Licensing Options in the Music Business
Whether you go the route of an established music publishing company or you start your own, you want to get as many licenses for your music to create profit. Licensing your music means just that — you or the music publisher allow someone to use a product that you own but you don’t transfer the ownership. The deals created from licensing your music, ironically enough, is called publishing.
Public performance royalties
Public performance royalties are tied in to your songs being played in public places such as venues during live concerts or even played by a DJ, on the radio (Internet radio included), television, and public events. With your ownership of the copyright, you have the exclusive rights to perform your song in public. Technically, no one can play your song in public unless you allow it and you get paid for it.
Performing rights organizations like American Society of Composers, Authors and Publishers (ASCAP), Society of European Stage Authors and Composers (SESAC), and Broadcast Music, Incorporated (BMI) track and collect these royalties. These are only three in the United States, and they can help you as the copyright holder track what’s being played, how often and where, and help to get you paid for it.
Mechanical rights and licenses
Mechanical royalties, as they are often called, come from the reproduction of your music — in other words, someone else covering your song. The Harry Fox Agency in the United States is the most recognized organization that helps you or your music publisher in mechanical collections as well as connecting people that want to cover your material with your publisher or you to strike the deal to allow for it. The Harry Fox Agency has released an online mechanical tool called Songfile to help artists connect with copyright owners so they can strike mechanical licensing agreements for covers.
Digital rights and licenses
The digital area is a mess. This is where copyright holders and publishers are supposed to receive money from the plays in digital formats including limited-use or protected downloads and streaming, as well as subscription sites. But Spotify, Pandora, and many other streaming apps and sites aren’t paying, and musicians and labels are waving red flags. Don’t expect much profit here until things get straightened out.
Print rights and licenses
Print rights and licenses cover music that you compose or own the copyright that’s made into sheet music. The sales or the agreed terms of an amount of money for a specific number of prints can be made here. This isn’t a very common revenue stream for an independent artist, because most musicians are finding the music online and perhaps transcribed by others, but with growing recognition, it can become one more avenue of revenue.
Synchronization rights and licenses
Using the more hip lingo — “Sync Licensing” — synchronization is where your music is synched up with images and visuals such as television shows, movies, commercials, and even corporate videos. Payment amounts for this type of use can vary widely.
Some people have seen royalty checks as low as four dollars for music being inserted in to a lower-level cable show, whereas others have been paid $40,000 or more for theme music. These types of deals come through connecting with music supervisors for shows, movies, and ad execs for commercials.
Allowing certain music for free can open doors to different connections as well as music supervisors that can become aware of you. Whether it’s you running your own music publishing company or through a music publisher, don’t get greedy. There are a lot of shows, commercials, movies, and programs that need music.
Sampling rights and licenses
To properly and legally use a sample, you need to go through the person who owns the sound recording as well as the copyright owner. Most larger labels take ownership of the sound recording, so getting clearance through the copyright owner or the person who wrote the song is not enough if you’re thinking of using a sample, or a snippet of your song.
When it comes to profits from samples, the amount varies widely. Some give away samples for free and use the marketing to point back to the original song; others work off a flat fee or a cut of the mechanical royalties.
As far as using other people’s samples, try to avoid it. With 50 percent of your publishing already going to the music publisher, you have to deal with percentages from investors as well as whatever is owed to others involved in your song, so make the most off every song. Don’t use samples. Make the music 100 percent yours, so you don’t have to slice off one more piece of the pie to one more person when money starts to come in.
And don’t steal samples; don’t try to hide them and hope to get away with it. Yes, some musicians rip off samples every day, but those who get caught can be sued for over $100,000 in copyright infringements, not to mention cuts of what product has already been created and sold.
Foreign rights and licenses
Foreign rights and licenses pertain to using your music in another country. Publishers from both yours and the foreign country enter into a sub-publishing agreement to license your music outside of the United States. Whether an artist in another country is covering your song in public, using a sample, or using your music for a movie or TV show, you need to sub-publish with the publisher in that country to make it legal and get paid.
Regardless of starting your own publishing company or signing with a music publishing company, make sure you’re doing your due diligence and clearly understand what’s happening. You’re assigning your copyright of a song or songs to a publisher, usually for an extended amount of time. Find out what they have done and whom they have worked for, then contact those people to find out how they have liked working with them.