What Is Music Licensing and How Does It Work?

When you hear your favorite song during a movie, television show or commercial, you can be certain that a music license is involved. The same is true when you hear that song over the radio or stream it online. Malls, grocery stores and other retailers also need a license to play the song over their sound systems. The person negotiating all of these licenses may hold a music business graduate degree such as a Master of Music in Music Business and Entertainment Industries (MBEI) degree.

What Exactly Is Music Licensing?

Music licensing involves a music rights-holding party granting permission to another party to use the music. The owner holds the copyright to the music; therefore, he or she has the power to grant or deny others the right to use it. The lyricist and the composer typically own the copyright while the record label usually owns the actual recording.

How Do You Get Permission to Use Music?

The most familiar organizations involved with music licenses are radio stations. It would be a nightmare for a radio station to negotiate permission from each composer and lyricist to use each of the thousands of songs it plays daily. Stations avoid that headache by purchasing an annual blanket license from the large music licensing clearinghouses that handle the public performance rights to millions of songs. The two largest organizations are ASCAP (The American Society of Composers, Authors and Publishers) and BMI (Broadcast Music Incorporated).

What Is Another Way to Legally Play Music?

Music is almost everywhere we go, from the supermarket to the doctor’s waiting room; however, you are unlikely to hear any station identification in these places. That is because the supermarket and your doctor are paying for a special music service that does not play commercials like regular radio stations but, like radio, has already secured the necessary music licenses. The most famous of such music services was Muzak, now known as Mood Media.

What Are Some Types of Music Licenses?

A master recording license grants permission to use the actual recording of a song. This is the type of license involved in the creation of compilation CDs. Suppose, however, that an exercise guru wants to use famous dance music on her new workout video. Because she is using the actual recordings of the songs in a different way than they originally appeared she will need to obtain a synchronization license. She now has the right to sync the music to the video. A mechanical license grants a manufacturer the right to produce a copy of the sound recording. Historically, this has included such products as vinyl records, eight-track tapes, cassette tapes and CDs.

How Expensive Are the Licenses?

The fee for a synchronization license can vary greatly depending on how the song is used and the song’s popularity. A song by a new band that is background music in an ordinary TV show may not be expensive. However, if a company wants to use a classic song by a legendary performer in a new TV commercial to boost sales, it can expect to pay a rather large sum for just one year’s permission.

Music licensing is a complex and engrossing business that is so thoroughly woven into the fabric of our lives that it seems music is available everywhere. But that music is available only because someone secured the necessary licenses brokered by a professional. Those interested in learning more about music licensing and other components of the music business can learn more through a music business degree program.

Learn about the Frost School of Music’s online master’s in music business and entertainment industries program.




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