KEEPING THE BEAT ON LICENSING MUSIC
FOR MULTIMEDIA PRODUCTS
(1998)

Music often plays a major role in multimedia products. This article discusses the copyright issues relating to music licensing for those products.

Usually a musical composition posses three separate copyright interests: in the sound recording, in the musical composition and in the lyrics ("musical composition" is used in this article to refer to both the composition and lyrics). This is important to remember especially when a work is in the public domain; i.e., when the copyright has lapsed. For example, one might wish to use Beethoven's Symphony No. 9 in a multi-media product. Knowing that copyrights are generally granted for the life of the author plus fifty years, one might think "Okay, Beethoven finished this work in 1824 and he died in 1827. Add fifty years, 1877. Great, I'll use the CD I have of this Symphony, which was recorded by EMI records in 1987."

No need to get a copyright license, right? Wrong. This is where distinguishing between sound recordings and musical compositions is important. Although Beethoven's musical composition is in the public domain, the CD is a sound recording made in 1987 and EMI has a valid copyright interest in it.

One should always ascertain how many copyright holders existing a particular work. For audio recordings, the best place to begin is the Harry Fox Agency. Other good sources are performing right societies like ASCAP, BMI or SESAC. One might also check if the work is registered with the U.S. Copyright Office. Be aware, however, that Copyright Office searches reveal only registered copyrights; works need not be registered for there to be a valid copyright interest in the work.

After one finds who owns the relevant copyrights, the next question is who should contact the owners. One may do so directly. Many multimedia products will, however, involve complex licensing issues, and it may be necessary to retain an attorney familiar with licensing issues, a specialized "clearing houses," or a combination of the two.

Which rights should be licensed? Copyright owners possess the exclusive rights to: reproduce their works, make derivative adaptations of their works, publicly distribute their works, publicly perform their works, and publicly display their works. Only the first three rights typically apply to sound recordings (although there are performance rights in sound recordings for certain digital performances), and all six may apply to musical compositions.

The rights to be licensed will vary according to the product. One may need licenses to distribute the music in a tangible form (e.g., on CDs) and in a specified territory; if the product displays lyrics, then reprint rights are needed. Public performance, adaptation, additional distribution and merchandising rights may also be necessary, among others. If the product will play music accompanied by images, synchronization licenses will need to be obtained; if not, one might need only mechanical licenses. Other rights might also apply, again depending on the product.

The next issue is determining how the licensor should be paid. Payment can be a flat fee (e.g., for a set price you may use a song as much as you like) a royalty (e.g., the licensor might receive 5% of your product's net earnings), or a combination the two. The negotiated price will again depend on your product and factors like how important the music is to it, how much the music will be used in the work, the music's value in the open market and the intended market.

Set aside time to procure these licenses. Locating rights holders, negotiating with them and finalizing appropriate agreements usually takes more time than anyone expects. Obtain the needed licenses before your product is completed; you will have no leverage if the licensor knows you have already incorporated the music into the product. Regardless of the complexities and cost of obtaining the necessary licenses, take the time and money to do it right. As the following article indicates, defendants in copyright infringement cases often find to their everlasting detriment that the failure to spend a little more time and money early on in a project can result in a large damage award in the end.

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