1. Music Licensing Chapter Seven

2. A film producer wishes to use a published piece of music.
Start Thinking . . .
A film producer wishes to use a published piece of music.
How does he go about obtaining the license to do so?
With whom does he negotiate?
What kind of licenses are required?
How does the money he pays end up in the hands of the copyright holder?
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

3. Chapter Goals
Learn that licensing is the process through which copyright ownership is controlled and made profitable.
Discover how licensing organizations function to collect and disburse royalties paid for music performances.
Examine the similarities and differences among ASCAP, BMI, and SESAC.
Gain awareness of the different kinds of music use licenses, particularly mechanical and synchronization licenses.
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

4. Music Rights: An Overview
Protected music can only be used after permission (license) granted
Path of creation of copyright to collection of cash = heartbeat of music business
Most common licenses
Performance license
Synchronization license
Mechanical license
Master use license
Compulsory license
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

5. Music Rights: An Overview
[Insert Table 7.1]
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

6. Performing Rights Organizations
Largest source of income for many composers and publishers = licensed public performances
U.S. nonsongwriter artists historically not received performance royalties
PROs
issue licenses
collect and distribute royalties
issue blanket performance licenses (vs. source licenses)
collect more than $2 billion annually
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

7. Keeping Track of the Music
PROs monitor marketplace data
Royalty distribution
determined by number and kind of performances
Foreign collections
Berne Convention
Foreign subpublisher
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

8. Membership Options
Songwriters can affiliate with only one traditional PRO
American Society of Composers, Authors and Publishers (ASCAP)
oldest PRO for songwriters
large income from multiple licensees
big membership
Broadcast Music Inc. (BMI)
Launched as a counterweight to ASCAP
Historically promoted hot new genres (rock)
About the same revenue as ASCAP
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

9. Membership Options SESAC SoundExchange
For-profit company with smaller, select songwriter base
Expanding its reach (e.g., acquiring The Harry Fox Agency)
SoundExchange
Unique PRO representing labels and performers—not songwriters
Very fast-growing revenue from digital transmission
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

10. Mechanical Licenses
For recordings distributed commercially only for private use
Negotiated mechanical license differs from statutory compulsory license
royalty rate may be lower
quarterly royalty accountings
“notice of intent” waived
The Harry Fox Agency, Inc.
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

11. Synchronization Licenses
Music timed to synchronize with action on the screen
Movie rights
Synchronization license fees vary
European considerations
TV program rights
New use rights
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

12. Cable Television Licenses
Blanket licenses
Compulsory license from Copyright Office
Other cable TV network licenses
Network agreements
Satellite Home Viewer Act of 1988
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

13. Not addressed by 1976 Copyright Act Consensus:
Video Licenses
Not addressed by 1976 Copyright Act
Consensus:
All videos defined as audiovisual works
Performance rights must be acquired by the party who shows videos to public
Payment to publisher for right to reproduce videos
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

14. Transcription Licenses
Music used by syndicated programs, background music companies, in-flight entertainment, music library services
Require mechanical license and performance license
Negotiations with publisher or HFA
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

15. Video (electronic) games
Special Use Permits
TV commercials
often include the right to alter the words and music
buy-out deal
Video (electronic) games
license negotiation based on many factors
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

16. Performance licenses for nondramatic music JLO blanket license
Jukebox Licenses
Performance licenses for nondramatic music
JLO blanket license
covers the use of music from all three PROs
JLO handles rebates and new jukebox registrations
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

17. Dramatic Music Rights
Compositions used in the context of a wider piece or in the telling of a larger story
Grand rights and small rights
ASCAP, BMI, SESAC handle small rights, but usually not grand rights.
Broadway musical subsidiary rights
Dramatic performances require
license
royalty payment
rental of show’s book, score, and parts
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

18. Creative Commons
Nonprofit corporation founded in 2001 to facilitate the distribution of copyrighted works
The typical CC license
gives “baseline rights” to worldwide distribution
does not allow changes
is free of charge
requires copyright holder consent for use
Most publishers do not allow CC licensing
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners

19. For Further Thought . . .
What are the implications of smartphones and other digital devices on synch licenses?
Discuss the various licenses that may be required for music in film.
Compare BMI, ASCAP, and SESAC in respect to their ownership and not-for-profit status. What are the advantages and disadvantages of joining either ASCAP or BMI?
Music Business Handbook and Career Guide, 11th Ed. © 2013 Sherwood Publishing Partners