How Music Licensing, Copyrights, Publishing Work Together

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Music Licensing is a topic that all music creators should have a working understanding of. So here is the guide you will not find anywhere else.

If you watched Hulu’s recent re-imagining of “Four Weddings and a Funeral” you might have wondered how Nina Nesbitt’s cover of The Darkness’ 2004 hit “I Believe in a Thing Called Love” ended up in the show, and, perhaps more pointedly, who got paid for it. The answer to these questions—much like the answer to nearly every question about every piece of recorded music you hear on the TV, radio, and the internet, during sporting events and theatrical performances, and in everything from restaurants to video games—is music licensing. But, before the music can be licensed out, there are two preceding processes that have to be completed; music copyrighting and music publishing. So, let’s talk about these processes.

What are Copyrights, Publishing, and Licenses?

Copyrights are a big part of the entertainment industry and it is the first step to licensing music. They protect the interests of the copyright holder—which often means the songwriters and composers—allowing them to maximize the revenue from their own creative work.

Essentially, there are six rights that copyright holders have under U.S copyright law, which is largely consistent with copyright law around the world. These include the rights:

  1. to reproduce the copyrighted work in copies or phonorecords;
  2. to prepare derivative works based upon the copyrighted work;
  3. to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
  4. in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;
  5. in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and,
  6. in the case of sound recordings, to perform the copyrighted work publicly by means of digital audio transmission.

The term “publishing” originates from an era when music was literally published in paper form as sheet music, but now encompasses all aspects of the management of copyrights and licensing with access to over 900,000 potential revenue sources worldwide. Publishers have exclusive copyrights and control the licensing. 

Licensing is important because it allows the copyright holder (the licensor) to sell some of these rights to a licensee in exchange for payment, usually in the form of royalties. Royalties are a major revenue stream for artists, and therefore a working understanding of licensing can allow you to control the use of your music by other people and to profit off it. 

Having a working understanding of how copyrights, publishing and licensing work are crucial for music creators, especially songwriters and musicians to earn revenue off their own music as well as protect themselves from losing their time, money, sanity and reputation due to the improper use of copyrighted music.

When is Licensing Necessary?

If a particular piece of music is copyrighted then licensing is necessary every time someone plays the song, or some portion or version of the song, in a YouTube video, or on the radio, or in a TV commercial, or at a restaurant or bar, or in a sample used in a different song, or even when it’s played through Spotify or bought and sold through iTunes or Amazon. 

Licensing covers pretty much every use of music which serves to underscore its importance and why knowledge of licensing is paramount to successfully navigating the music industry. Being a publisher and/or owning the copyrights to a piece of music allows you to collect on revenue for any of the myriad uses of music that occur in the modern world, using someone’s music for those purposes requires you to acquire the right license.

What Actually Gets Copyrighted (and Licensed)?

In the simplest terms, the two parts of a song that can get copyrighted are the sound recording (known as the masters) and the composition

The sound recording, of course, refers to the actual physical (or digital, as the case may be) recording of a song or piece of music, while the composition refers to the underlying music such as lyrics, sheet music, melody and so on.

Let’s return for a moment to the afore-mentioned use of “I Believe in a Thing Called Love” in Four Weddings and a Funeral. If the show’s producers had used The Darkness’ version of the song, they would have had to get a license for the original recording or “master”. However, since it’s likely that Nina Nesbitt recorded her version of the song specifically for the show, the producers probably acquired licenses for the underlying composition thereby allowing Nesbitt to record the version of the song—a new master recording—that used on the show. In both of these instances, the owner of the copyrights to the song and the publisher gets paid for the use of the song through these licenses, but the terms of those licenses differ depending on what license was used.

As mentioned earlier, publishers have exclusive copyrights and control the licensing and access to many potential revenue streams. Therefore it is important for creators to be careful with their agreements, with co-songwriters and performers as well as with record labels and music publishing companies, such as Universal Music Publishing Group, Sony/ATV, BMI, and so on, so that they are maximizing their own earning potential and protecting their rights and revenue streams.

How is Music Copyrighted?

All original music is protected by copyright once it is recorded, written down or otherwise “fixed” in a tangible format. Even if you haven’t officially registered the copyright to your music it doesn’t mean that anyone can reproduce or use it without your permission. Automatic copyright protection begins the moment the copyrightable material is fixed. Therefore, your song is protected the moment you finish recording it in a studio, or even if you write down the lyrics on a sheet of paper, or record yourself performing the song with your cell phone.

However, copyrighting and licensing your music in an official manner will smoothen the process of you getting royalties and fees for the use of your music. In particular, registration of your copyright will make it easier for you to prove your copyright ownership if a legal dispute arises and, importantly, if you have to claim damages and fees in the event that you have to sue for copyright infringement.

Registration of your copyright is a fairly simple process involving creating an account with your country’s copyright office, filling out a copyright registration application, paying the registration fee—$35 in the US—submitting a copy of your song, and waiting a few months for the registration to be processed.

How do Publishing and PROs Work?

Performance Rights Organizations (PROs) handle much of the grunt work in relation to the collection and distribution of royalties and certain types of licenses—performance licenses in particular, which we’ll get to a little later—due to the inherent complexity of licensing agreements. It would be far too time-consuming and difficult for, for instance, every radio station to individually apply to every copyright holder in order to play their music on the air.

Organizations such as the American Society of Composers, Authors and Publishers (ASCAP), and Broadcast Music, Inc. (BMI), and others, issue certain types of licenses to users such as television and radio stations and networks, podcasts, ringtone services, satellite audio services, hotels, bars and restaurants, symphony orchestra, and digital jukeboxes, track and collect royalties of fees, and distribute them to the copyright holders. Additionally, since most professional songwriters and music publishers are registered with a PRO, it also makes PRO’s an important resource for tracking down the legal licensor for a piece of music and applying to them for a license if the PRO itself cannot offer the license in question.

In order to start getting performance royalties from performance licenses you have to become a member of a PRO—which, depending on the particular organization—may have a joining fee, which will both make it easier for you to get royalties for your songs getting played on the radio or TV or anywhere else that music gets played. Once you sign up with a PRO, you will be assigned an Interest Parties Identification (IPI) number, which is an important number for you to keep on record.

Once a song is recorded, it is also extremely important to fill out a Split Sheet, templates for which can be easily found online. Split Sheets document the contribution of every relevant party to a particular song in order to ascertain how much of the publishing royalties each party is entitled to from a performance license. Once all the parties agree to the division of royalties, the split sheet is filled out with all the relevant information about the recording, the percentages that each party is entitled to, and identifying information about each party, including their names and IPI numbers, and signed. The information is then uploaded by each contributor to their PRO accounts.

Split Sheet: Publisher and songwriter information for the royalty splits from licensing
Split Sheet: The songwriter and publisher information for Wild Thoughts by DJ Khaled

How Does Music Licensing Work?

There are several major types of music licenses available, depending on the intended use of a piece of music. For instance:

  1. Synchronization License: The synchronization or “sync” license allows the licensee to use a song and synchronize it to a visual media, such as in a movie scene or in a YouTube video and also allows the licensee to modify or re-record the song for their purpose. This is one of the most common types of licenses.
  2. Master Recording License: This gives the licensee the right to use a particular recording of a song or musical piece and it is often combined with a sync license.
  3. Performance License: This allows the licensee to use music at live performances or to publicly broadcast performances, such as on the radio or jukeboxes, and is also a very common type of license.
  4. Mechanical License: A mechanical license allows the physical reproduction of an artist’s works, primarily in the form of CDs or the distribution of the music. Mechanical licenses also allow the licensee to record and distribute cover songs, even if they’re only using a portion of the original song or are changing the lyrics, remixing the song or otherwise altering anything about the original recording.
  5. Print License: This license allows the licensee to reproduce the sheet music of a copyrighted work. This also extends to guitar tabs, even the ones that a person may have figured out by ear.
  6. Theatrical License: This is a very specific type of license that applies to music that is used in theatrical productions in front of an audience.

In most cases, such as the use of copyrighted works in visual media, the licenses must be negotiated with the copyright holders, which might mean the owner of both the master recording as well as the publisher in cases where they aren’t the same entity. Licensing agreements are also generally bound by clauses relating to the Term (i.e. how long the licensee may use the licensed work), Territory (i.e. where the licensed work may be reproduced), and Media (i.e. in what form the licensed work may be reproduced), and Exclusivity (i.e. whether a license can be issued to another licensor during the term of the current license). As with all legal contracts, most parts of licensing agreements are subject to negotiation.

To once again use the example of “I Believe in a Thing Called Love”, it is likely that the producers of “Four Weddings…” had to acquire mechanical and sync licenses in order to allow Nesbitt to record her cover of the song and for the song to be used in the show. If the producers had used the original Darkness version of the song they likely would have needed master and sync licenses. If her version now gets played in a different TV show then the producers will now need to acquire licenses for both the Darkness’ composition as well as the license to use Nesbitt’s master recording. Royalties on this future use would thus flow to, depending on the terms of the various agreements to the owners of Nesbitt’s master recording, to the publishers of the original song, and to the performer—Nesbitt herself.

It’s important to remember that royalties are generated from several different sources. The writer or publisher of a song can earn revenue from different sources depending on the license being used, and therefore it pays to know what you, as a songwriter, composer or lyricist, are entitled to. 

Understanding the terms of agreements are important to earning royalties from publishing and licensing
Understanding the terms of agreements are important to earning royalties from publishing and licensing

What Are Music Publishing Administrators and Co-Publishing Deals?

The final piece of the copyright/publishing/ licensing puzzle is often music publishing administrators. Creators sometimes use music publishing administrators to handle copyright registration, licensing and collection of royalties. While this may sound a lot like what publishers do, the crucial difference is that the publishing administrators do not own the copyrights but act on behalf of the actual publisher—in the case of independent artists — for a commission. 

Such deals are called administrative deals and music publishing administrators such as CD Baby, and Tunecore are of particular importance to independent artists since they handle a lot of the functions that a publishing company would normally do. In such instances, the publishers, i.e. the songwriters and composers, do not have to relinquish 50% of the ownership of the copyright, and consequently 50% of the publishing royalties as they would with a traditional publishing company. It is also important to note that administrative deals are generally not perpetual and can be terminated.

Conversely, creators that work with publishing companies generally have co-publishing deals. In such instances, the publishing company gains a 50% ownership and publishing revenues for life. In return, the company offers monetary advances to the creator that goes towards recording and other costs. Essentially this arrangement functions like a loan, where the publishing company recoups that loan before any profit is distributed to the songwriters. The benefit of this latter arrangement is that publishing companies also work actively towards pitching songs and ideas to, and working out licenses with, music supervisors for TV, film, ads and video games et cetera., which improves the likelihood of royalties for all concerned parties.

It is important to note that co-ownership rights are tied to the particular work that falls under a co-publishing deal forever. That is to say, although a songwriter can terminate a co-publishing deal, the co-ownership rights that have already been assigned cannot be reversed and will exist forever. For that reason, it is imperative to get legal counsel and representation before signing such a deal, because there’s always the risk of the creator signing away too many of their rights if they’re not already seasoned and savvy professionals. 

Conclusion

This article is of course merely a primer to the world of music business vis-a-vis copyrights, publishing and licensing. Its purpose is to provide an introduction to some of the key concepts and important players in the music business ecosystem. Licensing is the major source of revenue for music creators and therefore understanding how licensing works is essential to making a successful career out of music creation. After all, if the producers of a TV show want to use your song in an episode and want to license the master recording, composition, or lyrics and melody from you, it pays to know how to let them find you, give you the requisite credit, and how to collect your royalties.

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