As a composer, musician, or music producer, you have several options to generate income through your art. In a world where most of the music is published digitally, traditional revenue streams, like selling physical albums, are no longer sufficient to make a living from your music, even as an established artist. Still, the music industry today is generating millions of dollars every year. So where is the money coming from?
Music licensing is one of the top channels that can help you support yourself and potentially establish a regular income channel from the creative process. As a musician looking for sustainable revenue streams in 2023, you should be considering music licensing as one of your top options.
Licensing is not only about money. It can also help you showcase your music, reach new audiences, and boost your artistic self-esteem while watching a new Netflix series with your track in the background. A major sync licensing deal can be the make-it-or-break-it factor of your music career.
“One of the nice things about licensing music to movies or advertisements is you can reach a lot of people who normally wouldn’t hear music.”
While it all sounds exciting, getting to know all the aspects of music licensing can take time. Today, I will delve into the details of music licensing to help you understand what it is, how you can benefit from it, and what you should be aware of when taking the first steps in this part of the industry.
What is music licensing?
Music licensing means transferring rights to a music composition from the artist, producer, publisher, or record label to a second party for commercial use through a music license agreement. A music license agreement enables the public performance of copyrighted music while simultaneously assuring that the creators of the music are fairly compensated. The agreement describes the length of the agreement, the market where the song will be used, and the nature of its use. The most popular type, a sync licensing agreement, usually allows all kinds of media use except theatrical.
The licensed music can be applied in various commercial media, and most often, these are:
Movies (including movie trailers),
TV series and shows (e.g., Netflix),
Commercial advertisement (TV, radio, or online),
Think about it: every track you ever listened to in a commercial, TV show, or film comes from an artist who is, in one way or another, getting paid for it. The industry is massive, and there is a good chance there is a space for your music in there, too.
Music licensing is often mentioned together with music publishing. However, these are two different aspects of the music business. Music publishing concerns all the activities related to managing, exploiting, and protecting the rights of intellectual property in commercial music. Artists either opt to publish their music themselves or pass this on to a publishing company, which takes care of creating licensing agreements, collecting royalties, and seeking licensing opportunities for the artists they represent. Last year, I wrote a guide to the best music publishing companies, so go ahead and check it out.
Back to music licensing, musicians often decide to publish the music themselves to receive 100% of the income from the syncs or placements they get. However, it can be a laborious and lengthy process to get the deals without the right connections.
On the other hand, publishing companies will have a network of contacts enabling them to sell your music, and this is what you are paying them for. If you opt for the latter, you will have to sign a publishing contract that will specify how the publisher will manage your tracks and what percentage of the money made from the syncs and royalties they get.
Let’s take a couple of steps back and look at different types of music licenses before we break down the whole process. It’s worth noting that every piece of music can exist in multiple forms, such as sheet music, live performances, album tracks, and master recordings, and each of these forms needs to be licensed individually.
As mentioned above, sync licenses are the most popular, especially among indie musicians. The great thing about a sync license is that you usually get all the money upfront, and you don’t need to hang around waiting for the royalties. Jon wrote a few words on sync licensing earlier this year, so if you are interested in his take, be sure to give it a read.
Sync license allows the use of a song in conjunction with a visual media output like TV shows, movies, commercials, and video games. The song gets “synchronized” with the project, which means it can be re-recorded and reproduced along with the selected video. Synchronization license gives rights to the reproduction of the piece in the project and, ultimately, to create a new version of the composition.
The main difference between a sync license and a master license is that the latter allows the license holder to use the pre-existing, original record of the track, including the voice of the artist. If a video producer wants to use a song in their media, they have to purchase both master and sync licenses. When it comes to the ownership of master rights, they are usually held by the record company or by the artist themselves.
Another type of license that allows recording a track for distribution in a physical and digital medium. This kind of license is required, for instance, if an artist wants to record a cover of another artist’s song and monetize it.
Print rights license gives permission to reproduce (print) the scores of a song – lyrics, sheet music, or any other written form of a song. You will need this type of license to put the lyrics of the song on an album’s cover and include it in the subtitles of a video published online.
As you may have guessed, this type of license, also called a public communication license, allows one to reproduce or perform music in public. This includes any form of public broadcasting, like live concerts, radio, and television, but also clubs and restaurants. Public performance rights are generally held by Performing Right Societies, which are also responsible for collecting and distributing performance royalties.
One of the crucial things to understand about music licensing is who owns the copyrights to each part of the track. The term ‘Copyright’ or ‘Author’s Rights’ refers to the legal ownership of the intellectual property of a work. If the word “copyrights” scares you, you might find helpful my article on copyrights in music, which I wrote earlier this year.
As an indie musician who also publishes their music, you own both the master and publishing rights and, in a way, this makes the licensing process easier. If you signed a record deal, depending on your agreement, they might be the owner of the master. Each party involved in making, producing, and publishing a song, including writers and a publisher, must be included in a licensing agreement to be compensated for commercial use of the track.
There are different fees that concern music licensing: master recording sync fee, publishing sync fee, and performance and mechanical royalties. Sync fees are paid upfront by the party purchasing the license, while the performance royalties are generated each time the song is broadcast. Mechanical royalties come from reproducing the song (original version or a cover) in a physical (CDs, cassettes, etc.) or digital format (buying a digital download).
Mechanical and performance fees often get mixed up together. Streaming music online on on-demand platforms requires both licenses, and the applicable fee split may vary by territory. In the US, the mechanical and performing royalties are generally split 50/50 between the songwriter and the publisher.
Under certain circumstances, it’s possible to use copyrighted music without obtaining a license. The concept of “fair use” permits the use of limited portions of copyrighted material for education, information, or reference purposes.
Since it’s not always clear which uses qualify as ‘fair use’ and which ones don’t, I’d recommend you seek legal counsel before using any music content under ‘fair use.’
Performing Rights Organizations and Collective Management Organizations
To ensure that artists and songwriters receive fair compensation for their work, Performing Rights Organizations (PROs) and Collective Management Organizations (CMOs) play a crucial role in licensing public performances by representing music creators and publishers for performance licenses and royalty payments.
Broadcasters opt for blanket licenses with each of the PROs/CMOs instead of licensing each song separately. These licenses authorize the use of all musical compositions in the PROs/CMOs’ repertoire. With blanket licenses, music can be broadcast on radio, TV, and streaming platforms like Spotify and Apple Music without the need for individual song licenses.
As a member of PROs in the US (e.g., AllTrack, ASCAP, BMI, SESAC, Pro Music Rights) or their international equivalents, CMOs (e.g., SABAM, GEMA, PPL), you will get a share of the money collected from the performance of your music.
To stream or download content, the broadcaster needs to obtain licenses for mechanical and performing rights. The applicable split of fees for each territory is set by its respective collecting society.
As a publisher, you can work with multiple PROs and CMOs. However, if you are an author, you are allowed to join only one organization. The process itself is quite straightforward, but you’re generally required to pay a membership fee. After joining, you can upload all your repertoire to the organization’s database and benefit from receiving royalties.
When to register with a PRO or CMO? It’s up to you, but you can consider doing it as soon as you start making music that is publicly available. Each of these organizations might have slightly different rules on how they distribute the royalties and work with artists, so it could be a good idea to familiarize yourself with how they operate before making a decision. It’s worth noting that if you publish the music yourself, you need to register as a writer and a publisher in order to receive both shares of royalties.
Mechanical Rights Organizations (MROs) are independent of PROs and CMOs, and their role is to license mechanical reproduction of the song, as well as collect generated royalties.
Having a close relationship with a music supervisor is any artist’s dream. Music supervisors are crucial players in the sync licensing industry: they can work independently, be part of an agency, or work for a production company.
A music supervisor comes as a liaison between the artist or publisher and the production company using the syncs, and they’re responsible for clearing the track that will be used by the producer. There are certain qualities that need to be met for a song to enter the process: it needs to be in line with a creative brief and synchronize with the mood of the video output, and it has to meet the requested budget. In most cases, a supervisor needs to clear both the master and synchronization licenses.
While many producers would love to include soundtracks from top artists in their films or video games, getting syncs from Rolling Stones or Radiohead might be outside their budget range. This is why the sync industry provides many opportunities for indie artists.
If you’re trying to get into the sync business, I recommend that you listen to Ari Herstad talking to top music supervisors and industry pros on how to pitch your music for sync:
With successful music supervisors receiving hundreds of tracks every day, it’s not easy to get their attention. This is why, as an indie musician, you might want to work with a licensing company or an agent.
Due to the complexity of music licensing, it’s rare for an artist to get into sync on their own, and there are a number of third parties that can help you license your music. If you are working with a major record label, they will most likely have their own licensing department, dealing with licensing requests and also being proactive in sourcing your music to music supervisors.
Platforms such as TAXI or Jingle Punks work with independent musicians pitching their music to record labels, music supervisors, publishers, and licensing companies. Essentially, they act as a bridge between media producers and artists.
Music libraries, such as catalogs of music, where producers can search for sounds that will work with their projects. Some of the most popular music sync libraries include BeatStars and EpidemicSound.
Then, you get independent sync agents, supervision agencies, and consultancy firms you can work with. The ecosystem is vast, so do your research before you decide which path works best for your needs.
The world of music licensing is complex, to say the least, and it requires deep knowledge and understanding of the legal aspects involved.
However, thanks to the licensing system, you not only safeguard your creative work but also open up new sustainable opportunities for generating revenue from your art. Getting to know the legalities can help you understand when and how much you should be paid for your music, resulting in a diversified revenue stream that will make your life as an artist more rewarding and exciting.