Copyright Clearance Center on Thursday, February 23, 2017 from 1:00 pm – 2:00 pm EST. You can find details about the webinar at http://go.copyright.com/l/37852/2017-01-25/bjvkfz
I am the speaker for a webinar about uses of music within the work and office environment. The Copyright Clearance Center is sponsoring the complimentary webinar to take place on Thursday, February 23, 2017 from 1:00 pm – 2:00 pm EST.
Topics I will cover during the webinar include the following:
Music licenses and how they differ (with an emphasis on music licensing concerns related to company advertisements, promotional videos, training materials, and social media activity)
Potential costs and consequences of ignoring music licensing requirements
Sources of music for company use – from the reasonably priced to expensive, the easily obtainable to not-so-easily obtainable, and the (almost) risk-free to high-risk
For more information and to register for the Using Music at Work webinar, please visit http://go.copyright.com/l/37852/2017-01-25/bjvkfz
Your company produces a short video. To make the video more interesting, your company adds a popular song as a soundtrack. Your company now wants to post the video online. Any problems with that?
Yes, a few. There are a few music licensing issues you should address before posting that video.
NOT ROCKET SCIENCE; BUT NOT INTUITIVE EITHER
While music law is not rocket science, it is not always intuitive. The music license is called by a different name depending on (i) whether you are using the song, the sound recording or both and (ii) how you are using them.
THE COMPANY’S ASCAP/BMI LICENSE DOES NOT ADDRESS ALL THE ISSUES
Companies mentioning this video issue often wonder if they can rely on their existing license with ASCAP or BMI for posting of the video. No, they cannot, because ASCAP and BMI issue only public performance licenses. For imbedding a recording of a popular song into a company video, the company needs both a synchronization or “synch” license (for the song) and a master use license (for the sound recording). When you obtain synch licenses and master use licenses, any necessary permission to render a public performance should be incorporated into the synch license or master use license.
MAY THE COMPANY POST THE VIDEO ONLINE?
There might be some opportunities for the company to post the video on YouTube through YouTube’s Content ID System which permits postings of some videos with unlicensed music (by monetizing those videos for the benefit of the copyright owners). Otherwise, posting a video with unlicensed music on the company website or social media account can yield a DMCA take-down notice (along with a copyright strike against your social media account) and, in a worst case scenario, can generate a copyright infringement lawsuit against the company.
CONSIDER STOCK MUSIC INSTEAD
I characterize obtaining synch and master use licenses for commercially popular music as quite difficult – and expensive. That’s why I often recommend that clients consider the production music library route as part of creating ads with no copyright or trademark problems. Using music under a Creative Commons license is also a possibility to explore. However, Creative Commons materials typically come with no representations, warranties, or indemnifications and, for that and other reasons, using Creative Commons materials is not always risk-free.
Sampling entails using portions of existing music in your new recording. For example, suppose you sample “I Will Always Love You” for a track on your forthcoming album.
Does sampling require permission? Most likely, yes.
Sampling may sometimes qualify as a fair use meaning your unauthorized use of the music is not copyright infringement. Unfortunately, there is no bright line rule for fair use. Using eight or four or even two bars of music does not guarantee a fair use determination. Instead, fair use depends on the specific circumstances of each situation.
As a result, it is risky to rely on fair use for sampling. Most commercially released albums obtain licenses for all sampled music. Which licenses you need depends on how you sample.
Licenses for Sampling the Song
If you go into a studio and record your own version of “I Will Always Love You”, you need a license only from the song copyright owner. Dolly Parton wrote “I Will Always Love You”. Velvet Apple Music, the music publisher that administers rights in the song, is the company you would contact for a sampling license.
Depending on the extent your album features “I Will Always Love You”, Velvet Apple Music might request partial ownership of your new song as compensation for the sample. Alternatively, Velvet Apple Music might be satisfied with a flat fee or percentage of the revenue generated by your new song without an ownership interest.
Licenses for Sampling the Sound Recording
Suppose instead you want to sample Whitney Houston’s 1992 performance of “I Will Always Love You”. In that case, you need permission from the sound recording owner. As compensation, the sound recording owner might ask for a set license fee or for a royalty. Sony BMG/Arista, Whitney Houston’s record label at the time of the recording, was the original sound recording owner. I’m not certain in whose ownership the recording landed after Arista’s demise.
You can not use the sound recording without using the underlying song. As a result, if you use Houston’s recorded performance, you are also using the underlying Dolly Parton song. In that case, you need licenses from both the song copyright owner and from the sound recording copyright owner.
For an explanation of how songs differ from sound recordings, see the posting, What Is a Music Copyright?
There are a number of distinct deals that go into the making of a film soundtrack and a soundtrack album. In this blog posting, I go through the steps taken by a film production company when it needs music for its movie and wants to release that music on a soundtrack album.
Required Background Knowledge
There are at least two areas of the music business you need to understand before you can understand the deals behind the making of a soundtrack and soundtrack album.
Song Versus Sound Recording. Every recorded song has two distinct copyrights – a copyright in the song and a copyright in the sound recording. The copyright in the song is generally owned by the songwriter, or her music publishing company. The copyright in the sound recording is generally owned by the record company.
Music Publishing. I'll be referring to several types of music publishing licenses. If you need to brush up in that area, take a look at the four-part blog posting on Music Publishing: How Your Songwriting Generates Income.
Now onto the example
Step One – Acquisition of Songs for Your Film
The film production company acquires songs by either commissioning songwriters to provide original music or licensing existing songs.
Commissioning Songwriters to Provide Original Music. The agreements between the songwriter and the film company often look very similar to single song agreements between songwriters and music publishing companies. The song is frequently done as a work made for hire which means that the film company will own the copyright in the song. With some negotiating power, the songwriter might retain a portion or all of the copyright in the song. The songwriter is normally compensated by receiving a fixed fee plus a negotiated publishing royalty from specified non-theatrical uses of the music. The publishing royalty split is generally 50/50 – the same as the traditional royalty split between a songwriter and music publishing company.
Licensing Existing Songs. When a film production company wants to use an existing song in its movie, it needs a synchronization license (or synch license) from the songwriter or music publisher. If the film production company plans to do a soundtrack album, it will also need a mechanical license to authorize the recording and distribution of the song on the soundtrack album.
Step Two – Acquisition of Sound Recordings
If the film production company has commissioned original music, it will need to hire performers to produce a recording. If the film company has licensed an existing song, it can either use an already existing recording of that song or record its own version of the song. If it decides to use an existing recording of the song, it must also get a master use license from the record company that released the recording.
Step Three – The Soundtrack Album Deal
If the film company decides to work with a record company to release a soundtrack album, it enters a soundtrack album deal with the record company. A soundtrack album agreement between a film company and a record label has many similarities to a recording contract between a performing artist and a record label. The film company delivers a master recording of the soundtrack music to the record label. The record company pays the film company an advance and royalties on soundtrack album sales.
Important points of negotiation for the soundtrack album deal include (i) the amount of the advance and royalties to be paid by the record company to the film company and (ii) how the release of the soundtrack album will be coordinated with the release of the film.
If the film production company commissioned original music, and thus holds the copyright to the songs on the soundtrack, it will receive music publishing income (e.g., mechanical and performance license fees) in connection with the use of the songs on the soundtrack album. Normally, the film company shares this publishing income with the writer of the original music pursuant to the film company/songwriter agreement we talked about in Step One.
A small business that offers performances of copyrighted music requires a public performance license from the copyright owner of that music. This licensing
requirement extends to all types of small businesses including barber shops, restaurants, retail stores, and gyms. It doesn’t matter whether the small
business offers the music from a live band, CDs, a DJ, or the owner’s iPod playlist.
Public Performance Licenses for Songs Are Easy to Obtain
The good news is that the small business owner does not need to hunt down the copyright owner of each song for a license. That’s because most songwriters
and their music publishers affiliate with a performing rights organization (PRO) and those PROs issue public performance licenses on the songwriters
behalf.
The United States PROs are ASCAP, BMI, and SESAC. Each PRO issues blanket licenses that allow venues to perform any song in the catalog of that PRO.
The cost of the blanket license depends on how extensively the small business uses music. The blanket license for a nightclub will be more expensive
than the blanket license for a grocery store that wants background music for shoppers.
What Happens to Small Businesses that Play Music Without a License
Small business owners should take seriously the public performance license requirement. PROs do monitor compliance. Since business owners do not always
understand how they can and cannot legally use music within their establishments, the PROs do incorporate music licensing 101 training into their tactics.
However, when businesses fail to comply, as a last resort, PROs have been known to send an agent to the establishment, note any songs from the PROs
catalog played by the establishment, and then sue the establishment for copyright infringement. Those lawsuits typically result in the business paying
a damage award of a few thousand dollars for each song played so businesses should take the PROs demands seriously.
Some Exceptions and Alternatives to Licensing
There are some circumstances in which a small business would not need a public performance license in order to offer music:
Fairness in Music Licensing Act/Home Style Exemption Act. A small business can play the radio as long as the establishment does not charge patrons
a direct fee for hearing the radio broadcast. For this exception, there may be limits on the number of speakers used in an eating establishment that
is over 3,750 gross square feet or in a non-eating establishment that is over 2,000 square feet.
Muzak. Piped-in music service such as Muzak may be suitable for businesses that want only background music. The music service takes care of
obtaining all the necessary licenses.
Live Performances of Songs in the Public Domain. Offering performances of songs that are no longer copyrighted might work for establishments
whose patrons like live performances of classical music.