In sharp contrast to the rampant corruption prevalent during the formative years of the music industry, regulations and standards are now the norm. Music licensing agreements offer composers, writers, and publishers a tightly controlled system of ownership and pre-set payment for the use, performance, or duplication of copyrighted music. These agreements also define how and when payment must be made, as well as any limit on usage.
Music licensing is a complex topic and can encompass a variety of issues. Before entering into a music license agreement, either as a writer, composer, or publisher, you should consider consulting an entertainment lawyer knowledgeable in the subject.
In the early days of the music business, music licensing was a topic yet to be addressed. Many early blues and pop songwriters gave up rights to their songs without understanding the implications, thus forfeiting future royalty payments for their work. In some instances, songwriters sold their rights for a few dollars or had them stolen by corrupt record companies, publishers, agents, or managers.
Although one of the most common types of music licensing in use, performance rights licensing is also one of the most misunderstood topics for music business newcomers. Performance rights are collected by a Performance Rights Organization (aka P.R.O.) and distributed to the owners of these rights, based on a system of percentages. ASCAP, BMI, and SESAC administer the majority of music performance rights payments in the U.S. while SOCAN is the primary P.R.O. in Canada.
Mechanical Rights Licensing
Mechanical rights licensing addresses the topic of who controls the right to record, manufacture, and distribute a copyrighted work. The amount of money due to the copyright owner is usually determined by the number of recordings to be produced. Mechanical rights licensing is often confused with Master Recording Rights, which controls previously recorded music.
Synchronization Rights Licensing
Synchronization Rights Licensing, also known as "Sync," is required when a copyrighted work is used in a television show, movie, commercial, music video, or other recorded medium. If a specific recording of the copyrighted work is used, a Master Rights License must also be obtained prior to use.
The copyright owner of a recorded work can utilize music licensing to generate multiple streams of income from the use, reproduction, and performance of a work. These opportunities can be reproduced and replicated numerous times during the life of the recorded work.