Music Licensing Guide
In this music licensing guide you can find everything you need to know about music licensing and how we can help you stay above board when using music for your business.
If you have any questions not explained here, please do not hesitate to get in touch and we will be happy to answer them for you.
Alternatively, if you would like a more in depth discussion with our team to discuss your needs or concerns, you can book a consultation with our experts here.
Music Licensing for Businesses
You have to be properly licensed to use music commercially, period. Whether you are streaming music for business use in an app, on a website, or in a physical space, you have to get permission and pay the rightsholders.
While there are many options for businesses to use music, most come with tremendous drawbacks: spend hundreds of thousands of dollars negotiating direct deals with multiple rightholders, sending your customers out to a third-party platform, or using royalty-free music.
VL Group makes music easy, and that includes licensing and compliance. VL Group's music APIs free you from the legal issues and technical challenges of integrating and streaming popular music into your digital experiences.
Read on for a quick overview of important things to know about licensing music for business use.
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Music Licensing Guide Overview
Music licensing is essential if you wish to use music in a business setting. The license you require, and the royalties you will pay, depend greatly on the specific music involved, its intended use and the business setting. Hopefully this guide will answer all of your questions but if you need help or have specific questions not raised here you can contact us any time and one of our team will assist you.
Individuals who produce original content, be it music, films, games, or artwork, possess the rightful authority to govern the fate of their creations. Whenever an individual or a company intends to utilize music, they must seek permission from all the creators involved and, in most instances, compensate them for the privilege of using their music. These agreements are commonly referred to as licenses. It is important to recognize that the beloved artists you admire all desire to be fairly remunerated for their artistic endeavors.
Each recorded musical piece possesses two distinct copyrights, both necessitating a license: one for the recorded rendition of the song, often known as the “master recording,” and another for the fundamental words and notes constituting the song. This is commonly referred to as the music’s “composition.”
The ownership and control of the master recording typically reside with the record label. When an artist or musician enters into an agreement with a record label, the label undertakes the tasks of recording, marketing, promoting, and licensing the music. As a result, the record label assumes the responsibility of managing contracts and collecting royalties on behalf of the artist.
Composers or writers frequently establish agreements with a separate entity known as a Publisher, which assists them in identifying licensing prospects, negotiating contracts, and collecting earnings on their behalf. The realm of composition licensing can become quite intricate, especially when multiple writers or composers collaborate on a single song, with each artist potentially being affiliated with a distinct publisher. Moreover, if you plan to publicly perform the songs—such as playing music during a fitness class, in a bar or retail store, or streaming music online—a public performance license becomes necessary.
Specific Use Cases
The license you require to use music in your business operations will depend on the specific use of the music you wish to utilize. For example If you want specific songs, or to use them as an integral part of your customers experience, the required license will change. If you wish to discuss your requirements in more detail or help in identifying your licensing requirements please request a consultation.
Securing a synchronization license allows you to pair music with moving images seamlessly. However, in the case of popular music, obtaining a synchronization license is limited to a song-by-song basis. This entails acquiring licenses from the record label/artist as well as the publishers/composers, encompassing all the composers who have ownership stakes in the song.
A performing rights organization (“PRO”) has the authority to grant a public performance license. In the United States, there exist four PROs, and each individual writer has the freedom to choose which PRO to collaborate with. By working with a PRO, businesses can obtain a single performance license that encompasses all the writers represented by that particular PRO. To ensure comprehensive coverage of all the writers for the songs you use, it is necessary to acquire licenses from all four PROs. It’s important to note that personal streaming services like Spotify or Apple Music cannot be used for business purposes, as their licensing terms explicitly prohibit such usage.
Music for use in fitness classes requires a different license to the one required for usage in the background of videos. You will still need to work with one of the 4 Performance Rights Organizations as well as the record label. Alternatively you can use a specialized fitness music provider.
Acquiring this ability for their On Demand video library is often the desired outcome for most content creators. However, obtaining such a license necessitates a synchronization license, this is akin to licensing music for a commercial, which can be both financially burdensome and time-consuming.
Consider a workout soundtrack that is carefully curated with pre-selected beats per minute and timing. However, each time a user engages in the workout, the songs are shuffled, similar to a radio station experience. This type of setup is categorized as Non-Interactive and is significantly more cost-effective than the Interactive/On Demand model, amounting to orders of magnitude in savings (approximately 100 times cheaper). Furthermore, it eliminates the need for direct agreements with labels or music publishers in the United States.
Legal
Failing to properly acquire the correct licensing for the music you use in your business can result in severe penalties. It is important to be sure that you are covered for the specific music composition and its intended use. If you require assistance understanding how our API helps keep you free from legal troubles, please get in touch with our team, we will be glad to help you.
Penalties for copyright violations can reach substantial amounts, with fines going as high as $150,000 per infringed work. Over the past few years, the music industry has been intensifying its efforts to enforce copyright regulations.
An “international copyright” that automatically safeguards a work worldwide does not exist. To ensure protection, licenses must be acquired directly from copyright holders, such as labels and music publishers. Outside of the United States, licensing is typically managed by rights societies in individual countries. For Master Recording licenses, options include obtaining them from US record labels or their international counterparts. Publishing licenses, excluding PROs, must be obtained from publishers in the specific country where the product or service is being offered (some publishers outside the US may cover multiple countries). Unauthorized use prevention in a particular country relies on the national laws of that country, necessitating the acquisition of rights for each country where music will be commercially played.
If you have been utilizing music in your business without the appropriate license or with an inadequate license, we strongly advise you to seek assistance from a music attorney or a reputable company that can guide you in understanding and obtaining the correct licenses. Alternatively, it is crucial to familiarize yourself with the risks and challenges associated with music licensing. You can achieve this by either hiring your own lawyer or collaborating with a trustworthy third-party entity that specializes in licensing. When selecting a third party, ensure they possess the necessary rights to license content to you and offer suitable indemnification. Opting for your own lawyer may involve higher costs, but it can expedite your learning process, particularly if music plays a significant role in your business operations.
The terms of use for the Spotify and Apple Music APIs explicitly mention that they are not intended for commercial purposes. Although enforcement of these terms has historically been lax, the situation is rapidly evolving. Labels and publishers are becoming more proactive in sending cease and desist letters to infringing entities, and Spotify itself has begun reaching out to companies that violate these terms. It is essential to be aware of these developments and ensure compliance with the stated guidelines to avoid potential legal consequences.
When using music in a live video broadcast, it is necessary to compensate both sets of rights holders: the owners of sound recordings (labels or artists) and the owners of underlying compositions (publishers). Solely paying performing rights organizations (PROs) for these digital broadcasts is insufficient regardless of if it is archived. Qualifying Internet Radio Broadcasters have the option to pay for sound recordings through Sound Exchange. If you do not fall under this category, it is recommended to discuss your specific needs with us to explore alternative licensing solutions.
Physical Spaces
As you would expect, using music inside of a physical space comes with some legal licensing requirements. Depending on how essential the music is to the provision of your business services, the license you require will differ. For help understanding which category of license your needs fall under, you can contact us any time or book a consultation with our team.
It is important to note that downloading music you have paid for is not synonymous with playing that music openly in a business environment. The act of downloading music for personal use is distinct from the legal obligations and licensing requirements associated with playing music publicly or commercially. To comply with copyright laws, obtaining proper licenses and ensuring public performance rights are necessary when utilizing music in public settings.
It’s crucial to understand that standard PRO licenses for businesses do not automatically grant the right to use songs in fitness classes. This means that obtaining a distinct license, beyond the standard PRO license, is necessary to ensure compliance and legal use of music in fitness class settings.
How we help
At VL Group we provide you with all the tools you need to incorporate music legally into your business app or website. Our music API will reliably and speedily serve music to your customers, and our tools track your licensing and royalty requirements as well as provide you with your customers' usage data. To begin your journey with us you can sign up here!
VL Group provides a rigorous and fast music API for using music in your websites or applications. We make it easy for you to handle music licensing, rights holder payouts, technology integration and analytics. After 20 years working with some of the biggest brands in the world we are extremely confident in our API and its ability to deliver results for you.
VL Group has a limited catalog that it can provide for sync licenses. If you are looking to use major label content for a synchronization use case, we can connect you with the appropriate rightsholders.
