A Music Licensing Guide for Entertainment Agencies

Music licensing can be tricky, but the WAYPOINT blog is here to break down common terms, procedures, and misconceptions about licensing audio tracks for your next trailer, advertisement, or project.

Music is incredibly important in so much of the work we do. It is one of the core pillars in creating video games, movies, trailers, and so much more. The right music can tie together every part of a project, so you definitely do not want to be held up from getting your perfect track because you do not understand the basics of licensing!

To start at the beginning, what is a music license anyway? A license allows you, the licensee, to use copyrighted musical work for a certain use. Sounds vague, but that is only because the terms of the license can vary from project to project. Maybe you only need to license a song for use at a one-time pop up. The terms for that license will be very different from a license to use a track in a movie (which will be distributed and aired for a lot longer). But before we dive into license terms, let’s talk about finding the music in the first place.

Getting on Track

Before you can license the music, you have to find it first. There is a huge world of music out there, but there are plenty of sites that are specialized for licensing music tracks. They often have large expansive libraries in just about every genre and style you can imagine. Not only that, they also have experienced associates that can help you browse their collection and deliver a selection of samples to match your criteria. Some of these sites include ExtremeMusic, AudioNetwork, Epidemic Sound, and many more.

These resources are great for finding lesser known music that can fit a very specific niche. But they also license popular songs from well known artists and composers. Keep in mind that there is a high cost associated with songs from bigger artists. For example, obtaining a popular song for use in a movie can go upwards of $20,000. Commercial uses demand even more, with prices ranging from $75k to $200k for only one year usage.

If you feel your project needs a particular song, you may not find it on the general music licensing libraries from before. In this case, you will have to approach the music publisher directly to obtain a license. The music publisher often gets confused with the record label, but they are different entities. A record label handles studio time for artists to record their music and own the finalized recorded performance of a song, called a master. In general terms, the record label is more concerned with signing and recording artists, while a publisher handles the management and promotion of the finished tracks.

When it comes to getting a music license, you need to find the music publisher. A publisher largely handles the administration of finished songs. They monitor how songs are used once recorded and are the ones who will be licensing the tracks for your use. To find the publisher for a track, you will need to do some research, but a great place to start is to browse ASCAP’s ACE Repertory and HFA’s website.

Licensing Terms

With a solid understanding of what licensing is and the general process of the main players, let’s dive into some common licensing conditions and specific terminology often used in the industry.

Term Length and Blankets

When you license a track, you will negotiate how long your license is used for. Let’s say you need to license a TV spot for an upcoming video game marketing campaign. You won’t need to use the license for longer than a year, so you can option a one-year license. While 6-months, 12-months, etc. are fairly standard, you can technically obtain a license for any amount of time. If you only plan to air your spot for 2 weeks, then you can definitely negotiate an option for that.

However, what if you don’t want to put a limit on the use of the license? To license a song forever, you will need to license the music “in perpetuity”. Jumping back to our TV spot example, you would need to license the track in perpetuity if you wanted to upload it on your company’s YouTube account. Likewise, licenses for tracks in films will always need to be in perpetuity as a film will likely always be distributed in stores or online.

Blankets are another common term in licensing. Especially as an agency, you will often find yourself needing to acquire music fairly often. This can drive up costs rapidly as you purchase license after license. In this case, you should inquire about blanket purchases. A blanket deal allows you to bundle a set quantity of licenses into one purchase. There will be separate negotiations for how many songs, schedule, etc. but it is a worthwhile deal if you will be needing to license songs often.

 Territories and Distribution Platforms

The cost of your license can be impacted by how you plan to use it. We’ve talked around this before, but the territories and distribution platforms will definitely affect your license.

License costs will vary depending if the track will be used in TV, radio, cinema, online, paid media, or internal industrial use. Obtaining a license for an internal business presentation will be significantly less than obtaining the same license length for an online ad. Part of that is because determining license costs for tv, radio, and cinema also need to factor in regional distribution. Depending on the scope of your project, you may find yourself needing to decide whether you need a worldwide license or a national one.

Usage and Stems

While “usage” sounds like it should belong in the section above, the term has a different meaning in the licensing business. Usage dictates how the licensed song is being used. Common categories include vocal (V), feature vocal (FV), background vocal (BV), instrumental (I), and background instrumental (BI). This terminology is most often used in a cue sheet, a  document in film projects that compiles how and when every song in a movie soundtrack is played. Getting the license for a song used in the introductory montage vs the same song in the background of a scene can differ because of usage.

Stems refer to the individual track layers of a song. If you’d like to license a song, but only want to use the instrumental beat, you will need to ensure you can acquire the stems of the song. Like all other aspects of licensing, your negotiations with the licensor will dictate whether stems are available and how much editing you are allowed to do.

Access to stems are incredibly powerful. You gain a large amount of creative control for how the song integrates with your project. Stems allow you to edit individual instruments and control the mixing of the track. Unfortunately, stems are not always available. It may be because the licensor will not issue a license with stems. In many cases, the stems may not physically be available due to loss of the original  analog recordings or digital files.

Sides and Mechanicals

These last two terms will cover more of the legal and administrative aspects of music licensing. “Sides” is used to refer to the two big players we talked about in the beginning of the article: the publisher and the master recording owner (commonly the record label). These two parties comprise the owners of a piece of music’s copyrights. To clear use and obtain a license for a track, you will need permission from both of these “sides”.

Oftentimes, two separate licensing fees are paid: one to the label for use of the master recording, and another to the publisher for use of the song itself. The distinction is subtle and a little tough to grasp, but the another way to conceptualize this is to think of the song recording (master) and the song overall as two separate entities. Labels will often own the SR (sound recording) copyright. Music copyrights are a separate story on their own, but you can read more about that from GoForthMusic’s blog article on PA vs SR Copyright Forms. If you are obtaining a license from a music licensor and not the publisher directly, you usually will not have to worry about dealing with the label.

Our last topic, mechanicals, are not commonly dealt with in simple license deals, but they are important to consider. Mechanicals refer to royalties derived from selling music. All the main parties that contributed to creating the song will have a unique contract for distributing royalties. If your project involves selling the song in any way, you will need to discuss mechanicals in your licensing negotiations.

It is important to remember that every aspect of how you use a track will factor into your license. Licensing can be tough to dive in to, but we hope this article has improved your knowledge of general terms and the licensing process. If you’re interested in more information about music licensing, check out SonicScoops’s Music Publishing 101. For more informational articles about the video game and entertainment industries, read more on the WAYPOINT Blog.

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