Music Publishing & Licensing 101

Here's a music publishing and licensing primer for those of you who may not know how the business end of your creative process works.

What is a Master? A master recording is the actual physical sound recording, whether it's burned to disc or exists as a digital file.

What is a Composition? The composition is the actual words and lyrics that are sung/played by the performers.

What is a Copyright? This is an intellectual property that exists in 2 forms: one is the sound recording which is owned by the person who paid for the recording, and the other is the composition, which is owned by the person who wrote the song or published the song.

What is a Publisher? In the traditional sense, it was a person or company who published (made available to the public) the sheet music for the composition. Today, it's a person or company that owns or controls the composition 100%, promotes, exploits and collects the worldwide revenue from various streams such as radio airplay, audio recording duplication, film/tv licensing, etc. The publisher usually will pay the writer to gain ownership of those rights, or if the writer doesn't have a publisher, he/she also doubles as the publisher. Generally, publishing agreements are exclusive.

What is an Administrator? An administrator is a publisher, who gains 100% control of the composition while allowing the writer to retain ownership of the compositional copyright. The administrator's main service to the writer is to collect, for a small percentage (10%-25%) the revenue generated by the use of the composition. In some cases, the Administrator will promote and exploit the composition as well. Generally, Administrative agreements are exclusive.

What is an Exclusive agreement? This is a deal made by the content owner and another party giving that party only (and no others), the right to exploit the content on the owner's behalf. In most cases, the owner can not exploit the content either. Fees may be paid by the party to the owner to gain the exclusive right. Exclusive agreements can not exist with other agreements (regardless of non-exclusivity or exclusivity).

What is a Non-Exclusive agreement? This is a deal made by the content owner and another party giving that party the right to exploit the content on the owner's behalf, while allowing the content owner to employ other third parties to do the same. The owner can exploit the content as well. Multiple Non-Exclusive agreements can exist.

What is a Sample? A sample is a small section of an audio recording, owned by someone else and embodying another's composition, which is used/integrated into a new recording.

What kind of Samples can I use? For sale samples made specifically to create new recordings, and bought by the user, with rights to use the sample in any manner they wish; and exploit the final recordings for revenue.

What kind of Samples can I NOT use? Samples taken from another recording without the permission of the creator i.e. from your cd collection. Even if permission and payment is made to the content owner, usually the rights given to the User is very specific and limited. The sample can not be exploited outside of the rights paid for. A common right is to use the sample in the new audio recording for sale to the consumer for personal use. This right does NOT allow the user to license the final audio recording to a TV show for use as background music. The production would have to clear and pay for the sample with the original content creator for the use.

What is Quoting? This is when the composer takes a portion (no matter length), of another composer's composition and incorporates into his or her own composition. This like a Sample, would require clearance from the composition owner/publisher for very specific uses.

What is Public Domain? A very simplified the US a composition is no longer copyright protected 70 years after the death of the composer and becomes, theoretically, the property of the 'public'. This means that anyone can record or perform a composition (and revenue may be earned on the new recording) without having to pay for it. The rules for public domain status are different for each country around the world. A composition that is in public domain in the US may not be public domain in France, as the copyright laws for each country apply to the composition regardless of where the composer was born. If the composer died before 1900, almost 99% of the time the song is public domain worldwide. Identifying public domain status is tricky, and thorough research of each song, death dates, publishing dates, laws of countries where you want to distribute is necessary, and one may want to consult a musicologist to confirm public domain status before creating/selling/licensing a public domain composition.

What is the AFM? It is the musicians union in the US. Like other unions it negotiates pay rates for musicians for a variety of jobs, and offers benefits/services to its members.

What is a Union Recording? When a recording session utilizes AFM or union musicians in the audio recording, pays the musicians based on union rates, and the paperwork is filed with the AFM, this is a union recording.

What is a New Use? This is when a song is used outside of its intended purpose (generally applies to Union Recordings). For example, you record a CD with union musicians, and have filed union paperwork, you have paid the musicians for their time to create and duplicate a certain number of CDs for sale; this is your intended purpose. If you take a song off of that CD and license it to a TV show, you have created a separate use (not what you intended when you hired the musicians), and you have NOT paid the union musicians for this exploitation of their talent, so they must be paid a New Use Fee as well. Depending on the circumstance, either the content creator or licensee will have to pay the New Use Fee.

What is a Re-Use? You record a CD with union musicians, and have filed union paperwork, you have paid the musicians for their time to create and duplicate a certain number of CDs for sale; this is your intended purpose. But you decide to duplicate more recordings beyond what you initially paid for, then you must pay additional fees to the musician, this is a Re-Use fee. This can also occur with advertising music. The music is created and used for a 13 week period and the union musicians have been paid for their work to run 13 weeks. But then the agency wants to run the spot another 13 weeks. In order to do so, someone must pay the union a re-use fee.

What is an Interrupted Use? A continuous use of a song in a scene, but the picture is edited so that another scene with other audio is stuck in between creating two separate scenes, but the song is in both. So if you were to take the 'middle' scene out of the picture, the two scenes with the song, would play as one scene continuously. Interrupted scene uses generally count as 1 use for licensing purposes.

What is Name & Likeness? You have the right to use your name and likeness in promoting yourself. You must give that right to other people in order for them to exploit your music. An example of that is when your song is used in a film credit, and they list your name as the artist. You have to give them the right to list your name.

What is a Moral Waiver? A moral waiver is when you give up the right of approval for the use of a song in a production which may contain content you find morally objectionable i.e. alcohol, or oil industry, etc.

What is a Work-for-Hire? This is when a vocalist/musician/composer is hired and paid for his/her services, but the content created is owned by the person/company who pays the vocalist/musician/composer. Generally, the vocalist/musician/composer has no rights to the content, other than writer performance fees. It is wise to get a work-for-hire agreement signed by each party contributing to the recording if they have no ownership rights and especially if you want to use their name/likeness such as in the artist name. A work-for-hire is only valid if a dollar amount is paid; therefore $0 is not a valid amount to put in the contract even if your friend sang the vocal part for free. You must pay them a small amount of $. Once you have paid them for services rendered, you do not have to pay them a share of your licensing revenue. A work-for-hire agreement will protect you from any future claims by the contributors.

What is a License? This is an agreement that the content owner, known as the Licensor, agrees to let another party, known as the Licensee, exploit the master recording and composition for specific terms and conditions. The fee for the use is also outlined in this agreement.

What is the Master Use Fee? This fee is paid to the owner of the audio recording for the use of it. In film/tv, the master use fee is paid to affix the audio recording to picture. In CD sales, this fee is paid for the use of the master in a cd compilation. An example of this is when a TV show uses a song, then the show creates a soundtrack for sale, the production company will have to license the master again for additional $. They will also have to license the composition again which would be a Mechanical fee paid per unit manufactured. For any audio/video production, you have 2 fees paid (master and synchronization).

What is a Synchronization Fee? This fee is paid to the owner of the composition (composer or publisher), for the use of the composition in audio/visual productions only. For any audio/video production, you have 2 fees paid (master and synchronization).

What is a Mechanicals Fee? This fee is paid to the owner of the composition (composer or publisher) for the use of the composition in an audio recording only. So if someone records a composition for their own CD, with their performers, then they must pay the composers and publishers a fee, per song, per unit manufactured, which is regulated by Congress (current rate is over $0.09 per song per unit manufactured, this is called the 'statutory rate'). The fee is split 50/50 between the writer and the publisher.

What is Harry Fox? This is an organization that a publisher can hire to issue Mechanical licenses and collect the fees for the use of the compositions in audio recordings. Harry Fox takes an administrative fee from the revenue generated for its services. A publisher can also choose to handle the Mechanical licenses themselves.

What is a Cue Sheet? This is a list of tracks that are used in a Production detailing the title of the song, the writers and their splits, the publishers and their splits; and the length of use of the song. Cue sheets are created by the production and supplied to the performing rights organization as well as to the supplier of music, so that performance royalties can be paid to the writers and publishers (see definition below).

What are Performance Royalties? When a song is broadcast on radio, television, live event in a concert hall, or even in a restaurant (in some countries internet and theater performances also count), US performance rights organizations such as ASCAP, BMI and SESAC (each country has its own organization) collect annual fees from the "broadcaster" for the "performance" or use of the compositions, and then distribute the revenue to the writers and publishers (50% of the fee going to each). Each production is required to submit a cue sheet outlining the use of all of the songs to the PRO. The PRO has their own way of calculating the fee owed to the writers and publishers based on the cue sheet, type of venue, length of use, number of uses, ratings, and a variety of other factors. For television, these royalties are paid each time the show broadcasts the song, and are separate from the Master Use and Synchronization. For film, in the US, these royalties are only paid once the film is broadcast on television and are separate from the Master Use and Synchronization. In order to receive these royalties, you must be a member of one of the US PROs as a writer, as a publisher, or as a writer/publisher. If you register yourself as a publisher only, you will not receive writer royalties. If you are a writer, and do not want to setup a publishing entity as well, you must alert the PRO that you want to be assigned copyright control, which means they will forward the publishing revenue to you. If you are a writer, and someone else owns the publishing you will only need a writer registration.

What is Perpetuity? This means forever.

What is a Derivative? This is a new copyright that is created based on another copyright. In the true sense, the musical piece & ballet of Romeo & Juliet by Prokofiev is a derivative of Shakespeare's written work Romeo & Juliet. Both works exist separately as copyrights. In the production library world, a new derivative copyright is created by making a significant edit of the original master recording and composition and giving it a new title. Re-titling a song only, without the edits, does not make a derivative copyright. Derivative copyrights exist on their own and the owner of the original copyright may not own the derivative as well. In most cases, the party creating the Derivative will own the Derivative copyright.