How Music Licensing Works

How Music Licensing Works

by Marshall Brain

Let's say you are reading Rolling Stone magazine, and you find an article about an ad campaign that Phillips has launched. The ads feature the Beatles hit "Getting Better". In the article you read this:

But according to the licensing expert, the company no doubt "paid a fortune" for the Beatles hit: an estimated $1 million. The source suspects Gomez made no more than $100,000.

This ad campaign is using the Beatles song as the theme music. It is also using the voice of the lead singer of the band named Gomez laid on top of the Beatles original. The speculation is that Philips paid $1 million to use the song, and that Philips paid the band Gomez $100,000.

This is the world of music licensing -- a world where the rights to use music are bought and sold every day. This world is most obvious to us in a case like the one described in this example. A popular song that everyone knows gets embedded in a TV commercial or a popular movie.

It turns out, however, that music licensing is something that happens constantly, all around us. When you listen to music on the radio, that music is licensed. When you hear music in a restaurant, that music is licensed too. In this article, you will have the chance to learn about all the different forms that music licensing can take.

The Basics

Music licensing in the United States is made possible by the protection that U.S. copyright law provides for artists. According to this article from the U.S. copyright office:

The copyright code of the United States (title 17 of the U.S. Code) provides for copyright protection in sound recordings. Sound recordings are defined in the law as "works that result from the fixation of a series of musical, spoken, or other sounds, but not including the sounds accompanying a motion picture or other audiovisual work." Common examples include recordings of music, drama, or lectures.

Copyright in a sound recording protects the particular series of sounds "fixed" (embodied in a recording) against unauthorized reproduction and revision, unauthorized distribution of phonorecords containing those sounds, and certain unauthorized performances by means of a digital audio transmission. The Digital Performance Right in Sound Recordings Act of 1995, P.L. 104-39, effective February 1, 1996, created a new limited performance right for certain digital transmissions of sound recordings.

So a sound recording is just that -- a recording of sounds.

 

There are several things that can be copyrighted in any sound recording for a song.

·        There are the actual sounds themselves -- the performance of the work.

·        There are the notes that the musicians play to create the song -- they could be embodied in sheet music.

·        There are the lyrics for the song -- they can be written down on a sheet of paper.

For example, let's say I sit down and I write a piece of music and entitle it "Electric Snik". I record it onto a tape using an electronic keyboard:

Let's say that I also come up with lyrics for a song called "She's So Incredible" that I sing to the melody of "Electric Snik". Now I play "Electric Snik" and I sing "She's So Incredible" while recording it on a tape recorder. If I send the tape to the U.S. copyright office with the proper forms and the registration fee, I will own copyrights for the song, the lyrics, and the actual performance recorded on the tape.

Technically, the registration process with the copyright office is not officially necessary in order for me to own the copyright. I actually own the copyright as soon as I create the song and write it down. However, to enforce the copyright in court, registration is required.

Once I have the copyrights, I can sell rights to the song if I choose to, and I can also prevent anyone else from using the music, the lyrics or the actual performance of the song. I "own" the whole song and all the rights to it. I can license the song in any way I choose.

Licensing the Song

In the case of a "real song", like something you would hear on a top-40 radio play-list, there are several different parties involved with the song:

·        The label owns the actual sound recording -- the performance of the song as recorded in the label's studio.

·        The publisher works on behalf of the song's composer (the person who arranged the music) and songwriter (the person who wrote the lyrics). The composer and songwriter probably own the actual copyrights for the song, and the publisher represents them in all business dealings.

If you want to use a song for any reason, you have to somehow obtain rights at least from the publisher, and possibly from the label as well (if you are planning to use a specific performance). Here are just a few examples of when you need to obtain rights:

·        You own a radio station and you want to play a song on your station.

·        You own a restaurant and you want to play songs as background music.

·        You are making a commercial and you want to use a song in the commercial.

·        You are making a toy and you want it to play a song when a child pushes a button.

·        You are making a video production and you want a song as background music.

Perhaps half a billion dollars trade hands every year through licensing fees.