Music licensing is the licensed use of copyrighted music. Music licensing is intended to ensure that the creators of musical works get paid for their work. A purchaser of recorded music owns the media on which the music is stored, not the music itself. A purchaser has limited rights to use and reproduce the recorded work without a separately arranged agreement.
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The following words and phrases appear in discussion of music licensing:
Broadcasting, in the context of music licensing, means the playback of pre-recorded or live music for groups of people other than the licensed purchaser of a given work, beyond what might be normally expected in a social setting. There has been some legal wrangling over the years about what, exactly, constitutes a 'broadcast' for the purpose of license/copyright enforcement. Legal claims are filed frequently against bookstores, bars, and live music venues that broadcast music without paying for it.
The music broadcast in grocery stores and elevators is a service which is purchased from one of many organizations that offer it (the largest of these is Muzak). Part of the fee paid for this service is used to cover licensing costs.
Radio stations pay fees for the rights to broadcast music. Fees are paid to licensing bodies such as Broadcast Music Incorporated (BMI) and the American Society of Composers, Authors, and Publishers (ASCAP). Radio stations and businesses typically pay a flat rate once a year, called a blanket license, which can vary based on the amount and nature of music usage. BMI and ASCAP determine how to divide up the licensing profits among copyright owners.[3] Radio stations calculate payment to license holders by periodically auditing the music being played. The audit results are submitted to the licensing relevant body for the station's territory. This information is used to calculate the average number of plays each artist has received.
Licensing issues are often encountered when television shows or films using copyrighted music are released on Digital Versatile Disc (DVD) format.
When a song is cleared for usage on a TV show, historically to save money the clearance typically only applies to television airings of the show in question. Thus, when the show is considered for DVD distribution to the home video market, the rights to the song must be renegotiated in order for the song in question to be included on the DVD. Most producers/production companies now include the rights for DVDs or "all media now known or hereafter devised." This assures production companies of the right to re-release without incurring additional licensing fees.
If the process of clearing the rights to the song is prohibitively expensive for the home video distributor, or if clearance is refused by the copyright holders of the original song, the affected song is usually replaced with a similar (sound-alike) one, or the footage containing the copyrighted song is edited out. In a few cases, television shows which make extensive use of copyrighted music such that the cost of "after-market" licensing is high are withheld from release on DVD (two notable examples are The Wonder Years and Cold Case). Home video release of a number of television series and films have also been delayed and occasionally cancelled for this reason[4] (for example, Sony Entertainment cancelled the planned October 2007 DVD release[5] of Dark Skies for this reason but was eventually released on January 18, 2011 through Shout! Factory)[6].
The song “Happy Birthday to You” is the best known song in the world and generates over $2 million in royalties each year for its copyright owners.[7] The original author of the words to the song is unknown, however, the current owner is AOL Time Warner, who receives licensing revenues through the ASCAP. The music itself was written in 1893, and due to multiple copyright extensions, will remain so until at least 2030. In 1989, when Time Warner first purchased the piece, movie licenses for the song were going from anywhere between “a few thousand” to $50,000.[8] One reason the owner, Birchtree Ltd., decided to sell the copyright ownership was because they did not have a large enough unit dedicated to monitor its usage in new media. This became key in maximizing financial benefit, because previous owners failed to go after those who unlawfully used the song for over 20 years.[9]