One of our current labs projects deals with streaming music online. During our research into setting up a proper streaming media service we stumbled upon something that is almost as complex as the technology platforms that make this online audio work. Music licensing.
If you are planning to do online streaming you need to think about licensing. It can account for up to HALF of your expenses. If you are conducting any sort of “public performance”, and the agencies consider streaming audio across the Internet a public performance, you must have a license.
To get started you need to speak to ALL of the FOUR licensing agencies: SoundExchange, SESAC, ASCAP, and BMI.
In part 1 of our 4-part series we will take a brief look at the ASCAP license maze.
Here is the quote from ASCAP on public licensing:
A public performance is one that occurs either in a public place where people gather (other than a small circle of a family or social acquaintances). A public performance is also one that is transmitted to the public, for example, radio or TV broadcasts, and via the Internet.
The American Society of Composers, Authors, and Publishers
ASCAP represents 8.5 million songs and collects the “pay to play” licenses for these people.
Step 1: Select Your License Category
ASCAP has several license categories available including:
- Cable & Satellite
- New Media & Internet
Step 2: Select Your License Type
- Non-Interactive Services
- Interactive Services
- Multiple Sites and Services
Step 3: Select Your Rate Schedule
Rate Schedule “A”
Rate Schedule “B”
Rate Schedule “C”
As noted in the sidebar commentary, licensing music can be quite complex. This is only one of the FOUR agencies you need to deal with. Look for our follow up articles on the other three agencies to be published soon.
In an effort to stem the erosion of their extremely profitable music licenses that were lost when music CDs went the way of the dodo bird, the industry has managed to form a byzantine maze of license contracts backed by US Government legislation thanks to years of lobbying. To keep it “fun”, there are dozens of license models that have evolved at EACH agency in order to protect the long-standing traditional broadcast radio allies while levying the maximum possible fees on Internet broadcasters. There are also several license agencies involved, each vying for a piece of the same pie; and inevitably double-dipping forcing online broadcasters to pay 2 or 3x for the same music play.
The system of music licensing is overly complex due primarily to what we view as corporate greed on behalf of the royalty and licensing agencies. We are all for artists being paid. We encourage that. We want that. But the numbers don’t lie, the licensing agencies that claim to be acting on behalf of “the artists and record labels” leave very little at the end of the day to give back to the artists even after charging 3x for the same song play. The general consensus is that less than 10% of the revenue generated by licensing actually ends up in the hands of the original artist.