Nowadays, music is used everywhere and in everything, such as in  commercials, fan covers, movies, in live performances, on all types of online streaming platforms, on radio stations, in the background of cafes, bars and hotels. Each composition is entangled in a complex network of music licences designed to protect the creators’ Intellectual Property and ensure they receive due compensation for their work. In this article, we introduce you to each music licence, explain the cases in which one is needed, and discuss who is responsible for managing them and how to ensure you’re getting paid fairly through them.

But before delving into what  music licences are, let’s go back to some of the basics. CMO stands for Collective Management Organisation, and you typically find them outside the United States. In the U.S., there are PROs (Performing Rights Organisations) for collecting performance royalties and the MLC (Mechanical Licensing Collective) for mechanical royalties. Both of these royalties are generated when a music composition is played: performance royalties are paid when a song is played publicly, and mechanical royalties are paid when a song is purchased, downloaded or streamed. For a more in-depth understanding of how these two different rights are applied, you can go back to our ‘Show Me The Money: A Complete Guide to  Music Royalties’. Most territories have their own organisations for collecting royalties. Across the Atlantic, in the UK, for example, you have the PRS (Performing Rights Society) and the MCPS (Mechanical Copyright Protection Society). 

CMOs are essential players in the whole  process of artists, songwriters and creators getting paid, as they are responsible for managing licences and collecting both performance and mechanical royalties, ensuring they reach the rightful copyright holders. They serve as intermediaries between rights holders (artists, labels, composers, publishers) and those who seek licences to use copyrighted music. Their function is to simplify royalty collection by collecting fees from licences granted to venues, broadcasters, digital platforms, and businesses. Their role is essential in supporting creativity in the music industry, serving as a bridge between creators and listeners. As technology shapes our music consumption habits, CMOs are becoming more crucial in ensuring fair compensation and guiding the continuous evolution of the music industry.

Understanding the specifics of music licences is a key part of understanding how the industry works. These licences, which are essentially legal threads, connect artists, platforms, and listeners, directly influencing the dynamic interaction of creativity and consumption in the music industry.

When an artist creates an original work and registers the copyright, that song becomes their intellectual property. It means that by law, that work cannot be used by anyone other than the copyright owner without their consent. Every copyright owner has control over their work, meaning that a licence is needed to have permission to use someone else’s work for specific purposes. 

WHAT’S A MUSIC LICENCE?

A music licence is a legal agreement that permits you to use someone else’s copyrighted work. Any creative work safeguarded by copyright can be subject to licensing, including musical compositions, sound recordings, and lyrics. These licences will outline the terms and conditions under which individuals, businesses, or organisations can use the music. Licensing plays a fundamental role in facilitating the lawful distribution and consumption of artists’ works.

WHAT ARE THE DIFFERENT TYPES OF LICENCES? 

There are  six different types of music licences, each capable of generating distinct royalties for the artist, songwriter, publisher, and label.

• Public Performance: This is one of the most common types of music licences issued. It is required for live performances or when you play any copyrighted music in a public space. Performance royalties are earned when a musical work is performed or broadcast publicly. To play a song at a public venue, on a radio station, or on a digital streaming platform, one needs to obtain a Public Performance License. This includes businesses that play music in their store, bars, all the way up to concerts. For example, a radio station secures a performance licence from a PRO to broadcast music to its audience. The PRO collects royalties from the radio station and distributes them to the respective copyright holders, including songwriters and publishers. Performing Rights Organisations (PROs) such as BMI, SESAC, and ASCAP generally manage public performance licences and issue music royalties to artists on a per-user basis.

• Mechanical Reproduction: This is the type of licence needed when someone wants to reproduce and distribute a copyrighted song in a digital or physical format. When creating cover versions, remixes, or recorded copies of existing songs, obtaining a mechanical licence is essential. This licence will grant you the authorisation to reproduce and distribute the musical composition to the general public. For example, a streaming platform obtains mechanical licences to include a vast catalogue of songs in its library. The platform pays royalties to the copyright holders based on the number of times users stream the songs. Or, if you want to record and release a cover song version, you need a Mechanical Licence. This licence ensures you have permission to use the underlying composition. However, please be aware that this does not give the rights to a sound recording, only the right to record the song. Like we mentioned, in the UK the MCPS (Mechanical Copyright Protection Society) and Harry Fox Agency in the US are responsible for mechanical licensing, facilitating the process for both copyright holders and those seeking licences. Check out an example of a Mechanical Licence.

• Synchronisation (Synch): As the name suggests, this licence is needed if you want to synchronise music with visual media, such as video games, films, and TV Shows. A Synch Licence will grant you rights to a specific song with your visuals, ensuring you have legal permission to use the copyrighted music in your project. For example, a film production company obtains synch licences to use specific songs in a movie soundtrack. The licence covers both the musical composition and the sound recording, compensating the rights holders for the use of their music in the visual context. Let’s say you are a content creator and you want to upload a YouTube video that includes popular background music, to be able to do so you will need a Synch Licence to avoid any copyright infringement. These licences are usually negotiated directly with the copyright owner or their publisher. Here’s an example of a Synch Licence.

• Master Recording: This type of licence grants you the right to use the “Master” of a specific version of a song. A Master Licence can be used in both audio and visual, so it can be tricky to tell the difference between a Master Recording Licence and a Mechanical Licence. Usually, a Master Recording Licence is a Synch or Mechanical Licence for the master recording of a song. For example, if you want to use a well-known artist’s version of a song in visual you will need to have a Master Recording Licence plus a Synch Licence. On the other hand, if you want to use it with an audio project, you will need a Master Recording Licence plus a Mechanical Licence. Master Licences are “custom-made”, which means that they are directly negotiated with the copyright holder upfront to create a formal agreement. You can see an example of a Master Recording Licence.

• Print: The Print Licence protects the intellectual property and is needed if you want to reproduce and distribute sheet music or printed lyrics that an artist has created. It grants permission to rearrange, display and or print sheet music, notes and or lyrics of a song. For example, a music teacher wants to perform copyrighted music during a school concert. The teacher must obtain a print licence to distribute copies of the sheet music to the students for their performance. A Print Licence is custom-negotiated directly with the copyright holder and music publisher.

• Blanket Licence: This licence grants you the right to use a vast music catalogue from multiple copyright holders for a specific purpose or venue. A Blanket Licence simplifies the process by granting permission to use a wide range of music under a single agreement. For example, Digital Services Providers (DSPs) such as Spotify, iTunes or Radio Stations will often pay an annual fee that allows them to use as many licenced songs as they wish. These licences can be issued by PROs, such as BMI, SESAC, and ASCAP or the MLC (Mechanical Licensing Collective). Click to see an example of a Blanket Licence.

Understanding the intricacies of music royalties and the licences required for different uses is vital for all stakeholders in the music industry. Having a clear understanding of when and where to apply the different types of music licences is essential for individuals looking to incorporate music into their projects. From live performances and radio broadcasts to film soundtracks and digital streaming, each type of music licence plays a unique role in shaping the dynamic relationship between artistic expression and commercial use. 

As the music industry evolves, staying informed about these organisations and licences will empower everyone involved to actively shape and contribute to the continued richness and diversity of musical expression.

Whether you are an artist, a business owner, or a content creator, ensuring that the appropriate licences are acquired not only facilitates legal compliance but also supports the creators by providing them with fair compensation for using their work.