Media Music Blog

With the growth of online communities like MySpace and the virtual world of Second Life, which has over 1million members and its own economy, it seems that the more sophisticated the online world gets the more complicated the music royalty / copyright situation becomes.

Technology is creating more opportunities for music use and the corporate giants are reacting by suing people and are attempting to apply historical royalty collecting models to technologies that they have little understanding of.

There now seems to be a global epidemic of copyright infringement and we have a generation that think music is free. I personally don’t think the knee jerk reaction of the industry helps; in fact, it further alienates music fans.

It seems that many independent rights owners, composers and artists that use the web are more flexible about when and how their works can be used. I believe movements like Creative Commons may be part of the way forward as this enables the creator to have more control over which rights they reserve, effectively meaning that they can offer limited free usage whilst reserving the right to generate a revenue from their works.

In my opinion, people should be taught the value of music but feel that the heavy handed approach of the mainstream industry is alienating the generation of people that could well be useful in finding a solution. Why did Universal not try and work with MySpace and MySpace users to create a revolutionary new music platform within MySpace?

Furthermore, the myriad of royalty areas and restrictions around music use make it far too complicated for most people to want to understand.

Now that people can play music in Second Life, I do wonder what stance the mainstream industry will take on this. Effectively, you have people playing their own music collection in their virtual houses and bars. There is an obvious performance royalty issue here; people have music playing that other members of the public can hear. What will the industry do? Will they sue every one in Second Life?

You could be playing music privately in your own virtual garden or on the virtual beach and other people could teleport or walk in and be able to hear your music. Technically, you are then hosting a performance.

Is it time yet to rethink copyright and royalty policies on music use?

I am watching this one with interest indeed

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I have been in many discussions about the role of PRS I have been asked the following question numerous times by new composers and bands.

When should I join PRS?

In short I would say it is a judgement call on your part. In my experience, there are certain old school managers / music industry advisers that will have you believe it is the first thing you need to do in order to get paid. This is not strictly true!

PRS collect money from performances and broadcasts of your musical works. However, due to the huge task of monitoring this, PRS use a system of census that actually means that your music can be played yet missed by the census.

I think PRS do a great job for many composers / artists, but I do not think joining up should be the first thing you consider doing. In my opinion, I think it is worthwhile paying the admin fee and joining if you know that your works are being broadcast on major Terrestrial TV channels. If you are just being played on local radio for a few weeks a year, it is extremely unlikely that you will get any revenue. If you do it probably won’t recoup your admin fee.

So, in short, don’t join because somebody that apparently knows the industry tells you to.

Do some research, get the facts and join only when you think you will benefit financially.

Resources

• www.prs.co.uk - Performance royalty collecting society UK

This guy knows what he is talking about and has a detailed article about royalties.

• http://www.bemuso.com/musicbiz/collectionsocieties.html

This is cut and paste from the www.prs.co.uk…

Methods of using performance data for royalty distribution

census – full returns of all music played.

Where revenue is sufficient, PRS will distribute it to all the works performed. While it is the Society’s desire for this to be applied to all performances, at present it is only achieved for national terrestrial broadcast performances and certain major concerts.

sample – a subset of returns of all the music played.

In many cases the cost of collecting and processing details of all performances would be more than the revenue available. In these cases PRS collects information about some of the performances and uses that to represent all of them. These samples might be certain days in a broadcasters schedule, or certain concert events and are selected at random to reflect their overall value.

projection – returns of music from one source used to distribute another source

There are many uses of music, such as CDs and tapes for background music in shops and restaurants, where the actual value of each performance is probably only a few pence. In these cases it is too costly to create an effective sample. Instead PRS creates a statistical calculation of other music data based on a small survey of actual performances.

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The Question…

Hello Mr. Pritchard,
I read your article on Music Licensing in the latest issue of the Galaris newsletter. My concern is, I am a songwriter/publisher member with BMI. I’ve had several of my mp3 music tracks performed or featured on various podcast productions but I haven’t seen any royalty payments from those performances. All of the songs featured or performed are registered with BMI. I appreciate the exposure but should BMI send me a royalty check for those performance of my music? What am I’m doing wrong? I look forward to your reply.

Thanks

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Lee Pritchard’s Answer…
Hi Gregory

Thank you for your question.

The BMI Internet Music license covers usage of any BMI music in podcasts. Once the podcaster has a license BMI request music usage reports identifying all of the music works used. As I understand it, it is not clear how royalties are calculated and paid out to BMI songwriter / publisher members.

(more…)

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Now that you have an understanding of the basics, explained in Part 1, you are now ready to look at the options for licensing music.

Mainstream Music

It is possible to use mainstream music, but it is costly and often a convoluted process. The reason for this is that there are many people in the royalty chain wanting a slice of the revenue. Quite often you will have to negotiate a license with publishers, record labels, royalty collecting societies and so on. It is not a trivial task and you will need deep pockets!

Royalty Free Music

This can be the most affordable route by far, however, you will be limited to original music and you will need to find a good source of quality Royalty Free music. This should not be too hard to do on the web but you will find that there is a lot of poor quality music out there.

The biggest issue with Royalty Free music is the license agreement itself. There is no standard agreement and for this reason they vary from company to company.

You need to make sure that the mechanical rights allow you to make the right number of duplications for your project. Many licenses have small print that limits the number of copies you can make before you have to pay additional fees, sometimes known as a ‘mass duplication license’.

Another big issue is the performance royalty. Most Royalty Free music does not cover this and you will be expected to fill in cue sheets for use in broadcast. What many people overlook is the fact that a broadcast is not just TV or Radio. It is many things including podcasts, websites and flash use.

If the small print states that cue sheets need to be filled in for broadcast, this implies that the music is registered with a performance collecting society who collects revenue for broadcast and performances. This can include exhibitions, vending machine music, on hold music and music in power point presentations, websites and flash. Hardly straight forward!

There are some Royalty Free music sellers that claim their music is 100% Royalty Free. This is true when all aspects of royalties are covered in the license agreement. With 100% Royalty Free you should be completely covered by a one-time payment. But do check the small print… any mention of filling in cue sheets means that the music is not 100% cleared for a number of uses, as described above.

Commissioning a Composer

Commissioning a composer to write a custom piece of music for your project can have two advantages. Firstly, the music will be created with your project in mind and should be a tailored fit. Secondly, much if not all of the licensing can be arranged between you and the composer giving you added flexibility.

For example, if you wish to pay a one-time fee you might require synchronisation with a number of different media types. You may also wish to make a specific number of copies and include certain performance / broadcast options within the agreement. This can all be discussed, drawn up and agreed between you and the composer.

On the other hand, you may be creating a TV programme and decide that performance royalties will be paid by the various broadcasters and collected by the collecting society of that territory.

Conclusion

In a digital age where everything can change quickly and where new copyright and royalty policies are constantly being developed, it can be easy to get confused and unsure what to do for the best. For this reason alone, it is best to have a basic knowledge of royalties and licensing.

Another point we have to remember is that music licensing is there to help composers and artists make a living. For an independent composer this can be the difference between making a living from music or having to get a day job.

I hope theses articles have gone someway to clarifying the issues that surround music licensing and have helped you to consider a licensing route that best suits your needs.

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In this digital age using music in web-based presentations, business applications, products or services has a number of legal implications for you and your business. Minimising copyright issues can be relatively simple and a little knowledge about music licensing can set you off in the right direction and keep you safe for the future.

This two-part article will provide a basic understanding of music licensing and the royalties included in a license agreement. It will serve you well when licensing music and is a starting point for more in-depth research.

What is a License and Why is it Needed?

Put simply, you need a license in order to use music legally. Whether you are using music at home or in a commercial project it will require a license. In the example of home use, the CD you buy from a music store is a license to listen for your own personal pleasure. You are not able to reproduce it or broadcast it in any way.

If you wish to use music as part of your business or in a commercial project you will need to get the relevant licenses depending on your usage. The fee you will have to pay will vary depending on the scope of your project and whether the music is mainstream.

Arranging clearance to use mainstream music can be a complicated process and can require a large budget. In comparison, using original music from an independent composer is less complicated to license and can easily fit into your budget.

Basic Parts of a Music License

The Agreement

When you purchase a license you are paying a fee to have certain rights assigned to you for a defined period. This is subject to the terms and conditions of the agreement. Your agreement will detail where and how you can use the music and will also point out the limits or restrictions of the license. The copyright does not become yours, it remains with the composer – you have only been assigned some of the rights.

Exclusivity

Music can be licensed on an exclusive or non-exclusive arrangement.

An exclusive agreement means that you are the sole user during the life of the agreement and nobody else can use it for the same purpose.

Non-exclusive usage means that anyone can license the music at anytime.

Territory

Music is traditionally licensed within certain territories of the world. This is because the royalty collection societies tend to operate within their own country rather than globally.

Recently, there has been an increase in digital delivery of music with agreements covering worldwide use that bypass the royalty collection societies.

Strange but true, some license agreements even make provision for intergalactic use!

Term

The term is the period of time that you are able to license the music for. This can be from as little as one day or as much as 100 years.

Synchronisation Rights

In order to include music in a product or production you have to pay what is known as the synchronisation or sync fee. There are no standard prices set by the industry for a sync fee and the fee can be open to negotiation.

Mechanical Royalty

The mechanical royalty covers the number of duplications you wish to make of your product. The mechanical royalty collecting societies have set rates for these, however, some composers / companies are now starting to use digital delivery and will license music directly without using the collecting societies. This can get you a better deal and give you the rights to produce a specified number of reproductions within the license agreement.

Performance

Performance royalties are due anytime music is broadcast on websites, TV, radio, podcasts, etc, or played at public exhibitions, events, public houses etc.

Quite often a license agreement will exclude coverage of these, making it the responsibility of the person or company broadcasting the music. This involves paying an additional fee to the performance royalty collecting societies. Many Royalty Free licenses operate in this manner.

There are occasions where a company or composer will cover the performance element in the license fee you pay, but you have to be clear about this, either by negotiating with the composer or checking the small print before purchasing.

Conclusion

Music licensing is a lot simpler to understand once you know the basic components of an agreement and what they actually cover.

Part one of this article should have given you a good basic knowledge of licensing agreements. Part two explores the options available to you as a music licensee.

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