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 and reproduce the recorded work without a separately arranged agreement.
The following words and phrases appear in discussion of music licensing:
- the right, granted by the copyright holder, for a given person or entity to broadcast, recreate, or perform a recorded copy 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. Most music licensing agreements include some form of compensation of the copyright owner when the work in which it is included (i.e. movie, play) is financially successful.
- the owner of the licensed work
- the person or entity to whom the work is licensed
- for the purposes of this article, the live performance of a musical piece, regardless of whether it's performed by the original artist or in the manner it is best known
- the replaying of pre-recorded works to multiple listeners through various media or in a 'semi-live' setting such as a bar or bookstore, and including radio, TV, webcasting, podcasting, etc. (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, the best-known of whom are ASCAP, BMI, and to a lesser extent SESAC (there are others as well) whose fundamental job it is to keep track of every single performance or broadcast of all works protected under copyright. A more in-depth analysis of how these organizations work will be threaded throughout the body of this article.
- pre-cleared music
- music that has been pre-negotiated for price, distribution and legal use, generally through licensing for film, video, television (commercials and programs), Internet, events, video games and multimedia productions.
- literally, 'the right to copy.' 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. It is not within the scope of this document to examine the various changes, additions, and ancillary agreements to the Berne Convention. Beginning in 1976, copyright protection in the United States has been extended to a work of music immediately after it is created. Legal protection is extended to the work 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 against a party which has allegedly infringed on this original work.
- 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' who actually owns the rights to their work; the reasons for this are matters of legal finery and largely not of value to the scope of this article. This phrasing is reflective of 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 pre-recorded or live music for groups of people other than the licensed purchaser of a given work, beyond what might be normally expected in a social setting. There has been some legal wrangling over the years about what, exactly, constitutes a 'broadcast' for the purpose of license/copyright enforcement. Legal claims are filed frequently against bookstores, bars, and live music venues that broadcast music without paying for it.
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.
Radio stations pay fees for the rights to broadcast music. Fees are paid to licensing bodies such as Broadcast Music Incorporated (BMI) and the American Society of Composers, Authors, and Publishers (ASCAP) and ACEMLA. Radio stations and businesses typically pay a flat rate once a year, called a blanket license, which can vary based on the amount and nature of music usage. BMI and ASCAP determine how to divide up the licensing profits among copyright owners. Radio stations calculate payment to license holders by periodically auditing the music being played. The audit results are submitted to the licensing relevant body for the station's territory. This information is used to calculate the average number of plays each artist has received.
Home video 
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 usually 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, Third Watch 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.
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, 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.
See also 
- 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
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- Brain, Marshall (2003-08-22). "HowStuffWorks "How Music Licensing Works"". Entertainment.howstuffworks.com. Retrieved 2012-01-27.
- - 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
- "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.