Understanding Music Copyright—Streaming, Music Videos, and Licensing

Understanding Music Copyright—
Streaming, Music Videos, and Licensing

By David Frazee -
Estimated reading time: 8 minutes

written by: David Frazee

I know how important copyright is, and I know that it can also be completely confusing and overwhelming… so I’m breaking it down and going through it, bit by bit.

This is the third article in the Copyright series. If you missed the first and/or second article, please take a moment to go back and read them before continuing this one.


Stream Digital Versions (Audio only)

You know some of your fans are all over the streaming services, such as Pandora, Spotify, and XM radio. While you don’t want to put all of your music on there (since they won’t buy it if they can stream it for free or almost free), you are interested in offering two songs off of your newest album—one is an original, and one is a cover.

But streaming is a bit more complicated than it seems, and you might have no idea what rights are involved with putting your music out there. The good news is I’ve done some digging for you.

Streaming companies gain a license from musicians to play the recordings; the particular license depends on whether the streaming service is interactive or not. An interactive service—such as Spotify—allows the user to select the exact songs they listen to. In that case, the company would have to obtain the right to “digital performances of sound recordings” from the copyright owner. On the other hand, non-interactive services—like Pandora or XM Radio—provide a pre-programmed or semi-random combination of tracks; with these services, users cannot control exactly what song plays or when. These services need a “statutory license.” SoundExchange is a service authorized by Congress to administer statutory licenses.

Additionally, streaming digital music is considered a public performance, so the services need to obtain performance rights to perform underlying musical composition.

So, to stream music online, you will likely need to transfer the underlying performance rights in the musical composition and the right to the digital performances of your sound recording to the service providing the streaming.

Unless you have given up some of your rights, you have the right to place your own music online or on the radio.

If you have not already created a digital version of a song someone else created, you will need a mechanical license to create that sound recording in digital form and to stream that song. Again, most copyright owners use the Harry Fox Agency to manage this interactive streaming license. Additionally, you will need a public performance license for the musical composition, and you will need to pay the performance fees to the correct PROs. After acquiring the proper rights from the original song owner or publisher and creating your version, you will need to give the service the right to the digital performance of your sound recording.

Creating a Music Video

In an effort to promote your new album, you’ve taken the best songs—the one with the killer hook, and the crowd pleaser—and come up with crazy-awesome concepts for a music video. You’re ready to start production, but you want to make sure you cover all the bases first.

When you create a music video of your original songs that is not being live streamed, your reproduction, distribution, and synchronization rights come into play. “Synchronization” is a special kind of right not precisely defined by law; that said, it is generally understood to be part of your reproduction rights and comes about anytime visual images are placed with your music.

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Comments

Hi David,

Thank you for all the legal information! Our church is recording a CD of cover worship songs to give away free to the community. As long as we don’t sell the CD’s, do we still need to pay royalties to the artists? If we secure a mechanical license for each song and the artist gives us permission, do we still pay royalties to the artists?

Thanks again!
Becky

Becky, David is unavailable this week. We didn’t want your question to go unanswered, though, so we did a little research. We thought that maybe your church’s CCLI would cover this, but the CCLI website clearly states that their licenses do not cover recording and producing a commercial CD.

Creating and distributing (even not charging for the CDs) these recordings pulls in the original artists’ reproduction and distribution rights. Obtaining mechanical or compulsory licenses clears you; these are available from the copyright owner or from Harry Fox.

If you go through the copyright owner, they may or may not choose to waive the royalties. If you go through Harry Fox, the process of obtaining the license asks for the songs in question, the length of the recordings, and the number of copies you’ll be making. If there are 10 songs on your CD, the songs are all under 5 minutes, and you’re ordering 1000 copies, your cost will be $910 plus the per-song registration fee of $14. So, $1050 total. That $910 is the royalty that gets paid to the copyright owners. It’s $.091 per copy per song (under 5 minutes).

We hope this helps clear the issue up.

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