The following FAQs and answers provide a comprehensive guide for broadcasters seeking to understand music licensing. The points were originally printed in Smart Licensing.
1. Why does a broadcaster have to secure licenses for “music rights?“
The music that is broadcast every day on radio, television and cable or that is performed in nightclubs and concerts, is subject to federal copyright protection. Pursuant to the U.S. Copyright Act and other related legal doctrines, the owners of copyrighted musical compositions, and the recordings thereof, have the right to control how their musical material is used and the fees that will be paid for that use. This system of law makes it possible for composers, lyricists and recording artists to earn a living from their creations and requires that broadcasters, cable programming services and others desiring to use protected musical material secure proper permission to do so.
The owner of a music copyright controls various rights, and receives income by granting permission to use those rights in exchange for fees or royalties. An agreement granting permission to use the rights in a musical composition is called a “license.“
2. What are the specific rights a broadcaster needs to be concerned about in order to use musical compositions?
The rights most commonly needed by television broadcasters are the right to “perform“ (i.e., broadcast), the right to “synchronize“ (i.e., record/reproduce), and the right to adapt (i.e. change or modify) the musical compositions contained in the programs they broadcast. The performance right refers to a station’s right to broadcast the musical compositions contained in television programming. The synchronization right refers to the right to reproduce, or record, the musical composition in synchronization with visual images. The adaptation right includes the right to change or modify the musical composition (e.g., to change the lyrics).
Over the years, different rules and mechanisms have developed to enable television broadcasters to get a license (i.e., secure permission) and pay for these separate rights.
3. For copyright and licensing purposes, is there a distinction between musical compositions and recordings?
Yes. Copyrighted musical compositions used by a broadcaster may include all of the themes, underscore, background music, production library music and popular songs used in syndicated and locally-produced programming. Additionally, recordings of that music are also protected by copyright law, state anti-piracy statutes and other legal theories. For example, the musical composition “Thriller“ (written by Rod Temperton and published by Almo/Irving Music) and the recording of “Thriller“ (performed by Michael Jackson and owned by SONY Music Entertainment, Inc.), are two separate copyrights. Use of the recording of “Thriller“ may require a license from the owners of the musical composition and the recording, depending upon the circumstances (see questions 13, 15, 16 and 20). In copyright terms, the recorded performance (i.e., record, tape, compact disk) is called a “sound recording,“ and a license to re-record a sound recording is called a “master use “ license. The master use license may also contain provisions requiring the user to pay any fees required pursuant to the record company’s collective bargaining agreements with the performer’s unions.
4. What is the right to perform?
The right to “perform“ a musical composition includes the right to do such things as broadcast, sing, play, recite and/or dance to that composition in public. The broadcasting of a program, whether produced by a station locally, by a network to which the station is affiliated, or by a distributor, constitutes a “performance“ of the music contained in the program. A performance license must be secured from the owners and composers of musical compositions (i.e., the theme, score and popular songs) in order for the program to be broadcast without infringing the owner’s right to perform.
New federal legislation has been enacted that creates a performance right in the digital transmission of sound recordings. However, this legislation provides an exemption for television broadcasters. Therefore, television broadcasters do not need to secure performing rights in order to broadcast recordings of musical compositions.
NOTE TO PER PROGRAM LICENSEES: If a station is paying for performing rights to musical compositions pursuant to the per program license (see question 11 below), the use of a popular recording that contains a musical composition licensed by a society could trigger the payment of a per program fee to the performing rights society that controls the musical composition.
5. From whom does a station secure performing rights licenses for musical compositions?
Composers and music publishers assign the performing rights in their musical compositions to one of three organizations (called performing rights societies), which issue licenses and collect license fees from individual night clubs, restaurants, radio and television stations, and other venues. After deducting the costs of administration, the societies distribute the license fees they collect to their composer and publisher members.
In 1914, composers and publishers banded together for the first time to form the American Society of Composers, Authors and Publishers (ASCAP), so that they could have a cost-effective way to collect license fees from the thousands of venues that perform music in this country. Today, along with ASCAP, there are two other organizations which perform the same function for different sets of composers and publishers in the U.S. They are Broadcast Music, Inc. (BMI) and SESAC.
In order to make sure that a station is not infringing any copyrights, a station generally enters into license agreements with each of the performing rights organizations, since they each represent a different group of composers and publishers.
6. Who is responsible for securing performing rights licenses for musical compositions?
A local station is generally responsible for the performing rights to musical compositions contained in the syndicated and local programming it broadcasts, including local promos, commercials and PSAs. For affiliates of the ABC, CBS and NBC television networks, performance of the music contained in network programming, promos, commercials and PSAs is generally paid for by the network as part of the network’s own performing rights license with ASCAP and BMI. At this time, the WB, UPN and Fox networks do not have separate contracts with ASCAP and BMI. Therefore, performing rights licenses for the music contained in programming broadcast by those networks are the responsibility of the local station.
7. What kinds of licenses do the performing rights societies offer to local television stations?
The societies generally offer two kinds of licenses. A station can choose which license is the most cost-effective, depending on the amount of music it broadcasts. The “blanket license“ allows a station to perform any and all musical compositions controlled by a society without having to report what music was used. Stations pay a yearly fee for that privilege.
The “per program“ license (PPL) also allows a station to perform any and all musical compositions controlled by a society, but the station pays the society only for the individual programs it broadcasts that actually contain music from that society. By utilizing the per program license, a station may reduce its performance license fees to a society by broadcasting programs that do not contain music licensed by that society. Stations choosing the per program license option for a particular society are required to send highly detailed reports to that society on a monthly basis.
8. What does a local station’s performing rights license cover?
Generally, performing rights licenses (both blanket and per program) between the station and each of the performing rights societies give the station the right to perform all of the musical compositions contained in each of the societies’ catalogues. The performing rights in virtually all musical compositions are controlled by one of the three performing rights societies.
The license covers the right to make so-called “non-dramatic“ performances, which include the vast majority of theme and background uses, and live performances. The license does not cover “dramatic“ performances (i.e., dramatizing or telling the story of a song using sets, costumes, props, etc.). In order to secure “dramatic“ rights, a music user must secure a license directly from the copyright owner.
IMPORTANT NOTE: A “performing rights“ license does not include the right to synchronize (i.e., record) musical compositions and recordings on film or video tape. (See questions 13, 14, 15 and 16.)
9. How are performing license fees determined?
The fees that are paid to ASCAP and BMI have traditionally been negotiated on an industry-wide basis. An organization called the Television Music License Committee (The “Committee“), representing local television stations, negotiates the license fees separately with each of the performing rights societies representing composers and music publishers. The Committee is comprised of a group of local broadcasters representing the major station groups, as well as smaller, individual stations.
Pursuant to the Justice Department’s consent decrees with ASCAP and BMI, if agreement cannot be reached between the societies and their licensees, either party may request a proceeding in the Federal District Court in New York to determine “reasonable rates.“ In a “rate court“ proceeding, ASCAP and BMI have the burden of proving that the rates they seek are reasonable.
10. How is an individual local station’s blanket license fee calculated?
In prior years, the blanket license has been calculated as a percentage of the station’s revenues. However, as a result of the most recent round of litigation/negotiation between ASCAP and the Committee, the ASCAP blanket license has been set at an industry-wide flat fee that is adjusted annually. The industry-wide ASCAP fee is allocated according to an “audience-based“ formula that was proposed by the Committee and approved by the Federal Court. The allocation formula is reprinted as Appendix A.
A new two-year agreement with BMI became effective in April of 1997. Stations pay BMI an industry-wide flat fee that is roughly 80% to 85% of the ASCAP blanket license fee. This blanket license fee is allocated among stations pursuant to the ASCAP blanket allocation formula.
SESAC, in the past, dealt individually with each local television station for the rights to its repertory. However, in January of 1997, an industry-wide blanket license flat fee was agreed to between the Committee and SESAC, which covers the period of October 1, 1995 through December 31, 2000. SESAC blanket license fees are allocated among stations pursuant to a formula created by SESAC that is similar (with some differences) to the ASCAP blanket allocation formula.
11. How is a local station’s per program license fee calculated?
If a station broadcasts very little of any particular society’s music, it may be able to reduce its blanket license fees to that society by utilizing the per program license. This is because the per program license requires a station to pay only for the programs that contain musical compositions licensed by a society.
License fees payable to ASCAP and BMI are a function of revenues attributable to, and music content of, both syndicated and local programming. A station must identify the performing rights society affiliations of musical compositions contained in such programming (including creating music cue sheets for local programming), report the revenue derived from all syndicated and local programming, and file detailed electronic reports on a monthly basis. A music cue sheet is a document that lists all of the musical compositions contained in a program, including their composers, publishers and how the music was used. SESAC does not offer a per program license option.
12. How can a PPL station maximize its savings by utilizing direct and source licenses?
A station can reduce its performing license fees to a society if it broadcasts a sufficient number of programs that do not contain music licensed by that society.
The copyright owner of a musical composition has the right to appoint a performing rights society to issue licenses and collect license fees on its behalf. A copyright owner may choose instead, on a song-by-song or program-by-program basis, to issue such licenses directly to broadcasters that request such rights. In such a situation, the performing rights license fee is paid directly to the copyright owner and not to the performing rights society. A license between a station and a copyright owner for the performing rights to a musical composition is called a “direct“ license. These direct licensing transactions are a major way for stations to reduce the amount of programming that would otherwise trigger a per program license fee payable to a society.
For example, a station can hire a composer to create news themes and background music to be included in its local programming, and secure a direct grant of performing rights from the composer (see question 18 below). Thereafter, the use of such music in a program will not trigger a fee to a society (as long as there is no other society-controlled music in that program). A station can also contract with one or more music libraries for such performing rights and accomplish the same purpose (see question 17 below).
For syndicated programming, a station can request that a syndicator provide programming complete with music performing rights included. These transactions are called “source licenses“ because the program supplier (i.e., the source of the program) has entered into a direct license with the copyright owner of the musical compositions. As of this writing, syndicators such as King World and Multimedia have been willing to enter into source licensing transactions with television stations.
13. What is a synchronization right?
A copyright owner also has the right to control how its musical compositions are recorded and reproduced. In the television and film production business, where musical compositions are recorded in synchronization with visual images, these recording/reproduction rights are called “sync rights,“ and a license to record is called a “synchronization“ license.
Synchronization rights should not be confused with so-called “mechanical rights,“ which have historically referred to the mechanical recording/reproduction of musical compositions on audio records, CD’s or tapes for distribution to the general public.
Record companies also have the right to control the re-recording and reproduction of their sound recordings. A license to re-record/reproduce a sound recording (e.g., Michael Jackson’s recorded performance of “Thriller“) in synchronization with visual images is called a “master use“ license.
14. Does a station need a synchronization license for musical compositions and recordings contained in network or syndicated programs?
No. When synchronization rights are required, they are generally the responsibility of the party that supervised the production process – usually the producer or owner of the program. Stations are not responsible for the sync rights to musical compositions or recordings included in network or syndicated programming.
A producer acquires these rights, most commonly, as a result of its agreements with composers hired or commissioned to create original music, or directly from the owners of any popular songs or recordings included in the program.
15. Does a station need a synchronization license for musical compositions and recordings contained in locally-produced programming?
The law in this area is unclear, and the answer to this question may depend on a number of factors. The producer of the program, in this case the station, is generally responsible for securing synchronization rights, if they are required.
Many broadcasters believe that the Copyright Act entitles them to “synchronize“ musical compositions and recordings in a locally-produced program and repeat that program or delay its broadcast for a period of six months, as long as the broadcaster has a license to “perform“ the musical composition. The Copyright Act, however, is restrictive and unclear. For example, among other restrictions, the program can only be broadcast in the station’s local service area, and only one copy of the program can be made. The station will have the greatest latitude with locally-produced and broadcast news programs.
When in doubt, the safest practice may be to seek knowledgeable advice and/or clear the synchronization rights through an experienced music clearance service. If the program will be broadcast for more than six months or on other stations, a synchronization license will almost certainly be required. Also, if a station plans to distribute video tapes or multimedia projects, it will have to secure synchronization licenses for the musical compositions and recordings that it does not own or control.
NOTE TO PER PROGRAM LICENSEES: While no synchronization license may be required to synchronize a musical composition in a locally-produced, non-syndicated program, the use of that musical composition may trigger a performing rights payment if the station is utilizing the per program license.
16. Does a station need a synchronization license for musical compositions and recordings contained in locally-produced promos or commercials?
Again, as discussed above, many broadcasters believe that the Copyright Act allows them to record music in local station promos as well. The safest practice would be to clear those rights through a knowledgeable and experienced music clearance service.
With regard to locally-produced commercials, however, a synchronization license would be required to use musical compositions and recordings in commercials produced locally for third party advertisers.
NOTE TO PER PROGRAM LICENSEES: Use of musical compositions in local promos, PSAs and commercials does not trigger a separate music performance license fee to ASCAP or BMI. The per program license includes an “incidental use fee“ that covers such uses.
17. What is a music library and what rights will they grant?
Music libraries provide commercially-produced recordings of musical compositions designed specifically for broadcast and film background use. Often, a station can avoid the necessity of hiring composers to write and produce news themes, station promos, etc., by acquiring the rights to pre-recorded music libraries.
Music libraries generally sell stations an annual license to their catalogues. Most commonly, such licenses only give a station the right to synchronize the recordings in local programming. They do not allow a locally-produced program to be broadcast on other stations, nor do they include performing rights unless specifically requested.
NOTE TO PER PROGRAM LICENSEES: A direct license to perform the musical compositions contained in a music library can often be purchased from the library for an additional license fee. This practice allows a per program station to reduce the number of programs that will trigger a performing rights fee to ASCAP and/or BMI. However, some music libraries do not grant performing rights; therefore, stations who utilize a per program license should ask music library vendors about their licensing policies before entering into license agreements. Additionally, the language in the license agreement that grants performing rights must be clear and unequivocal.
18. If a station wants an original musical theme for a local program, can it contract directly with a composer to get a direct grant of performing and synchronization rights?
Yes. A station generally contracts with a composer in one of two ways. First, a station can enter into a simple license agreement with a composer in which the composer creates original music for the station and licenses the musical compositions, and recordings thereof, to the station for the station’s needs. In this situation, the composer retains ownership of the music copyrights but grants all necessary rights (including performing rights, if requested) to the station. Second, a station may hire a composer as its employee or independent contractor to create original music. In such relationships, the station owns the copyrights, including the performing and synchronization rights.
A detailed discussion of license agreements, “employee for hire“ and “independent contractor“ agreements is beyond the scope of this booklet. In order for these relationships to properly vest the necessary rights or copyright ownership on the station, there are complicated technical requirements and contractual issues which must be satisfied. For additional information, you should contact your attorney or MRI directly.
19. Does a station need a license to use music from unsolicited tapes which are sent to the station?
Tapes are sometimes recorded by local “garage“ bands looking for a break – or by cousins of station employees who are would-be film composers.
Special care is required in these situations. Artists just starting out on their careers may not be members of a performing rights society; therefore, the performance may not be covered by the station’s blanket license. In such a situation, it is prudent to have the party submitting the tape sign a very broad license giving the station all performance and synchronization rights to utilize both the music and the recording. The station must be sure that it is dealing with the true owner of the music and the recording.
20. How does a station get a synchronization and master use license for popular songs and recordings?
Synchronization rights for songs are not licensed collectively like performing rights. A user may have to deal directly with the music publisher, the publisher’s agent, the songwriter, or the songwriter’s heirs, attorneys, etc. If several parties own a composition, each may have to be contacted. Some music publishers retain the function of quoting license fees, approving uses and issuing licenses themselves. Other publishers prefer to utilize the services of an intermediary organization (e.g., The Harry Fox Agency, Inc.), which the publishers retain to perform those functions on their behalf.
Record companies generally control and administer the licensing of their recordings themselves; however, in some instances, the prior approval of the performing artist may be required, and the musicians and background singers who performed on the recording may have to be compensated.
There is nothing that requires a music publisher or record company to give you a license if they don’t want to. In practice, many television and film producers utilize a music clearance service to determine copyright ownership, negotiate fees and handle the paperwork. For a more detailed discussion about securing synchronization rights, you may request a copy of “A Television and Film Producer’s Guide to Music Clearance“ from the Copyright Clearinghouse, a division of MRI.
21. Does a station have to pay for music that is in the public domain?
There is a certain amount of music for which all copyright protection on a worldwide basis has lapsed. This “public domain“ music can be used without payment for performance or synchronization rights.
However, as a result of the recently implemented General Agreement on Tariffs and Trade (GATT), certain works, which were previously in the public domain, have had their copyrights restored. As of this writing, there is legislation pending in Congress that would, if enacted, extend the term of copyright protection in the U.S. by an additional 20 years. Therefore, it has become difficult to determine what music may now be in the public domain. It can take as much time and expense to determine whether a composition is in the public domain as to clear one that is not.
If you plan to use public domain material, you must be sure you are using the original public domain version. Music that is in the public domain can be modified by a composer who may add new material. The resulting arrangement may be entitled to separate copyright protection for the new elements. If you are using a copyrighted arrangement of a public domain work, you must secure permission to use the arrangement from the owner of the copyright in the arrangement.
22. What are music cue sheets and why are they important?
A music cue sheet is a document, usually prepared by the producer/distributor of a program, that lists all of the music contained in a production including the title, composer(s), publisher(s), performing rights affiliation, and use and timing of each musical cue. The cue sheet is used by all parties in the royalty distribution process to determine the amount of royalties to be paid for the public performance of the music contained in the program, and to whom those royalties are paid. More importantly, the information contained in the music cue sheet determines whether a performing rights fee must be paid to a society. Historically, cue sheets for syndicated programs have not been available to the television industry. Therefore, the Committee has launched an effort to seek access to music cue sheets for syndicated programming.
23. What should a station do to help the industry obtain cue sheets for syndicated programming?
The Committee needs to expand and improve the integrity of its programming and music database. Therefore, the Committee has recommended that each station ask each of its syndicators to send one copy of all music cue sheets of each of their programs to MRI. The Committee has suggested the following contract language for inclusion in all syndication agreements:
“It is agreed that (Syndicator Name) will cause to be sent to Music Reports, Inc. at 21122 Erwin St. Woodland Hills, CA 91367, one copy of the music cue sheet for each (Series Episode or Movie Title) in this package. If a copy of the cue sheet has already been sent to Music Reports, Inc. by (Syndicator Name), then no additional copy need be sent.“
Tags: Broadcaster, Copyright, Licensing, Performance, Synchronization