Music Licensing

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Music Licensing

  1. 1. 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.
  2. 2. 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
  3. 3. Big Four Licenses • Performance (PA) • Mechanical (PA) • Synchronization (PA) • Master Use (SR)
  4. 4. Master License  Master Use License -  Master Sampling License  Master Ringtone License  All to Use the Master Recording, Rather than Only the Song
  5. 5. 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
  6. 6. 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
  7. 7. 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
  8. 8. 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
  9. 9. PROs  License all Radio & TV, Cable  10% - 15% From Non Broadcast (Hotels, Arenas, Airlines, Schools, Restaurants, Bars, Concert Promoters, Skating Rinks, Dance Studios, Symphonies,
  10. 10. 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)
  11. 11. 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.
  12. 12. 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
  13. 13. Foreign Collections  Subpublishers usually collect  Or, ASCAP, BMI, & SESAC work through foreign PROs
  14. 14. 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
  15. 15. 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 
  16. 16. 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
  17. 17. 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)
  18. 18. 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.
  19. 19. 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.
  20. 20. 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
  21. 21. 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
  22. 22. Mechanical License  Most Mechanical Licenses are “negotiated”  Lower royalty rate  Accounting Quarterly rather than monthly  “notice of intent” is waived
  23. 23. Harry Fox  Most publishers use Harry Fox to issue Mechanical Licenses, 8.5% fee  Will collect foreign royalties for small publishers, 5-20% fee
  24. 24. 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
  25. 25. 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.
  26. 26. 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.)
  27. 27. 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
  28. 28. New Use  Using a pre-existing recording involves: Sync, Mechanical and unions (AFM, AFTRA) new use payments
  29. 29. 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
  30. 30. 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
  31. 31. Video Games cont.  Fees: some royalty based (.08-.15 cents), most one-time buy-out $2,500-$20,000.  Fees based on: value of composition, prior history, anticipated sales, bargaining power, needs of game produces vs publisher/songwriter
  32. 32. Transcription Licenses  Syndicated programs, Muzak, in-flight, music library  Muzak uses Master License fixed fee based on franchised dealers, others may pat .05 per copy ($.02 for mechanical, $.03 for performance)
  33. 33. Special Use Permits  Merchandising tie-ins, posters, clothing, greeting cards, toys  Commercials
  34. 34. 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.

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