music licensing

Music Licensing

Copyright Law grants rights:

Perform, Duplicate, Distribute, Display, Derivative (SR Performance through Digital Transmission)

Those rights may be licensed to others to generate income.

Two Basic Copyrights

PA - for the song and lyrics SR - for the Sound Recording (the fixed

sounds on the CD) Usually owner by different people

PA by Publisher/songwriter SR - by label

Big Four Licenses

• Performance (PA)

• Mechanical (PA)

• Synchronization (PA)

• Master Use (SR)

Master License

Master Use License - Master Sampling License Master Ringtone License All to Use the Master Recording, Rather

than Only the Song

Use in Film

Require Two Licenses Master License to use the Original

Recording in the Movie Synchronization License to use the Song

in the Film Soundtrack Album Requires Mechanical

License

Sampling

Copyright Owners Want A Copy of the New Work Explanation of the Use Rights Requested: Album, Video,

Promotional Uses, Third Party Uses. Copublishing Deal Worked Out

Performance Rights Organizations (PROS) American Society Of Composers,

Authors, and Publishers (ASCAP) Broadcast Music Inc (BMI) Society of European Stage Authors and

Composers (SESAC) Typically Blanket Licenses, but 1993

Court Ruling Said ASCAP must Offer “Per-Program” Licensing

Performance

PROs Blanket License for their Entire Catalog

Collect $2 Billion ASCAP & BMI nonprofit, (18-20% for

overhead) SESAC is for profit but does not publish

expenses

PROs

License all Radio & TV, Cable 10% - 15% From Non Broadcast (Hotels,

Arenas, Airlines, Schools, Restaurants, Bars, Concert Promoters, Skating Rinks, Dance Studios, Symphonies,

Blanket Performance License

Users of music usually buy a Blanket License to cover all music.

Clubs charged by seating capacity, admission charged, weekly music budget,hours of entertainment

The Fairness in Music Licensing Act of 1998 exempts certain small businesses (sq ft and number of speakers)

Blanket Performance License

The owner of the venue is usually required to buy the license

For stadiums/arenas the promoter often pays

Performers, agents, and managers do not pay.

Census vs Sample

Census is a 100% count Sample is a statistical Techniques: random samples, cue

sheets/program logs from TV & movies, Broadcast Data Systems (BDS) or

MEDIAGUIDE computerized tracking system

Foreign Collections

Subpublishers usually collect Or, ASCAP, BMI, & SESAC work through

foreign PROs

ASCAP

American Society of Composers, Authors, and Publishers ( www.ascap.com )

1909 Copyright Law gave the right of performance

ASCAP founded 1914 Income: 50% TV/cab.e, 25% radio, 20-

25% foreign licenses, clubs & other venues

ASCAP Licenses List Airlines Auto Racing Tracks Background/Foreground Music Service Baseball - Leagues and Teams Basketball - Leagues and Teams Body Building Contests Bowl Games Bowling Centers Boxing Buses

C-D

Campgrounds Carnivals Circuses Clogging Colleges and Universities Concerts and Recitals Conventions, Expositions, Industrial Shows, Meetings and Trade Shows Dance Clubs and Associations Dancing Schools - Individual and Chain Direct Marketing/Distribution Companies Dog Racing Tracks Dog Shows and Competitions Drive-In Theatres - Recorded Music

TOP

F-G-H

Family Shows Festivals Football - Leagues and Teams Football (College) Bowl Games Funeral Establishments - Individual and Chains Grand Prix Auto Racing Gymnastic Competitions Halls of Fame, Wax Museums and Similar Establishments Helicopters Hockey - Leagues and Teams Horse and Harness Racing Tracks Hotels and Motels

I-J-L-M

Ice Skating Rinks Jai-Alai Frontons Jewish Community Centers Jukeboxes Lacrosse - Indoor and Outdoor Laser Shows Local Government Entities Marine Vessels with Overnight Accommodations for Passengers Motion Picture Theatres - Music Supplier Motion Picture Theatres - Individual and Chain Motorcycle Racing/Motocross Multi-Media Film Program Municipalities Museums Music-In-Business Music-On-Hold TOP O-P-R

Playgrounds (Indoor) - Individual and Chain Polo Matches (Horses) Professional Speakers Private Clubs Radio-Over-Speaker Music Supplier Radio Stations - Local Restaurants, Taverns, Nightclubs and Similar Establishments Retail Stores - Individual and Chain Rodeos Roller Skating Rinks Roller Games/Roller Derby

S-T

Shopping Centers and Shopping Malls Skating Competitions Skating Rinks - Ice or Roller Soccer - Teams and Leagues Speakers, Professional Square/Round Dancing Symphony Orchestras Telephone Music Service Television Chairs Audio-Visual Uses Television Stations - Local Tennis Competitions Theme and Amusement Parks Tractor Pulls Train Cars Training and Development Sessions, Educational or Informational Seminars V-W-Z

Video Services Volleyball - Indoor and Outdoor Web Sites Wind Ensembles Wrestling YMCA/YMHA/YWHA/YWCA Zoos and Aquariums Owned and Operated by Non-Profit Organizations

ASCAP Membership

1 song published & distributed, or Professionally recorded, performed at a licensable by ASCAP

200,000 songwriters, composers, & publishers

Governed by Board 12 writers, 12 publishers

Weighing Performances in Media

Medium (radio, TV, cable, local) Weight of the station based on license fee Weight of the network Time of day Type of Performance (theme,

background, feature)

BMI Broadcast Music Inc .( www.bmi.com ) Owned by stockholders (475 broadcasters) No

dividends have ever been paid Formed in response to ASCAP’s increasing fee,

provided competition Because they signed, C&W, R&B, Jazz, & Folk

composers, they owned 90% of early rock.

BMI Members

Written a song published or recorded, or “likely” to be.

A fee for publishers Broadcast royalties paid 4xs per yr,

foreign performances 2xs per yr, commercials & concert performances 1x per yr.

SESAC

Society of European Stage Authors & Composers, founded 1960, known as SESAC since 1960.

Privately owner, for profit Embraced technology early (DBS) Uses Digital Fingerprint for Jazz &

Americana Stations

Sound Exchange

Created in 2000 (RIAA) independent in 2003

Collects Performance Royalties for Digital Transmissions (internet radio, cable TV music channels, satellite radio, streaming services)

2013 Distributed $1B in digital royalties

Mechanical License

Most Mechanical Licenses are “negotiated” Lower royalty rate Accounting Quarterly rather than monthly “notice of intent” is waived

Harry Fox

Most publishers use Harry Fox to issue Mechanical Licenses, 8.5% fee

Will collect foreign royalties for small publishers, 5-20% fee

Synchronization License

Movies & TV 2 licenses, Sync & performance for

Stations (and foreign theaters) Producer may hire composer as “work-

made-for-hire” thus is the owner Fees vary: length, feature on camera,

underscore

Sync cont.

Want broadest possible sync license: foreign theaters, TV & cable, home vedio.

Publishers may want to limit time of license to benefit later

Foreign PROs grant blanket license fot theaters, changing small % of box office.

Sync License

Info for Sync License: type of use (background, vocal, background instrumental, instrumental), length, territory, term of license, format (film, TV, TV movie, syndication, trade movie, DVD, etc.)

Can’t Get Paid Without A Cue Sheet

Used to document music used on TV shows

Types of use BI: Background Instrumental VI: Visual Instrumental EE: Logo BV: Background Vocal VV: Visual Vocal TO: Theme Open TC: Theme Close

New Use

Using a pre-existing recording involves: Sync, Mechanical and unions (AFM, AFTRA) new use payments

Music Videos

Sync license Shown on TV uses the blanket license Cable TV (MTV etc.) Video discs etc., not part of mechanical,

negotiate with publishers

Video Games

Pre-existing song issues: success of song used, type of game, distribution

Description of game configuration: platform/computers, existing electronic or those developed in the future, DVD/CD-ROM, arcade consoles, handheld devices, cell phones, on-line, wireless

Video Games cont.

Fees: some royalty based (.08-.15 cents), most one-time buy-out $2,500-$20,000.

Fees based on: value of composition, prior history, anticipated sales, bargaining power, needs of game produces vs publisher/songwriter

Transcription Licenses

Syndicated programs, Muzak, in-flight, music library

Muzak uses Master License fixed fee based on franchised dealers, others may pat .05 per copy ($.02 for mechanical, $.03 for performance)

Special Use Permits

Merchandising tie-ins, posters, clothing, greeting cards, toys

Commercials

Grand Rights

Dramatic Music: operas, plays, musical shows, revues called “Grand Rights”, use of individual songs are “Small Rights’

Broadway Musicals, rights regulated by the Dramatists Guild Inc. Rights retained by authors & composers. Rentals from Samuel French, Tams-Witmark, Rogers & Hammerstein Music Library.