Music licensing is the licensed use of copyrighted music. Music licensing is intended to ensure that the owners of copyrights on musical works are compensated for certain uses of their work. A purchaser has limited rights to use the work without a separate agreement.
The following words and phrases appear in discussion of music licensing:
- the right, granted by the copyright holder or his/her agent, for the broadcast, recreation, or performance of a copyrighted work. Types of licensing contracts can include: 1) a flat fee for a defined period of usage, or 2) royalty payments determined by the number of copies of the work sold or the total revenues acquired as a result of its distribution. In addition to a basic fee, most music licensing agreements require additional payments to the copyright owner when the work in which it is included (i.e. movie, play) is financially successful above a certain threshold.
- the owner of the licensed work
- the person or entity to whom the work is licensed
- the public performance of a musical piece, whether live or recorded, performed by the original artist or someone else, whether the performance keeps to the original version or is adapted or changed in some manner. Playing a music CD (or tape, etc.) in public is "performing" the work.
- playing live or recorded works, including radio, TV, webcasting, podcasting, etc., to multiple listeners in a setting such as a bar or bookstore. (Note: Using this definition and the previous one, you find the information that leads to phrases like 'live broadcast performance'.)
- performing rights organization
- large companies that hold performance rights for copyrighted musical works. The best-known are American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music Incorporated (BMI), Society of European Stage Authors and Composers (SESAC), and La Asociación de Compositores y Editores de Música Latinoamericana (The Association of Composers and Publishers of Latin American Music, ACEMLA), in the U.K., the Performing Right Society for music, and Phonographic Performance Ltd. for licensing recordings and music videos. These companies license public performance on a non-exclusive basis of the music they own or hold under contract using a complex weighting formula to distribute the fees to the respective rights holders. The license may be a blanket license, but individual licenses may be negotiated.
Rights organizations sample radio and television broadcasts, offer blanket licenses to broadcasters, and investigate complaints to detect and prevent unauthorized performances.
In the U.S., ASCAP and BMI hire field agents to monitor public performances. The field agents may act as agents for the organization, negotiating a fee for a blanket license, but individuals may negotiate directly with the organization. The fee may be presented on a take-it-or-leave-it basis, but in case of disagreement the fee may be appealed to the Federal District Court in the Southern District of New York.
- pre-cleared music
- music that is covered under a prior agreement which allows distribution and legal use under specific circumstances. The license may be for use in film, video, television (commercials and programs), Internet, events in live venues, video games and multimedia productions.
- literally, 'the right to copy.' The owner of a copyright has five exclusive rights: reproduction (copying), preparing derivative works (adaptation), distributing copies to the public, performing the work publicly, and displaying the work in public. Prior to 1886, no effective international law of copyright existed. The first major international copyright law conventions were the Berne Convention for the Protection of Literary and Artistic Works created in 1886. In the United States, for works created in 1977 and after the work is protected by copyright when it is "fixed in any tangible medium of expression," without the need to register it with the U.S. Copyright office. A work must be registered, however, before a copyright owner may bring suit for infringement.
- synchronization licensing
- the licensing of musical works to be synchronized with moving pictures as background in a motion picture, television program, video, DVD, etc.
- master use licensing
- the licensing of the recording of a musical work to be performed as a soundtrack, bumper, lead-in or background to a motion picture.
- for the purposes of copyright, a publisher is the owner of the copyrighted work. It is now standard practice for songwriters of even the slightest prominence to form a publishing company as a separate legal entity to hold the rights to their work. Continued use of the - now somewhat anachronistic - term "publisher" reflects the state of media at the time of the Berne Convention, when all music distribution was done on paper as sheet music or player piano rolls.
Broadcasting, in the context of music licensing, means the playback of recorded or live music for groups of people beyond what might be normally expected in a social setting. Legal claims are filed frequently against bookstores, bars, and live music venues that broadcast music without first obtaining a performance license.
The music broadcast in grocery stores and elevators is a service which is purchased from one of many organizations that offer it (the largest of these is Muzak). Part of the fee paid for this service is used to cover licensing costs. Except in very narrowly defined circumstances, noted below under the Section 110 "small business exception," a business, restaurant, or store which plays radio broadcasts or shows TV programs in the premises must pay a licensing fee.
Radio stations pay fees to licensing bodies for non-exclusive rights to broadcast music. Radio stations and businesses typically pay a flat rate once a year, called a blanket license, which can vary based on the size of the audience, value of the advertising revenues, and amount and nature of music usage. As part of the license contract a radio station may conduct periodic audits of the music being played, with the audit results submitted to the licensing body.
When a song is cleared for usage on a TV show, historically to save money the clearance typically only applies to television airings of the show in question. Thus, when the show is considered for DVD distribution to the home video market, the rights to the song must be renegotiated in order for the song in question to be included on the DVD. Most producers/production companies now include the rights for DVDs or "all media now known or hereafter devised." This assures production companies of the right to re-release without incurring additional licensing fees.
If the process of clearing the rights to the song is prohibitively expensive for the home video distributor, or if clearance is refused by the copyright holders of the original song, the affected song is either replaced with a similar (sound-alike) one, or the footage containing the copyrighted song is edited out. In a few cases, television shows which make extensive use of copyrighted music such that the cost of "after-market" licensing is high are withheld from release on DVD; Notable examples include The Wonder Years, WKRP in Cincinnati, Third Watch (beyond its first two seasons), and Cold Case. Home video release of a number of television series and films have also been delayed and occasionally cancelled for this reason; for example, Sony Entertainment cancelled the planned October 2007 DVD release of Dark Skies for this reason, but it was eventually released on January 18, 2011 through Shout! Factory.
With certain exceptions, live performances must be licensed. In the U.S., the owner of a bar, cafe, or restaurant who wants to have live music usually will obtain a blanket license from ASCAP or BMI to play musical selections which they control. If a license is obtained from one company but not the other, only the music from that company may be performed. The Association for Concert Bands (ACB) offers a blanket license to community bands which covers both ASCAP and BMI lists. At the end of the year the band completes a spreadsheet showing how often each song was played during the year, which the ACB submits to the rights organizations.
Purchasing a copy of the sheet music for a copyrighted work does not give the purchaser the right to perform the music. A separate performance license must be obtained. Someone who listens to a piece of music and learns to play it must obtain a performance license before he/she may perform it in public in a commercial setting. A new arrangement for a copyrighted work is a derivative work. Permission of the rights holder is required before the work may be published, copied, or performed in public. (There now may be two copyrights, one on the original work, and a second copyright on the "new" material contributed by the arranger.) An arrangement of a traditional song or piece of music will be protected by copyright, even though the original piece is in the public domain. Every new arrangement receives a copyright. There are some exceptions to the requirement for a performance license. One set of exceptions come under the Fair Use doctrine. Another set of exceptions are situations covered under Section 110 of the copyright statute.
The Fair Use Exemption
The Fair Use exemption is an ill-defined, fact-based doctrine, decided by courts on a case-by-case basis. It has very limited applicability in the area of music performance and makes a weak defense in an infringement case. The use of a copyrighted work “for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright."  There is no way in which the public, unlicensed performance of an entire piece of music can be brought under the protection of Section 107. In spite of folk wisdom to the contrary, there is no “three second rule” for copying or sampling recorded music. There is no rule which says that “four notes” can be copied without penalty. Instances which come under the fair use exception might include criticism or comment. Criticism need not be negative. If a jazz soloist quotes a phrase from a well-known solo by another player, it might be viewed as an homage. Music sampling has been aggressively pursued by copyright holders as a form of "free riding" but might be interpreted as a transformative use.
Section 110 Exemptions
Section 110 sets out eleven situations in which performance of a work, including broadcast, "are not infringements of copyright”  The major exemptions are outlined in paragraphs one through five. Paragraphs one and two cover face-to-face instruction, or "distance learning" in non-profit educational settings. Paragraph three applies to performance or display in religious settings as part of a worship service. Paragraph four applies to non-dramatic literary or musical works (but not plays or video) performed by non-profit groups such as a community band or orchestra. Paragraph five is the "small business" exemption.
A performance license need not be obtained if the work is performed or displayed “by instructors or pupils in the course of face-to-face teaching activities of a nonprofit educational institution.” 
A film shown as part of a fundraiser, or a film series might not qualify as “face-to-face teaching activities.” Instruction given to corporate or government employees would not qualify as a “nonprofit educational institution.”
Paragraph (2) creates a similar exemption for distance learning. A work may be performed or displayed through transmission to students enrolled in a course, or to government employees as part of their duties, without requiring a performance license. The exemption does not apply to works produced and sold for online distance learning. The performance or display must be made under the direction of the instructor and directly related to, and in aid of, what is being taught – it cannot be used as a pretext for transmission of other works. Nondramatic literary or musical works may be performed in their entirety. For other works, such as display of a film or painting, the performance must be “reasonable and limited.” The exemption applies only to distance learning that is part of scheduled classes. Works that are simply posted by an instructor would not be protected. The educational institution must meet certain additional conditions. It must provide information to faculty, students, and relevant staff members describing United States copyright law and promoting compliance. For digital transmissions, the institution must take reasonable steps to prevent unauthorized retention or further distribution of copies of the work. This includes not interfering with any technological means the copyright owner may have used to prevent copying.
Paragraph (3) creates an exemption for performance of nondramatic literary works, musical works, or dramatico-musical works of a religious nature, or display of a work, as part of religious services at a place of worship or religious assembly.
Section 110(4) creates an exemption for non-profit groups for performance of a nondramatic literary or musical work (but not a play or an opera), so long as four conditions are met: 1) the work may be performed but may not be transmitted to the public, 2) none of the performers, organizers, or promoters are paid, 3) there is no direct or indirect commercial advantage, and, 4) there is no admission charge, or, after deducting for reasonable expenses the proceeds are used exclusively for educational, religious, or charitable purposes. The last condition may not be met if the copyright owner has objected by serving written notice to the performing organization which conforms to requirements outlined in the statute.
Paragraph (5) is the “small business exemption” which allows bars, cafes, and restaurants to play the radio or show television programming as “background” in their business. It does not authorize playing recorded music, for instance using a CD player, nor does it permit live musical performances. The exemption covers reception of a public transmission on a single receiving apparatus of a kind commonly used in the home, so long as no direct charge is made and the performance is not further transmitted to the public. Very specific limitations are outlined in the statute, such as number of loudspeakers permitted and square footage of the establishment.
A governmental body, or a nonprofit agricultural or horticultural organization may perform nondramatic musical works in the course of an annual agricultural or horticultural fair without obtaining a performance license.
A public vending establishment may perform nondramatic musical works to promote the sale of copies of the work, so long as there is no admission charge. The performance may not be transmitted beyond the immediate area where the sale occurs.
A nondramatic literary work may be performed or transmitted to blind persons or other handicapped persons who are unable to read normal printed material, or to deaf or other handicapped persons who are unable to hear the aural signals accompanying a transmission of visual signals, if the performance is made without any purpose of direct or indirect commercial advantage and the transmission is made through the facilities of a governmental body, a non-commercial educational broadcast station, a “subcarrier” of an FM broadcast station, or a cable system.
A single performance of a dramatic literary work may be transmitted specifically for the blind or other handicapped persons, if the work was published at least 10 years before the date of the performance, there is no direct or indirect commercial advantage, and the transmission is made through an FM radio subcarrier as defined in paragraph (8).
The performance of a nondramatic literary or musical work in the course of a social function organized and promoted by a nonprofit veterans’ organization, or a nonprofit fraternal organization, is exempt. Social functions of college or university sororities or fraternities are not included under this exemption unless the social function is held solely to raise funds for a specific charitable purpose.
Paragraph 11 permits muting or skipping limited portions of the audio or video portions of a motion picture which is transmitted to a household for private viewing. Creating or providing a computer program which facilitates muting or skipping is also permitted, provided no alteration is made in the content, and provided no fixed copy of the altered version is created.
"Happy Birthday to You"
The song "Happy Birthday to You" is the best known song in the world and generates over $2 million in royalties each year for its copyright owners. The original author of the words to the song is unknown; however, the current owner is Warner/Chappell Music, who receives licensing revenues through the ASCAP. The music itself was written in 1893, and due to multiple copyright extensions, will remain so until at least 2030. In 1989, when Time Warner first purchased the piece, movie licenses for the song were going from anywhere between “a few thousand” to $50,000. One reason the owner, Birchtree Ltd., decided to sell the copyright ownership was because they did not have a large enough unit dedicated to monitor its usage in new media. This became key in maximizing financial benefit, because previous owners failed to go after those who used the song without license for over 20 years.
- Music law
- Creative Commons
- Section 115 Reform Act of 2006
- Music Publishers' Association
- American Society of Composers, Authors and Publishers
- Broadcast Music Incorporated
- Production music
- Kohn on music licensing - Al Kohn, Bob Kohn - Google Books. Books.google.com. 2002-01-15. Retrieved 2012-01-27.
- http://www.acemla.com/ Retrieved 2014-12-30
- Brain, Marshall (2003-08-22). "HowStuffWorks "How Music Licensing Works"". Entertainment.howstuffworks.com. Retrieved 2012-01-27.
- For a discussion of the history of the origin and practices of ASCAP, see Jeff Lunden, Collecting Money for Songwriters, A 100-Year Tug of War, NPR (Feb. 13, 2014); http://www.npr.org/2014/02/13/275920416/collecting-money-for-songwriters-a-100-year-tug-of-war; Retrieved Jan. 5, 2015. A less flattering view of the practices of such organizations can be found in Harvey Reid, ASCAP & BMI – Protectors of Artists or Shadowy Thieves? http://www.woodpecker.com/writing/essays/royalty-politics.html; Retrieved Jan. 5, 2015.
- 17 U.S.C. §102(a)
- 17 U.S.C. § 411(a)
- - The "What's The Hold-up?" FAQ, TVShowsOnDVD.com
- Dark Skies - Sony Shelves Dark Skies DVDs Due to Music Costs, Producer Says, TVShowsOnDVD.com
- Dark Skies - Press Release Includes Final Details, Bonus Material for 'The Declassified Complete Series', TVShowsOnDVD.com
- ASCAP has over 40 arrangements of Beethoven's Moonlight Sonata under license, and nearly 80 versions of Row, Row, Row Your Boat. Harvey Reid, op. cit.
- http://www.law.cornell.edu/uscode/text/17/110 and http://www.copyright.gov/title17/92chap1.html#110
- 17 U.S.C. § 107
- But see Bridgeport Music, Inc. v. UMG Recordings, Inc., 585 F.3d 267 (6th Cir. 2009), where the court rejected the “fair use” argument that the use of music sampling was an “homage” to the original recording.
- Gary Rinkerman, Sampling Unleashed? Migrating Visual Art Fair Use Principles Into the Music Space. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2540345. Accessed Jan. 6, 2015.
- 17 U.S.C. § 110; available at http://www.law.cornell.edu/uscode/text/17/110
- 17 U.S.C. § 110(1)
- 17 U.S.C.§ 110(2)
- 17 U.S.C. 110 § 110(3)
- 17 U.S.C. § 110(4)((B)(i through iii)
- 17 U.S.C. § 110(5); Todd B. Tatelman, Copyright Law’s ‘Small Business Exception”: Public Performance Exemptions for Certain Establishments. CRS Report RS21107, http://www.law.umaryland.edu/marshall/crsreports/crsdocuments/rs21107.pdf, updated December 10, 2003.
- 17 U.S.C. § 110(6)
- 17 U.S.C. § 110(7)
- 17 U.S.C. § 110(8)
- 17 U.S.C. §110(9)
- 17 U.S.C. § 110(10)
- 17 U.S.C. § 110(11)
- "Copyright and the World's Most Popular Song by Robert Brauneis :: SSRN". Papers.ssrn.com. doi:10.2139/ssrn.1111624. Retrieved 2012-01-27.
- "Happy Birthday Copyright". snopes.com. Retrieved 2012-01-27.