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Online music services: a 101 guide to licensing

Written by: Jon Hall

To begin, let’s outline what we’ll cover and what we won’t. The scope for this guide covers licensing of publishing rights for online, multi-territory (i.e. available to users in more than one country) music services.

ICE does not license services only available to users in only one country, licensing for public performance rights in venues (bars, gyms etc…) or the rights required by broadcasters. For these services you would need to contact the appropriate Performing Rights Organisation (PRO) – for example PRS in the UK, GEMA in Germany, STIM in Sweden.

So, we’ve established that you’re a new digital service utilising music, available in more than one country, and you need to get licensed.

What do you need to do?

1) Identify the types of rights you need.

There are different kinds of music rights and depending on what your service does, you’re going to need to clear the corresponding rights from the respective rightsholders.

To understand the different types of rights, it’s important to know that rights in music exist:

1) in the song that was written (covered by Publishing rights)

and then again separately

2) in the recording (covered by Recording rights).

For the types of service we’re discussing, you’re most likely going to need both Publishing and Recording rights.

Publishing rights are further divided into Mechanical and Performing rights;

*The ‘Mechanical’ publishing rights cover the reproduction of a work, be that in a stream or download.

*The ‘Performing’ publishing rights (also known as communication to the public rights) cover that musical work being transmitted to a user be that in a stream or a download.

Depending on what functionality your service has you may also need to consider two other types of right: sync rights and lyric rights.

Sync rights are for when music is combined with still or moving visual images, e.g. video streaming.

And Lyric rights cover the use of the written Lyrics, e.g. in a Karaoke service.

Remember songs are often co-written by multiple songwriters, whose rights may be represented by different rights organisations so you will need suitable publishing rights coverage from all parties.

Recording rights cover the copyright in a specific sound recording.

A top-level outline of the different rights is here:

If you want a more complete explanation of all of the different rights and how they relate, check out ‘Dissecting the Digital Dollar’ here by Chris Cooke.

So how does this relate to your service?

For example, a service offering straightforward downloads of music would need Mechanical/Performing Publishing rights for the songs and Recorded rights for the sound recordings.

An online fitness class, where the music was used with visuals (video streaming) would need Publishing rights for Mechanical/Performing and most likely Sync for the initial fixation of the music with the visuals, and separate Recorded rights.

Here are some common service types and the highlighted corresponding rights:

2) Establish your territory scope

Now you’ve identified which types of rights your service functionality needs, you need to consider where your service will operate.

You’ll need to understand what level of business you expect in your different territories, as licensing rates may vary slightly for use in different regions. Also, how you’re monetising your service. These projections will likely be part of your business plan already.

The range of territories ICE covers is here (FAQ #3)

3) Determine what music (repertoire) do you want on your service

You also need to decide which kind of music you’ll offer on your service, e.g., is it specifically focussed on certain genres? Or do you need broad coverage? Different rightsholders license different catalogues of songs. Depending on what catalogue of music you want to offer, you’ll need to deal with different rightsholders (again remembering individual track co-writers may have different publishing rights representatives).

Details on what’s included in the ICE repertoire are in the terms & conditions here

Ordering your licences

Now you have a picture of the types, territories and repertoire you need music rights coverage for, the next steps are securing those rights with the rightsholders.

Publishing rights for the extensive ICE Core repertoire are available from us. If your service revenue is under €250,000 a year in the territories covered by ICE, you can use the Licensr tool to order these. Simply answer a few questions and get the Mechanical/Performing rights in moments, paying with a credit card. Licensr is here.

If you then also need Sync/Lyric rights, you can contact us to add these on to your mechanical/performing rights order here.

There are additional licensors of publishing catalogue that you will likely need to clear rights with, for example, SOLAR for Sony/ATV and EMI music publishing, ARESA for BMG and PEDL for Warner Chappell.

Recorded rights are licensed separately by record labels or music distributors.

 

2 Responses

  1. Bob says:

    Thanks for the informative post! I have one question, though, regarding this part:

    “For example, a service offering straightforward downloads of music would need Mechanical/Performing Publishing rights for the songs and Recorded rights for the sound recordings.”

    Could you explain to me why a service offering music downloads would need the Performing rights, and not just the Mechanical rights? I understand that for streams the Performing rights are necessary, but is this also the case with downloads?

    • Gary Smith says:

      Sure, the Performing rights (also known as the communication to the public right) covers the download being communicated (via the internet) from the download store to the user.

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