Copyright Necessities for Licensing Music
Once your tracks have been recorded, mixed, mastered and sound how you want them to, it’s important to assure that each file has all of the necessary metadata, including track credits, which individuals’ licensing your song will need for their records.
TIP: Having all of the meta-data compiled in a text file will be helpful for including this information in e-mails or other required forms once you begin licensing your tracks.
Performing Rights Organizations (PROs)
Before songs can be licensed, they need to be registered with a Performing Rights Organization. The PRO will help with tracking down and collecting royalties for tracks and performances. If you are not affiliated with a PRO, you will not be paid for the “composition performance royalties” that are earned once your song has been licensed and is being played.
The two largest PROs (the ASCAP and BMI) represent over 90% of the songs that are currently available for licensing in the U.S. and operate on a not-for-profit basis.
In addition to the larger PROs, there are some smaller for-profit PROs (SESAC and GMR) that license performance rights outside of government oversight. While the big not-for-profit organizations are subject to decrees prohibiting them from excluding potential members, the for-profit organizations do not face such restrictions and add new members by invitation only.
So, now you have a general idea about what PROs are available to you in the United States --- but how do you go about choosing one to register with?
On the most basic level, all of these organizations will do exactly the same thing: protect you and your interests and get you paid. In general, it’s wise to do your own research on the PROs available to you, to determine whether one has a stronger presence in the genre or music scene you prefer working in. You should also consider reaching out to each of them by phone or email making them aware of your interest in them and request to meet with a representative or even tour their office; this way you can feel out each organization and see if one seems to fit your needs and desires more than the others.
Licensing Musical Works
There are different entities that the music industry relies on to license and administer rights, in musical works, as part of traditional industry practices and legal restrictions. In the days before digital, it was much more cut and dry because determining the boundaries between rights was more straightforward when radio and record distributors represented different commercial channels with distinct licensing needs. Now, digital providers tend to merge these roles, blurring the lines between traditional licensing categories.
Musical Works versus Sound Recordings
There is often a lot of confusion surrounding the idea that a musical work and a sound recording are two separately copyrightable works.
- A musical work can come in many different forms, including sheet music containing notes and lyrics or the recording of the song.
- A sound recording is simply the fixed sounds that make up the recording.
- A musical work and a sound recording are separately protected and can be separately owned under copyright law.
The owner of a musical work owns the exclusive rights under the Copyright Act, which includes the right to authorize others to make use of the rights to create and distribute copies of the work (ex: sheet music, CDs, digital audio files-- the “mechanical” right), to create derivative works (ex: a new work based on an existing composition), to display the work publicly (ex: posting the song lyrics online) and to perform the work publicly (ex: in a venue or broadcast).
The role of a record company is to finance the production of sound recordings and promote the music, and the artist, in addition to arranging the distribution of the recordings through physical and digital copies. It’s widely known that signing on with a record label is a great way to get your music circulating in hopes of reaching consumers, who might just become loyal fans of your work, your tribe.
There are two classes of record labels:
- “Major” labels --- the top 3: Universal Music Group (UMG), Sony Music Entertainment (SME), and Warner Music Group (WMG)
- “Independent” labels --- not entirely owned by one of the three major record labels, account for ~35% of domestic recording industry revenues
When a record label wants to record a song they do not own the rights to. They ALWAYS have to get a mechanical license from the people that do.
A “mechanical” license is what gives a record label the ability to release songs on a phonorecord. This is any format that contains music from vinyl, to cassette, to digital streams, in exchange for royalties paid to the musician.
Statutory Licensing under section 115
In addition to giving musicians the ability to license their music, U.S. Copyright Law also gives legislators the authority to create license standards that allow outside sources to license music in exchange for royalties paid to the copyright holder(s). This is why they are known as statutory licenses because they were put in place by law or statute rather than the parties involved in the licensing of a work.
Anyone looking to make and distribute any form of reproduction of a musical work would need to obtain a license to do so; this can be done simply by serving a notice of intent (NOI) to the copyright owner no later than 30 days after making any phonorecords and before their distribution. Once an individual has served an NOI, that person must provide statements of account and pay the necessary royalties to the artist on a monthly basis.
The Copyright Royalty Board (CRB) is the administrative entity that is responsible for establishing rates and terms for mechanical rights licenses, which is done every five years complete with inflation calculations for the years to come. The CRB is made up of three judges that are appointed and serve staggered six-year terms; the main role of these individuals is to determine the rate that services pay for statutory licenses to establish a standard going rate.
Voluntary Licenses under section 115
Licenses can also be voluntarily negotiated between a copyright holder and potential user instead of abiding by the rates and terms set by the CRB. Mechanical licensing is still largely accomplished with voluntary licenses issued through a mechanical licensing agency, such as the Harry Fox Agency (HFA), or by the publisher. HFA and other licensing agencies tend to incorporate the main elements of section 115 into their licenses, but those terms may vary to some degree. The above terms for statutory licenses effectively establish the maximum amount a copyright holder can seek under a negotiated mechanical license.