Music Licensing 101 – Guest Blog

Brought to you by Music Dealers @ musicdealers.com

The world of music licensing is all around you. Any music that you hear in a commercial, in a movie, on TV, or in a video game was licensed. Music Licensing is simply renting your music to someone else.  You don’t sell your music.  You still own the copyright to your songs and recordings.  You simply let someone else use it for a fee, based on how they want to use it and where.  Think of it like renting a car; the longer and further you drive the car, the more you pay.  It’s the same with licensing your music to “end users”, like advertising agencies or TV/Film productions.

Musician Benefits

Many music licenses are non-exclusive, which means you can license your song over and over again to many different companies for many different reasons.  Because you own the copyright, you can choose to license your song to as many people and companies who might be interested in it.  It’s the gift that keeps on giving – back to you!

Licensing is becoming an increasingly effective way for independent artists to find a whole new audience. Believe it or not, independent bands/artists can have an advantage over major bands/artists when budgets are factored in. Not all movies, companies, and ad agencies are willing to spend hundreds of thousands of dollars on just one song for their project, when they can get a few equal quality, independent artist songs for the same price that the major artists are asking for one. Licensing a major artist’s music can become a bigger hassle than most music supervisors are willing to deal with.

Licensing your music to advertising agencies, film and TV production companies and video game developers can really help your career (as well as your bank account!).  If people hear your music through advertising or in a video game, they will likely want to hear more of your music which builds your profile and can result in more digital downloads.  Quite often, your music receives full credit so people can see who sang and wrote the song.  Other times, people will simply Google the ad to find out more about the music behind it.

Publishing

It all begins with a song.  As with any successful piece of music, the creation of a melody is the foundation for a lasting copyright.  Music Publishing takes its place in the creation process by generating revenues in the music industry.  Music Publishing is the backbone of the music industry worldwide, and has more income streams than any other area of the music business.  Music Publishers contract with composers and authors to control the copyright of the compositions created by such creative individuals.  It is then the role of the Music Publisher to exploit, market, protect and collect revenues for the songs, and to enhance further activity for the song thereby creating a lasting royalty stream.  The majority of publishing revenues today derive from four sources:

Mechanical royalties
Each time a record is sold, the publisher has the right to collect a payment. In general, the average mechanical royalty across the world is 5% of the retail price of a record-approximately $0.90.

Performance Royalties
Historically, performance income has been generated when a song was performed live on stage or played in a public place. The concept has been expanded to encompass a wide range of uses, including performance of a song that is broadcast on radio or television, in a theatre, in an elevator, on an airplane, on a mobile device or over the Internet.

Synchronization Royalties
A growing source of revenue, synchronization royalties are generated by combining a composition with a visual presentation. This income is derived through song usage on television programs, in advertisements and in films, videos, or computer games.

Downloading Royalties
In Music Publishing, the fastest growing source of revenue is downloading royalties. When a song or performance is digitally transferred from a source on the Internet or through a mobile device (such as a cell phone), a royalty is payable. Because most downloading source programs are administered in Western countries, illegal use of copyrights is strictly monitored.

As technology grows, new income streams will become available to the Music Publisher.

Payments

The amount of money a music license can generate varies greatly on many factors. The main factors are; how the music is being used, where the commercial, TV show, or film is going to be broadcast, and for how long – commonly known as Use, Territory and Term.

With music licenses, there is usually one up front fee paid by the licensee (Ad agency, TV or film production company etc).  This term depends on the Use, Term, and Territory, as well as the licensee’s budget. The fee could be a minimal amount (such as $250) or it could be $1 million (if it’s being used in a commercial all over the world).

However, the money doesn’t stop there.  Each time the ad or TV show/film is aired anywhere in the world, the PRO will collect money from the TV stations, radio stations and cinemas for the music, and pay it back to the songwriter and publisher as royalties. The PRO splits the royalties into two portions; writers share, and publishing share.

All Performance Rights Organizations and most licensing catalogs/libraries pay their members quarterly. You will get only one check from the licensing catalogs/libraries for each license, but the PRO’s checks can keep coming over the span of a few years depending on the Use, Territory and Term.

Facts

• 75% of the music used by the television network NBC comes from independent artists and bands. (Source)

• In Europe, the ring tone originally known as “Crazy Frog” has generated more than £14 million and has spawned a range of merchandise, toys and a video game and is currently the subject of a television series.

This information was re-published from http://www.musiclicensinginfo.com/

Related posts:

Types of Music Licensing

Advertisements

8 comments

  1. silverblade · November 17, 2009

    well detailed.. thanks for a valuable information

  2. Financial Experts · November 18, 2009

    Interesting post. I have stumbled this for my friends. Hope others find it as interesting as I did.

    • DbryJ Music · November 18, 2009

      Thanks for reading, thanks for commenting, and thanks for stumbling this article for your friends 🙂

  3. val · November 18, 2009

    Music lovers can now get free Hindi music downloads and free English music downloads with the launch of free music download site Songgy.net. The site is constantly updated to provide visitors the latest music in both Hindi and English.

  4. Pingback: Types of Music Licensing – Guest Blog « The Hit Music Academy
  5. julianangel · February 23, 2010

    Whoah, I didn’t know NBC was using 75% independent music. That shows a great trend – which hopefully will not be stopped by cheap royalty free music.

    Julian Angel
    http://www.soundsofaction.com – The Loudest Music Library

    • d.BRYJ Music · February 24, 2010

      Hi Julian,

      I think that cheap royalty-free music will always have its place in the market but it doesn’t compare to having a composer create original soundtrack music for a project or licensing songs that are popular with a niche audience.

      Thanks for commenting =)

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s