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In the world of music rights and commercial or in-public music use, there are a lot of terms and expressions that may be confusing to non-musicians. In fact, some of these are confusing even to musicians. In this article I will try to explain some of these terms and what they mean.
Copyright Free Music
This is a frequently misused term. There is extremely little “copyright free” music around, if any. As soon as a composer has composed a piece of music, it is automatically copyrighted to him/her, regardless of whether the composer actually takes any practical steps to “copyright” the music. If the composer gives somebody permission to use the music in a project, that doesn’t mean the music is copyright free. Even music that you obtain from free music web sites, from a music library, from a royalty-free music source, etc., none of this means that the music is “copyright free”. You should never assume that a piece of music is “copyright free”, because it almost certainly is not, even if somebody tries to tell you that it is.
Music Library
A Music Library, aka Stock Music Library, is simply a “collection of existing music”. People who are in a hurry to obtain music for a project will often use a Music Library because the music is already composed and immediately available. This term says nothing about what costs are involved with using the music. It may be subject to a one-time license payment, a monthly license payment, a per-sale royalty payment, or a combination of these. All this term means, really, is that the music already exists and will not be composed especially for you.
Royalty-Free Music
Royalty Free music (or Royaltyfree Music) means that you will only pay a one-time fee to use the music, and you will not pay a per-use or a per-sale royalty to the composer and/or publisher.
License Free Music
This is a bad term, because it actually means that the music doesn’t need a License for use. This is never the case, though, so when people say “License Free”, usually what they really mean is “Royalty-Free”.
Buyout Music
Buyout Music (or Buy Out music) is a term that usually describes when a company or person pays the composer, producer and/or publisher a one-off sum of money, and then obtains all rights to that music. A lot of the time, music buyout is misused or misplaced. For example, a company might think that they need a total buyout of the music, but all they really need is a License to use the music for whatever puposes they want, forever. This would serve the exact same purpose, but leave the composer with his basic rights intact. If you are looking to obtain buyout music, most likely you are really looking for Royalty-Free music.
Some web sites or music libraries claim to sell Buyout Music, but what they are really selling is royalty-free music. If what they really sold was Buyout Music, then they would sell the music to you, then delete it from their own harddisk, never use it for any other purpose or sell it to anybody else — they they would sign the copyright of the tracks over to you and retract it from anybody else they have ever given the track to in the past. That is a buyout. So really, what they are selling isn’t buyout music, but royalty-free music, or other forms of non-exclusive music licences.
Podcast Safe Music
Podcasts are audio recordings made available for individual downloads or subscriptions. Some podcasts are pay-to-listen but most podcasts today are free. Podcasts are a great way to download audio recordings made by other people, because you can “subscribe” to them so they are automatically downloaded to your computer or iPod, without you having to download each programme/episode individually. Podcasts can include talk shows, reports, music shows, news bulletins and basically anything that can be delivered as an audio file.
Lately, Video Podcasts are also on the rise – which is the same thing but includes video as well as audio.
Podcast Safe Music means music that you can safely and legally use in your Podcast, without having to worry about being sued by the music copyright holders. Bands and artists may give their music for free to use in Podcasts, just in return for some promotion in the hope of getting some new fans. More often, Podcast Safe Music is found in music libraries such as the Shockwave-Sound.Com stock music library.
YouTube Safe Music
Just like Podcast Safe Music is music that you can legally use in Podcasts, YouTube Safe Music is music that you can safely and legally use in your own videos that you post to youTube (and similar services such as Google Video, Metacafe, etc) for the whole world to see. Again, such legal YouTube music can be obtained by visiting a good Stock Music Library.
Work For Hire
A special arrangement governs music that was composed whilst the composer is an employee and composes music for his/her employer. The exact relationship between the employee and the employer will depend on their individual work contract, but in most cases (and if no particular contract exists) the composer will retain the actual copyright to the music, but the employer will have “free use” of the music without payment.
Moral Rights
Even when a composer has given (or sold) the master rights and publishing rights to a music publisher, he/she will always retain “moral rights” to his/her compositions. This enables the composer stop his/her music being used for particular projects on moral, political or religious grounds. For example, a composer who is strongly against smoking may have the right to reject having his music used in a cigarette commercial, even if all the other rights to the music has been signed away to a publishing company.
Mechanical Rights
In the rather complex world of music rights and copyrights, the various rights that exist in a music recording is often divided into three different classes: Synchronization Rights, Mechanical Rights and Performance Rights.
Mechanical Rights are the rights to produce physical items carrying the music, or a film that contains the music. For example, if you have made a film and you would like to manufacture 1,000 DVD’s with that film. The film includes a few seconds of music. You need to obtain the mechanical rights to that music, before you’re allowed to manufacture the physical DVD’s that contain the film which contains the music.
Synchronization Rights
When you buy a CD in the record store, or you download a piece of music from iTunes, you are really only buying a license to listen to this music in your home, in your car and in your own personal music player. You may not use the music in conjunction with any other media. If you want to put that music to a film or any other visual media, you need the “Synchronization Rights”, or the “Sync License”. The term comes from the word Synchronize, as in, you’re Synchronizing the audio to video. If you want to buy the Sync rights to a piece of music, you need to contact the copyright holder directly, or buy music from a Production Music Library such as this one.
Performance rights
In short, Performance Rights mean the rights to legally perform a piece of music in public, or broadcast it on radio, TV or over the internet. Basically, if you are playing music in such a way that other people can hear it and enjoy it, you need to obtain the Performance Rights to that music. Performance Rights are often administered by Performance Rights Organizations such as ASCAP, BMI, PRS, GEMA and similar.
Performance Rights are normally not obtained per-song. Instead, a music broadcaster such as a TV station or a radio station simply pays an annual license fee to ASCAP, BMI or similar. That annual license gives them the rights to play all the music they want in public, for a whole year.
Likewise, a dental surgery which keeps the radio playing, thus entertaining their customers with music from the radio, also need such a license. Again, they don’t buy this “per song played”, but rather buy an annual license.
When you buy “royalty-free music” from an online music library, you normally do not get the Performance Rights with your purchase. But then, most likely you don’t need it either. You only need the Performance Rights if you are actually going to broadcast the music through a broadcasting company that don’t already have an annual license — which is highly unlikely.
Bespoke Music
This just means custom made music, written especially for the project.
Synchronization royalties (‘synch licenses’) are paid for the use of copyrighted music in audiovisual productions, such as in DVDs, television, movies, commercial, and advertisements. Music used in news tracks are also synch licenses. Synchronization can extend to live media performances, such as plays and live theatre. They become extremely important for new media – the usage of music in the form of mp3, wav, flac files and for usage in webcasts, embedded media in microchips (e.g. karaoke), etc but the legal conventions are yet to be drawn.
A synchronization license is needed for a song to be reproduced onto a television program, film, video, commercial, radio, or even an 800 number phone message. It is called this because you are “synchronizing” the composition, as it is performed on the audio recording, to a film, TV commercial, or spoken voice-over. If a specific recorded version of a composition is used, you must also get permission from the record company in the form of a “master use” license. The synchronization royalty is paid to songwriters and publishers for use of a song used as background music for a movie, TV show, or commercial.
Synchronization royalties are due to the composer/song-writer or her publisher. They are strictly contractual in nature and vary greatly in amount depending on the subjective importance of the music, the mode of production and the media used. The royalty payable is that of mutual acceptance but is conditioned by industry practice.
Fees for song usage range from $500-$15,000, with superstar tracks reaching up to $20,000-$250,000. That amount usually includes master rights for broadcast and most other media rights, with a time frame ranging from three years to perpetuity. An additional home video fee is equal to or greater than those quoted. Synchronization rights are negotiated separately, with master and sync rights usually split 50/50, unless the song is a cover — a situation that favors the publisher ?
The price tag for iconic, well-known tunes can be staggering: Tracks by the Who and the O’Jays, used in the opening credits of CBS’ “CSI: Crime Scene Investigation” and NBC’s “The Apprentice,” respectively, generate six-figure deals annually.
Example sync licenses fee’s from the NBC television:
CELEBRITY APPRENTICE
“For the Love of Money” – O’Jays – ($6000/week)
CHOPPING BLOCK
“Ring of Fire” – Johnny Cash – ($11,000/week)
ER
“Shadows and Regrets” – Yellowcard – ($6000/week)
HEROES
“Together” – Krystal Meyers – ($5000/week)
THE JAY LENO SHOW
“Hold On, I’m Comin’” – Sam & Dave – ($8000/week)
“Life Is a Highway” – Tom Cochrane – ($2000/day – $8000/week)
“Mess Around” - Ray Charles - ($6000/week)
See attached Sync License for: Synchronization Example
Marc Smilow
Thanks for taking a minute to read my Blog and I hope you found it helpful. If you have any questions or comments please feel free to contact me anytime at expert@newindustrytips.com
In the United States, “performance royalties” are paid out mainly by three performance rights societies, BMI, ASCAP and SESAC. (Most foreign countries also have their own societies.) Under the copyright law, a songwriter controls the public performance of that songwriter’s songs. In essence, a songwriter designates either BMI, ASCAP or SESAC as his or her agent for the public performance rights of that songwriter’s songs. A songwriter can only affiliate with one society at a time. BMI, ASCAP or SESAC have arrangements with the parties – such as radio, television, concert venues, restaurants, etc. (essentially any user who performs music publicly) – who want to use the songs in the societies respective catalogs. For a licensing fee, BMI, ASCAP or SESAC will grant to that user what is called a “blanket license”, which means that the user can play any song, by any songwriter or publisher affiliated with that society, any number of times. It must be stressed that fees are collected from the entity or venue user, not from any actual performer.
For years radio airplay was the primary method for marketing almost all genres of music. Although that’s no longer strictly the case, what’s remarkable is that recording artists and record labels have never received any form of payment for this usage — not a single penny! Yes, publishers, songwriters and composers receive compensation via annual fees paid to ASCAP, BMI, and SESAC by radio stations. These fees are then apportioned to publishers based on the number of times songs are played as logged by the stations and monitored by the performing arts societies.
The money earned by a songwriter from the societies (i.e., the performance royalty) is proportionate to the volume of airplay of the songwriter’s songs. Performance royalties are based on extremely complicated formulas. Basically, however, the societies monitor radio and television airplay to determine how often a song is heard and by how many people. The larger the audience and the more times a song is played, the more the income. Since it is impossible to cover all media outlets, BMI, ASCAP or SESAC rely on estimates based upon samples. BMI obtains its samples from radio station logs and television cue sheets (lists of compositions used on television). ASCAP gets its samples from taping radio stations and from television cue sheets. After deducting operating expenses, the societies divide the fees up and pay it to their affiliated writers and publishers. Whereas ASCAP and BMI operate on a not-for-profit basis, SESAC retains some income as profit. While ASCAP and BMI distribute all income from performance royalties to their composer and publisher affiliates (less an administrative fee), SESAC retains an undisclosed amount of performance royalty income. All three societies pay quarterly.
BMI, ASCAP or SESAC represent both songwriters and publishers. It should be noted that even where a songwriter is represented by a third party publisher, that songwriter needs to also join a society because songwriters and publishers are paid separately by the societies. To join ASCAP, a songwriter must have at least one song either published, recorded, or publicly performed. To join BMI is a bit easier. The writer must have a song either published, recorded, or likely to be performed publicly. SESAC is also unique among the US performing rights organizations in that it does not offer open membership – one must be approved to join. As for which organization is best, each songwriter will have to decide that for themselves because it is difficult to say with certainty which society pays more.
ASCAP (American Society of Composers, Authors and Publishers)
BMI (Broadcast Music, Inc)
SESAC
Thanks for taking a minute to read my Blog and I hope you found it helpful. If you have any questions or comments please feel free to contact me anytime at expert@newindustrytips.com
Mechanical Royalties refers to the mechanical license and has its origins in the ‘piano rolls’ on which music was recorded in the early part of the 20th Century. Although its concept is now primarily oriented to royalty income from sale of CDs, its scope is wider and covers any copyrighted audio composition that is rendered mechanically; that is, without human performers:
*tape recordings
*music videos
*ringtones
*MIDI files
*downloaded tracks
*DVDs, VHS, UMDs
*computer games
*musical toys etc.
The United States treatment of mechanical royalties is in sharp contrast to international practice.
In the United States, while the right to use copyrighted music for making records for public distribution (for private use) is an exclusive right of the composer, the Copyright Act provides that once the music is so recorded, anyone else can record the composition/song without a negotiated license but on the payment of the statutory compulsory royalty. Thus, its use by different artists could lead to several separately-owned copyrighted ‘sound recordings’.
The royalty rates in the table comprise of two elements: (i) a minimum rate applies for a duration equivalent to 5 minutes, or less, of a musical composition/song and/or a per-minute rate if the composition exceeds it, whichever is greater.
Compulsory Mechanical Royalty Rates – United States
Period Royalty Rate
01-01-1998 – 12-31-1999 7.10 cents or 1.35 cents/min
01-01-2000 – 12-31-2001 7.55 cents or 1.43 cents/min
01-01-2002 – 12-31-2003 8.00 cents or 1.55 cents/min
01-01-2004 – 12-31-2005 8.50 cents or 1.65 cents/min
01-01-2006 – 12-31-2007 9.10 cents or 1.75 cents/min
In a fair publishing agreement, every 100 units of currency that flows to the publisher gets divided as follows: 50 units go to the songwriter and 50 units to the publisher minus operating and administrative fees and applicable taxes. However, the music writer obtains a further 25 units from the publisher’s share, if the music writer retains a portion of the music publishing rights (as a co-publisher). In effect, the co-publishing agreement is a 50/50 share of royalties in favor of the songwriter if administrative costs of publishing are disregarded. This is near international practice.
When a company (recording label) records the composed music, say, on a CD master, it obtains a distinctly separate copyright to the sound recording, with all the exclusivities that flow to such copyright. The main obligation of the recording label to the songwriter and her publisher is to pay the contracted royalties on the license received.
While the compulsory rates remain unaffected, recording companies, in the US, will, typically, negotiate to pay not more than 75% of the compulsory rate where the songwriter is also the recording artist and will further (in the US) extend that to a maximum of 10 songs, even though the marketed recording may carry more than that number. This ‘reduced rate’ results from the incorporation of a “controlled composition” clause in the licensing contract since the composer as recording artist is seen to control the content of the recording.
Mechanical royalties for music produced outside of the United States are negotiated – there being no compulsory licensing – and royalty payments to the composer and her publisher for recordings are based on the wholesale, retail, or ‘suggested retail value’ of the marketed CDs.
In the US, the Harry Fox Agency, HFA, is the predominant licensor, collector and distributor for mechanical royalties, although there are several small competing organizations. For its operations, it charges about 6% as commission.
Record companies are responsible for paying royalties to those artists who have performed for a recording based on the sale of CDs by retailers.
Thank you for taking the time out of your day. I hope the information I have posted is helpful. If you have any questions or comments please feel free to contact me anytime at expert@newindustrytips.com
Marc Smilow
Contacts you might find useful regarding Mechanical Publishing.
HARRY FOX AGENCY
AMERICA’S MECHANICAL RIGHTS SOCIETY
Coast 2 Coast Mixtapes Blog