Copyright and Music Licensing
Have you ever wondered whether the music that a cafe plays for its customers requires a license? The answer is yes. Such actions require a Music License. A music license is a right granted by the copyright holder or his/her agent for the broadcast, recreation, or performance of a copyrighted work. A music license ensures that the owners of copyright on musical works are compensated for certain kinds of uses of their work.
The foremost step in understanding music licensing lies in knowing the difference between a ‘song’ and a ‘sound recording.’ A recorded song has two separate copyright – one in the song, which consists of a melody and accompanying lyrics, which is owned by the composer, and second in the sound recording, which is the recorded rendition of the song, owned by the record label. Typically, but not always, there will be separate owners for the song and the sound recording.
Types of Music Licenses
Copyrighted music designates legal ownership of a musical composition or sound recording. This ownership includes the exclusive rights to redistribute and reproduce the work, prepare derivate works based on the copyrighted work, perform the work publicly, as well as the licensing rights that enable the copyright holders to earn royalties. Different types of music licenses can be obtained for various purposes, which are as follows:
- Synchronization License (Sync License) – This type of license refers to the music that is going to be coupled with some form of visual media. It has a wide range of uses, including advertisements, cinematograph films, internal communications, and more.
- Mechanical License – A mechanical license is required for any physical reproduction of a musician’s work. Mainly, this refers to the making of CDs or the distribution of music in any physical form. Artists enter into agreements with record labels, distributors, and publishers on the mechanical terms of their music and are paid for each copy generally. A mechanical license is also needed for recording a cover version (downloadable or distributed physically) even if only a portion of the original song is used.
- Master License – Master licenses are similar to sync licenses but not as broad. The master right is held by the person who owns the recording of a song. The master license allows the user permission to use a pre-recorded version of a song in a visual or audio means but does not allow a user to re-record the song (i.e., cover version). Usually, a master license is dispensed in combination with a sync license.
- Public Performance License – ‘Performance’ under copyright generally applies to any broadcast of an artist’s work, which includes entities that play music in their stores, cafes, jukeboxes, concerts, or any other form of public performance. Normally, performing rights organizations manage performance licenses and issue music royalties to artists on a per-use basis.
- Print Rights License – This license refers to the physical copy of the sheet music that an artist creates. It is required when someone prints a sheet music compilation or any time the sheet music of copyrighted work is reproduced.
- Theatrical License – A theatrical license is required any time a copyrighted work is performed on stage in front of an audience.
Online Licensing: The Modern Music Licensing Way
Copyright holders in the music industry have witnessed challenges in acclimatizing to the speed of technological developments that recurrently offer the consumers many novel ways of listening to music. In the past twenty years, the way consumers buy and relish music has changed intensely with the help of the internet, Amazon, iTunes, digital music streaming services, and smartphones. The present music licensing system, by which copyright holders are paid for the use of their music, has struggled to adjust to new music delivery methods with amendments and changes still underway to keep up with the digitization of music fully.
Traditionally, creators and producers who recorded their work would own a copyright in the works. After this, record labels would promote and enable the customers to buy the music physically at stores. Music distributors would enter into music license agreements with stores. However, with the growth of the internet, everything shifted online. Online music stores and streaming services came into existence. Today, composers can give selective or absolute rights to third parties such as YouTube, Spotify, Amazon Music, and so on. Music licensing can also be done online with ease. An online portal named PLUS (Performance License of Usage of Sound Recording) has been established by Phonographic Performance Limited (PPL).
All those who play pre-recorded music of the members of PPL, for any non-private purposes or public performance or commercial purpose, whether by way of CDs, radio, music cassettes, cable network, TV, internet, etc. must obtain a license and provide the payments for the same. PPL provides an Annual Background License (if one plays the sound recording daily) and Event License (if one plays the sound recording for a particular event on a specified day). To obtain a license, the person has to apply for the music performance license and contact the nearby facilitation center, providing all the relevant information needed. Consequently, a quotation is shared with a payment link. Once a person obtains the music license digitally, he or she can easily play the music in every form or method.
In India, we have Phonographic Performance Limited (PPL), which handles the copyright of sound recordings, and the Indian Performing Rights Society (IPRS) that handles the rights for lyricists and composers. So, if one wants to play a recording of a song in a restaurant, bar, hotel, or any commercial establishment or public place or for non-private use, he or she would need a license from PPL. Playing music without a proper license constitutes a public performance of the work, which is a right of the copyright owner, and amounts to Copyright Infringement.
Essentials of a Music Licensing Agreement
Owners of copyright in musical works enter into music licensing agreement with record labels, which release the work to the public. A music license agreement protects the rights of both parties and puts special weight on preventing unauthorized use of the musical work, which affects the commercial interests of the parties. A licensing agreement helps the artists commercialize their work effectively. Some of the essential clauses that are needed in a music licensing agreement are:
- Rights and Obligations – This clause sets out the rights and duties of the parties concerning the license. The licensor should state a clause to reserve all the rights other than the ones licensed. He/she can also set out a clause to have his or her name stated as the owner in all promotional activities of the music.
- Scope and Extent of the License – The licensor should expressly stipulate whether the license is a non-exclusive license or an exclusive license. The licensor can also decide the geographical limit within which the license will be effective. The platforms on which the work will be available such as the internet, radio, or CDs, have to be mentioned as well.
- Royalties and Payments – The musician or the licensor is paid a certain amount of money in exchange for the license granted to the licensee. These payments are either made on a lump sum basis or as royalties on each broadcast. The time limit within which the payment is to be done must also be stated along with the conditions regarding interest on late payments.
- Term and Termination – The term stipulates the date from which the agreement comes into force. The period for which the agreement shall remain in force should be mentioned under this clause. If there is any clause for automatic renewal, it should be mentioned. The conditions for termination and the notice period for avoiding the automatic renewal of the agreement should be stated without fail.
- Indemnification Clause – The copyright owner shall indemnify the licensee from all the damages and third-party claims concerning a breach committed by the owner of the copyright. Correspondingly, the indemnification clause also indemnifies the licensor from all damages and expenses caused because of the use of the musical work by the licensee.
- Representation and Warranty – The licensor of a music license agreement should make certain warranties in the agreement. The publisher or the owner of the musical work shall be required to make a representation to the licensee that he or she is a member of a registered copyright society. Similarly, he or she will also be directed to make a representation that the musical work is new and original such that it does not violate the Intellectual Property Rights (IPRs) of any third party. The licensor shall also confirm that he owns all the exclusive rights related to the musical work.
As soon as a musical work is created, the next step is to showcase the same to the public. The role of a music licensing agreement is indispensable in meeting this end. With the change in digital technology and the popularization of online listening of music, any kind of copyrighted music is prone to rampant infringement. Licensing organizations such as PPL have helped in digitization and easy access to licensing. With the transition to digital licensing, revenues have increased considerably for the music licensing industry than what they used to be a few years ago. Looking at this scenario, it is also critical to ensure that the owners of copyrighted musical works are compensated fairly for the use of their work. Before using any musical work, one should be aware of the kind of license required to avoid infringing the rights of the copyright owners. Consequently, entering into detailed and drafted music licenses is required to not only avoid the infringement of the owner’s rights but also ensure that the licensee has obtained the requisite rights needed for the use of the music. ✅ For more visit: https://www.kashishipr.com/