The History Of Music Licensing

The business today, the terminology and why the industry works as it does

The music industry is a large and complicated business. This section takes you through a brief history of music licensing. Reading it should help you understand the business today, the terminology and why the industry works as it does. In particular, the focus is on music licensing and how you can correctly license music for use in film, TV, commercials, video, radio, corporate films and the web.

The Early Years

The best place to start when trying to understand the music business, is to remember that it is a very old business which today sits (sometimes happily, sometimes not) in a very modern world. The structure of the business, the way licensing works, copyright and the various confusing and old fashioned terminology all stems from the roots of music commercialisation, when the likes of Beethoven and Bach filled concert halls and people who you now read about in Jane Austin novels wanted to imitate these genius composers on their own piano-fortes at home. From these beginnings, the concept of music ‘copyright’ was born and the ‘music publisher’ was created as a person or company who would print the composer’s sheet music and publish (or sell it) to members of the public who wanted to play that composers music on their own instruments. Remember, we’re in the days before radio, even grammar phones here…

At this time, the composer, being a clever sort of person, gave (or assigned) to the music publisher their music, in exchange for a payment, every time the publisher sold a book of sheet music. This payment is known as a ‘royalty’.


 
Now the music publisher is also a clever person. The publisher is happy to sell the sheet music to Ms Jane Austin if she wants it for piano practice - that’s simple. But… suppose Ms Austen is a talented pianist and people want to pay to listen to her perform. Well, if people want to pay Ms Austin, then the clever music publisher would like a share of that money too thank you very much, and so would the clever composer! And so the ‘performance royalty’ is born. In this instance, the publisher grants a ‘license’ to Ms Austin to perform the music in exchange for a share of the performance revenues. The publishing company pays a share of this money to the composer who wrote the music in the first place – the ‘writer’s share’.

A Little Later

Now scoot forwards a hundred years and a new way of listening to music has been invented. The grammar phone. Suddenly, the music publisher can not only make money by selling books of sheet music, but they can also make money by selling records made from a ‘recording’ of the composer playing the music. In the same way as before, our composer also gets paid every time the publisher sells one of these new fangled records. Also, just like before, the music publisher only sells the customer the record for ‘personal use’. If the customer is actually a business, and they want to play the recording to the public – say in their shop, in a theatre or (in a hundred years time) on the Radio, the publisher and of course the composer, will want to be paid a ‘performance royalty’ just as they did in the days of sheet music. Now, the most important part to understand with this ‘performance royalty’ is that it is the owner of the entity that ‘broadcasts’ the music that pays the royalty. So, if the recorded music is played in a shop, the shop owner must pay a ‘performance royalty’. If the record is played in a theatre, the theatre owner must pay a ‘performance royalty’. If the record is played on radio, the radio broadcaster must pay a ‘performance royalty’.

The Invention Of Film

 Now scoot forward another fifty years and along comes the “recorded picture” or what we call film, television and video… Just like performing in a theatre, composers and music companies regard music in the background of a film or TV programme as a “performance”. The only difference being that the “performance” is performed through a television or the internet as opposed to in a theatre. So, it the same way, the broadcaster, who broadcasts the performance, pays a royalty to the music publisher and composer.

When the music publisher licenses music to a production company who is making a video with music which will be “performed” on TV, film or the Internet, the music publisher grants the production company a “synchronisation” license. Or, the license to synchronise a piece of music to a piece of film.

Synchronisation Explained
Music Today

 Today, there are many media outlets for the “performance” of music in film and video. For example multiple TV and Satellite channel, the internet, via broadcasters such as YouTube, Video on Demand, Cinemas etc. With so many media outlets, it is difficult and time consuming for music companies and broadcasters to monitor and collect the performance royalties that are due to be paid. This is where “collection societies” enter the equation. You can learn more about a “collection society” here. But in a nutshell, they collect one single payment from a broadcaster for the performance of all music, and then they calculate how that payment should be divided up between the various music publishers and composers.

So, that's a (not so brief) but hopefully simple explanation of music licensing. We’ve not addressed every aspect of the industry here, so as to try and keep things simple. If you have any further questions, please contact us!

If you've stuck with us through all of the above, you might now be thinking: "So where does Production Music sit in all of this?" or even: "What is Production Music anyway?". Click on the links below for the answers. 

What Is Production MusicProduction Music - Jargon ExplainedSearch Our Music Library Now

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