The Ins and Outs of Music Licensing
Music is an important part of human life. Music had been around for hundreds of years, and every decade it got better and better. In fact, the demand for music has been steadily going up for the past 10 years, and this trend is likely to continue for the foreseeable future. It has to do with the fact that the music industry makes a lot of money every year. It is an unstoppable force because people are always looking for the next great artist. This keeps the cycle going and keeps music important. The demand for music content is higher than it has ever been. Since the turn of the century, the money made from music around the world has been stable. The amount of money is counted in billions.
As technology improved, music became more technical, complicated, and popular. Others claim credit for using music they don’t own. Independent musicians today know that they need to protect their work for legal reasons. With music licensing, you can make sure that your property or work is legally protected.
What is licensing music? Copyrighted music is licensed through music licensing. This lets the person who owns the music keep the rights to their own original work. It also makes sure that the owner of the musical work gets paid if someone else uses their music. Without separate agreements, the music licensing companies can only use the work in limited ways. In music licensing, you could get a license for your music, compositions, or songs.
During the licensing process for music, the groups involved would talk about certain terms. If you are a musician who works on your own, you are the licenser. Since you are the one who made the music, you are the owner of the copyright for the licensed work. The music licensing company would be a licensee, since they would be the ones to send your work to other industries. If your music is used in live performances, TV shows, ads, campaigns, video games, etc., they will also collect the royalties and send them back to you.
Music licensing also has two types of contracts: exclusive contracts and non-exclusive contracts. If you have an exclusive contract, it means that your work will only be licensed to one music licensing company. Only one company is allowed to sell and distribute your work. If you signed an exclusive contract for your song or album, you cannot use the same music content and get it signed by other music licensing companies. The agreement is only between the licensor and the licensee, and it is private.
A non-exclusive contract lets another party distribute your work, and it doesn’t stop the licensor from selling their music to other music licensing companies or licensees. An independent musician can sign a contract with more than one company that lets them use the same music content. People usually use non-exclusive contracts so that they don’t get stuck in a restrictive contract before their work becomes popular. This kind of contract is meant to protect music artists from being taken advantage of when they are just starting out and trying to get their music out to more people.
There are also cases where the music content is paid for directly. We call this “Sync Fees.” Sync fee is a license that the owner of a copyrighted piece of music gives to a licensee so that the music can be used in ads, movies, TV shows, movie trailers, video games, and other visual media. For example, a video producer needs music content for a project right away and doesn’t have much time to find it.
In these situations, the artist and the music licensing company will be contacted directly to talk about how the original work could be used and how much money would be paid up front. Sync fees can be as low as a few dollars or as high as thousands of dollars. Usually, the payment depends on how big and well-known the company is. If the company is well-known, there is a chance that the sync fee will go up.
We need to realize that businesses are paying more than ever before for music. The influx of people and money into different industries is worth billions of dollars, and the music artists who got their music licensed will get a big chunk of that money. What music is about is very important. Every business needs audio and video content. You can’t have commercials, TV shows, or movies without music.
Music licensing pays for the use of assets. This is called paying a royalty. A royalty fee is the payment that one party gets from another for continuing to use an asset that is protected by intellectual property rights. If your work is used in live public performances, you can get paid for it. Since you own the rights to your music, you get paid every time it is played live.
In 2014, the American Society of Composers, Authors, and Publishers (ASCAP) collected more than $941 million in license fees and gave its members $827.7 million in royalties. BMI, on the other hand, collected more than $1.01 billion in license fees and gave its members more than $877 million in royalties in 2015.
Licensing music is the modern way to make money from music. In the last few years, there have been less physical sales. Streaming music has taken over because it’s easier and more useful thanks to the Internet. With the rise of streaming sales, the amount of money that could be made from royalties could go through the roof in the years to come. In fact, a website for the Australian Financial Review said that streaming made $2.5 billion in US music sales last year, making it bigger than digital downloads as the biggest source of revenue for the music industry. As shown in the picture below, streaming music around the world is expected to bring in more money in the coming years.
Music licensing and streaming have grown a lot thanks to the internet. Twenty years ago, music distribution wasn’t nearly as big as it is now. The two industries that need music content the most are TV shows and movies. More and more TV shows, movies, commercials, movies, ads, and lots of video games need music these days. It’s safe to say that the internet opened people’s eyes to the possibilities behind it.
YouTube is one of the most popular websites in the world. People use, copy, rework, copy, change, and perform music from all over the world. It also has lots of ads that have music in them. YouTube uses a Content ID System to keep track of all this information. If your music is licensed, you can contact this site and they will look at their data to see if your work is being used by other people. As the licensor, you have the power to do things like turn off the audio that goes with your music, prevent a whole video from being watched, keep track of how many people watch the video, or make money off of it by putting ads on it. There are different rules in each country. But YouTube has a lot of ads, and it’s likely that you can make money from this site.
If you are an independent musician, you need to get better at what you do and make it more professional if you want to get signed by a music licensing company. Today, there are billions of dollars at stake, and you want at least a piece of the pie. Making money from your passion is never easy, but you have to do what you need to do to make it work if you want to be successful.