What is a license?
Licensing comes into play when someone wants permission from a rights holder to use music in some way. These licenses can be exclusive (i.e. no one else can use the music) or non-exclusive. There are many types of licenses musicians should be aware of. Oftentimes, musicians don't understand how they are getting paid, both on the master side and composition side. Below is a brief list of licenses common the the music industry:
Synchronization License - The most common type of license negotiated is a "synchronization license" (or a sync license for short) where music is synchronized with visual images: the most common of which is a sync license from a studio to use music in a movie. Sync licenses also come about through television (shows and commercials), audiovisuals on the internet and more. The amount paid for sync licenses is all over the map, based upon the notoriety of the song, how the song is used (i.e. background music or during the credits), the budget of the company requesting the license, and much more. Keep in mind a sync license has to be obtained for both the master and the underlying composition.
Blanket License - A deal negotiated for more than one rights holder. For example, your Performance Rights Organizations (ASCAP, BMI, SESAC) negotiate blanket licenses for your music to be used in places like restaurants, concert venues and radio. Your record label or digital distributor also negotiates blanket licenses with streaming services such as Spotify.
Compulsory Licenses - There are five major exceptions to the general rule that a rights holder has exclusive rights over their music. I won't go into detail for every scenario, but most important are non-interactive streaming (e.g. Pandora) and the compulsory mechanical license (i.e. the right to record a cover song). These licenses are automatically granted, and the rights holder receives royalties set by the government.
How do I assist when licensing is involved?
My services often come into play in two scenarios: (1) the preparation/review of a license and (2) contracts between licensing companies and musicians. The licensing company seeks permission to "pitch" the music to networks and advertisers, and often split the "sync fee" with the musician 50/50.
There are so many things to consider, both when licensing music directly, or signing a deal with a licensing company. This includes exclusivity (can others use/pitch your music), the length of the deal, the specific ways the music is going to be used, and of course, how much is the musician getting paid.
You also have to consider how income received from a license effects your record/publishing deal (i.e. does it count toward recoupment, are you getting a large royalty rate for sync fees, etc.).
Have more questions? Contact Colin now.