Recognizable music can be a boon to businesses large and small, from attracting customers to a retail storefront to providing a soundtrack for mobile apps and websites. But navigating the legal complexities of music licensing can be a difficult task: what rights are involved in streaming and downloading, who controls those rights, and how are royalties collected and paid?
Most music consists of two separate copyrights, and both must be licensed in order to broadcast or copy a piece of music.
The first copyright is for the song itself, or the musical work. The musical work is the actual melody, harmonies, arrangement of instruments, and lyrics comprising the song. The musical work generates royalties for the writer and the music publisher.
The second copyright is the sound recording of the work: the actual instruments, voices and other sounds affixed permanently in a physical (or digital) form. The sound recording generates royalties for the record company, the recording artist, non-featured vocalists, musicians, and sometimes producers.
Copyright encompasses several distinct rights, and a different license may be necessary depending on how the music is being used.
The performance right for musical works encompasses both playing a song in a public place and also transmitting a song to the public, which includes internet or wireless transmission. The performance right is set forth by United States Copyright Law and requires music users to pay fees when a user performs a copyrighted musical work. When you transmit a song over the internet via a website or a mobile app, you must first acquire a performance license from one or all of the Performing Rights Organizations (PROs) — ASCAP, BMI, or SESAC. These organizations act as intermediaries between rights holders in musical works and music users by monitoring public performances of music, collecting fees from music users, and distributing royalties back to the members. ASCAP, BMI, and SESAC are three separate organizations and represent different artists, and a music user may be required to obtain a license with all three organizations.
In addition to a performance license for the underlying musical work, a separate license is necessary to digitally transmit a sound recording. These licenses are governed by a statutory scheme and are administered by the PRO SoundExchange.
Let’s sum it up with an example: Pandora, an app/website that streams music to listeners via personalized, user-created stations. In order to transmit digital music, Pandora must compensate the various music rights holders by paying performance royalties to ASCAP, BMI, and SESAC for the underlying music, and by paying digital performance royalties to SoundExchange for the sound recordings.
Note, however, that a license from a PRO does not authorize the reproduction or distribution of either the underlying musical composition or the sound recordings. Allowing users to download a .mp3 file or some other permanent form of a song would require separate authorization from both the owner of the musical composition and the owner of the sound recording. The Harry Fox Agency is the largest mechanical licensing agent for the reproduction and distribution of musical compositions.
Acquiring the proper copyrights for music can be complex and technical. Copyright law is an evolving field affected by legislation, court decisions, and interpretations of copyright acts–not to mention constantly evolving technology.
Fortunately, Saper Law specializes in copyright and technology law. Our attorneys are ready to guide you through the licensing process.
Click here to schedule a consultation.