A master recording license is a document that allows you to use a piece of music copyrighted to someone else. You should obtain a master recording license if you're using music for advertisements and marketing (both in print and online), karaoke, productions (such as movies, television or theater) or printed sheet music or lyrics. Basically, if someone other than yourself is going to hear or read the music, you need a license to use it.
Research the copyright owner. There may be multiple individuals or companies that own the copyrights to the music you want to use. For example, the individual who wrote the song may be different from the artist that sang it, so you would likely need to obtain a master recording license from both. If you have the audio CD for the music you want to use, you can start by looking in the CD insert for the name of the songwriter. You can also search the online database for the United States Copyright Office. (See Resource 1)
Determine how you want to use the music and the nature and scope of the license terms that will fit your needs. For example, if you wish to use the music more than once, then you will need to indicate that in the licensing agreement.
Contact the copyright owner and begin the negotiation process on the terms of the master recording license. Determine what terms you are willing to compromise on beforehand. Be open-minded and understand that it honors most music copyright owners that others desire to use their work, but they still need to protect their rights as well.
Draw up a master recording license based upon the terms you and the copyright holder agreed to. There are several sample licenses available online to guide you in this process. (See Resource 2)
Hire a music clearance and licensing expert to go over the agreement before you finalize anything. In fact, you may want to consider hiring such an expert right from the start to aid you in the full process. Additionally, having an expert on your side may help you to obtain more of what you want out of the contract, since the copyright owner is more likely to trust someone with experience in the industry.