This course provides an engaging and methodical insight into the past and present cultural and commercial music industry developments, directions, and trends. It will equip the students with the knowledge and skills necessary to appreciate, understand and more productively participate in today’s music industry field.
Regulations 3: Musical Works Licensing (continued)
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From the course by West Virginia University
Today’s Music Industry
51 ratings
From the lesson
Publishing and Copyright
Meet the Instructors
Darko VelichkovskiMusic Industry Program Director
Music Industry
Moving on from broadcasting to the recording industry,
another type of the license for the
musical compositions is the
mechanical license.
Now, Mechanical License is a compulsory license,
required in order to record a
musical composition, and to
publically distribute the recording.
Statutory rate for this license is
currently 9.1 cents per song per copy distributed.
Being compulsory, this license can not be refused
if the statutory rate is paid,
with one exception:
the Copyright Act provides that the
owner of the musical work
(which means a musical composition, right?)
has the right to determine if the
composition will be initially
recorded and publically distributed as such,
and if so, to grant the license
to the entity of his or her choosing.
After the musical work has been initially
recorded and publically distributed,
this license can not be refused any more
if the statutory rate is paid.
Ordinarily, a record label requests
this license from a music publisher in
order to record a music composition owned
by the publisher.
To simplify and streamline the process
of mechanical licensing,
a nation-wide agency is set up as a clearing
house for mechanical licenses,
called Harry Fox Agency,
which has authorization to administer this license
on behalf of most of the U.S. based publishers
and authors at the statutory rate.
So just like the PROs are authorized
to administer the performance rights licenses,
Harry Fox Agency is authorized to administer
the mechanical licenses,
forwarding the payments to the publishers,
while keeping a percentage for the operating expenses.
It should be noted though,
that while most of the performance rights
licenses are obtainable only through the PROs,
the mechanical licenses can, and often are
obtained directly from the publishers
for less than the statutory rate of 9.1 cents per copy distributed.
Meaning, that record labels and producers
often negotiate this license with
publishers in order to receive more favorable licensing rate.
The license somewhat related to the mechanical license,
is the Musical Work Sampling License.
Musical Work Sampling License is a non-compulsory license
required in order to use any portion
of a musical composition as the
basis for a sound sample utilized
in a sound recording.
If a producer takes however
small portion of a copyrighted
musical composition,
records it and edits it so it
becomes a part of a recorded song,
as a loop, or as a one-shot segment,
that requires the Musical Work Sampling License.
Also, if a producer takes however small portion
of a pre-existing recording of a
copyrighted musical composition,
and edits it so it becomes a part of a recorded song,
also as a loop, or as a one-shot segment,
or any other way, that too requires the
Musical Work Sampling License, plus the
Master Use License, which we will discuss
later in the course when we talk
about the recording industry itself.
The Musical Work Sampling License
is payable by the record producers
and record labels directly to publishers.
The license is not mandatory, and the rate is freely negotiated.
The license seemingly related to the
public performance license we spoke about
earlier, but in fact very different in nature,
is the Transcription License,
or the Electrical Transcription License
as it’s sometimes called.
Transcription License is a non-compulsory license
required in order to use a musical work
as background music in businesses,
public buildings, spaces, and transport,
or in radio broadcasts.
Seems like that was covered by the
public performance license,
but it really refers to something else.
It refers to licensing the musical compositions
that producers want to use to record
the background music to be played in businesses,
public places and transport,
or as a part of a radio show or a radio commercial.
It refers to the compositions the producers want to “transcribe”,
to record for such use, thus the “Transcription License” name.
So this license is really a type of a mechanical license,
allowing the licensee to record a composition,
just not intended for duplication and sale
of the copies of the recording,
but for a limited type of public performance or radio broadcasting.
Since the intended use includes
a form of a public performance,
the public performance license
is sometimes contained in its scope,
and sometimes not.
If it’s not included,
the public performance license must be
obtained from the relevant PRO
before the public performance of the material.
The Transcription License is payable
by the background music companies,
in-flight entertainment productions,
radio program producers, etc.,
directly to the publishers.
The license is not mandatory, and the rate is freely negotiated.
The license actually related to the public performance license,
but administered differently,
is the Jukebox License.
Jukebox License is a negotiated type
of a public performance license and,
as such, is controlled by the Performing Rights Consent Decrees,
like all the other performance rights licenses.
It is administered and managed by the Jukebox License Office (JLO)
on behalf of the PROs and the Amusement and Music Operators Association (AMOA).
This license is payable by the jukebox operators to the JLO,
and then collected by the PROs
and distributed to their authors and publishers.
The license rates are not statutory
and are negotiated between the PROs and the AMOA
according to the guidelines set in the current Performing Rights Consent Decrees.
The next music license in line,
is the Synchronization License.
Synchronization License is a non-compulsory
license required in order to use a musical composition
in a motion picture, a video,
or in a television based work.
It is payable by the audiovisual works producers
directly to publishers.
This license is not mandatory,
and the rates are freely negotiated.
Upon receiving the license,
the producers can then record the composition
in question and place it in their movie,
video, or television production.
This license thus does not include an
existing recording of a song,
but only a composition to be recorded
by the licensee for the use in an
audiovisual production.
To use an already existing recording
of a song in the same context
requires an additional license,
which we will cover later in the course
when we talk about the recording industry.
Also, the synchronization license
does not include any form of the broadcasting
of the audiovisual production,
which is licensed separately through the public
performance rights license we spoke about earlier.
Nor does it include duplication in tapes or DVDs.
Such duplication is covered by the
video reproduction license.
Video Reproduction License is another
non-compulsory license required in order to reproduce
and distribute to the public the video tapes
or discs that contain copyrighted musical works.
This license is sometimes negotiated
as part of the Synchronization License.
Like the synchronization license,
it is payable by the audiovisual works producers
directly to publishers.
The license is not mandatory,
and the rates are freely negotiated.
The license that is often just a form of a synchronization license
is the Special Use License.
Special Use License is a non-compulsory license
required in order to use a musical work
in various merchandizing tie-ins,
and in a wide rage of products,
including video games and television commercials,
in which case this license becomes,
as we said, a type of a synchronization license,
allowing a licensee to record a musical composition
for the use in video games or television commercials.
This license is payable by the products’
producers directly to publishers.
The license is not mandatory,
and the rate is negotiable.
And finally, we will conclude our list
of the musical works licenses with the
so-called Derivative License.
Derivative License is a non-compulsory license
required in order to make a derivative version
of the original musical work,
often referred to as an “arrangement”.
This license is only required if the new arrangement
is substantially different from
the original work.
It is payable by the arrangers,
or the recording artists
or their record labels,
directly to the publishers.
The license is not mandatory, and the rate is negotiable.
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