What is “SYNC LICENSE FEES”?
• It’s an upfront license fee
paid to you by anyone who
wishes to “synchronize” YOUR COMPOSITION (Words and Music) to picture. Whether it’s TV, Film, a Video Game, a YouTube creation, Commercial, Podcast, wherever, it is considered a “Synchronization” Fee and is tied to your COMPOSITION (a.k.a. Publishing)
What is “MASTER LICENSE FEES?”
• This is an upfront license fee paid to you by anyone who wishes to “synchronize” YOUR MASTER (Sound Recording - i.e. MP3, CD, Vinyl, Tape, etc..) to picture. Whether it’s TV, Film, a Video Game, a YouTube creation, Commercial, Podcast, wherever, it is considered a “Master” License Fee and is tied to your SOUND RECORDING.
What is “PUBLIC PERFORMANCE ROYALTIES”?
• These are Royalties owed to YOU anytime a Composition that you created airs publicly. On Radio, Television, Theatres, Netflix, on the Grocery Store overhead speakers, anywhere. They are paid to you by your Performing Rights Organization and almost every Country around the World has one. In the U.S.A. there are three and you can affiliate with ONE as a Composer/Writer; ASCAP, BMI or SESAC.
If you’re not already a member, you definitely need to sign up!
What is “SOUNDEXCHANGE ROYALTIES”?
• SoundExchange is a U.S. based company that collects ROYALTIES for SOUND RECORDING COPYRIGHT OWNERS (SRCO’s or Record Labels) and FEATURED ARTISTS and NON-FEATURED ARTISTS for when their Sound Recordings are played on DIGITAL RADIO (Internet Radio, Satellite & Cable Radio such as Pandora, SiriusXM, MusicChoice and more)
So if you’re a singer and you sing someone else’s song on your record, you’re due 45% of the royalties due to the FEATURED ARTIST on that track. 50% is paid to the RECORD LABEL. And NON- FEATURED ARTISTS (Guitarists, Backup Singers, Keyboardists, etc) are paid the remaining 5%!
Who knows, you may have Royalties.
What is “NEIGHBORING”?
• This is a fun one.
In the U.S.A, with the exception of the SoundExchange Royalties (satellite radio, digital radio), the only royalty paid for public performance of a record is due to the Songwriter and Publisher of that song (ASCAP, BMI, SESAC).
However, outside the U.S., there are public performance royalties paid to the RECORD LABEL and FEATURED ARTISTS on the tracks!
That means if your song and your record that you own airs somewhere outside the U.S.A., you are owed Neighboring Royalties for that use of your performance on your record!
What is “HARRY FOX AGENCY”?(HFA)
• The Harry Fox agency was set up in 1927 to manage and collect mechanical license fees on behalf of Music publishers in the U.S.A. If another label or artist wants to “cover” (sing a rendition of) your Original Composition, that label can go through Harry Fox to secure a Mechanical License to use your Composition without getting permission (assuming its registered with HFA) so long as they comply with paying the statutory rate (currently 9.1 cents) to the owner (the Publisher). They can do this through Harry Fox or direct to the Publisher.
Example, If Eminem covers your song and it goes Platinum, a platinum record means 1 Million in Sales. The Publisher should receive $91,000 for that 1 Million in sales.
What is “MECHANICAL
LICENSING COLLECTIVE”?
(MLC)
• January 1, 2021. The MLC issued and administered blanket mechanical licenses to streaming and download services (Digital Service Providers like Amazon Music, Spotify, etc..) in the U.S.A. The MLC will collect the royalties from the DSPs (Digital Service Providers like Spotify, Amazon Music, Tidal, etc) and pay Songwriters, Composers, Lyricists and Music Publishers.
If you’re not registered with the MLC, I highly recommend doing so.
This is a business of chasing the pennies but the pennies add up!
What is “MICRO-SYNC LICENSES”?
• This term came about mainly due to YouTube Content Creators. Instead of nominal large sum of money for a licensed use of a song or master (a ‘sync fee’ or ‘master fee’) in a TV Show or Film or Commercial, a ‘micro-sync’ refers to smaller licenses such as someone’s personal YouTube Channel, for personal projects, indiefilms, smallercompanies).
These Micro-Sync licenses are called that because they are small in terms of dollar amounts, ranging anywhere from $2-$99/ license, they tend to be minuscule compared to what you would get in a proper “sync” license.
Micro-Sync income can add value but I caution you against relying on it as a primary source of income. It can also devalue your copyrights by having too much material with Micro-Sync companies.
What is “YOUTUBE CONTENT ID”?
• Content-ID is a system developed by YouTube to manage the ability of rights holders to monetize the unauthorized use of their songs on YouTube. If you have your songs publicly available on the internet (Bandcamp, YouTube, Your website, Soundcloud, etc), chances are somebody, somewhere in the World has literally “ripped” your song from the Internet and used it to score their YouTube video.
Content-ID takes an ‘audio fingerprint’ of your master and scans the YouTube network to find such uses and attaches Ads to that video and then share that Ad revenue with YOU!
What is “MUSIC REPORTS”?
• Similar to the MLC, Music Reports collects mechanical royalties from the DSPs (Spotify, Amazon Music, etc..) and Interactive Streaming Services (SoundCloud, Pandora, Slacker, Tidal, TikTok). They administer blanket deals o/b/o of these services.
What is “NON-U.S. MECHANICAL ROYALTY COLLECTION”?
• Outside the U.S., there are societies such as MCPS, CMRRA, SACEM and other International societies that collect mechanical royalties every time your record is copied on CD or DVD, Streamed or downloaded, and used in TV, Film or Radio. If you are a composer in the U.S. and one of your songs lands on a BBC broadcast in the U.K., there are mechanical license fees to be collected on. These fees are set and regulated by MCPS so it is of your benefit to join MCPS as a Writer or to work with a Sub-Publisher in the U.K. to help you collect those monies!
What is “SINGLE OR ALBUM SALES ON THE DSPs”?
• DSP stands for Digital Service Provider. Examples of DSPs would be Apple Music, Spotify, Amazon Music, Tidal etc..
Because this is the golden age of the DIY artist, and there are so many platforms available for you to self-release your music and offer it for sale such as these DSPs.
Distribution Platforms I recommend would be “Distrokid” & “DashGo”.
What is “LIVE PERFORMING”?
• In Pre-COVID, Live Performing was a thing so I’m going to include it in here because I believe it will come back.
You can play live at venues or even perform at a “house party” for a friend – either having a “cover charge” or a “tip jar” – just make sure they sign up on your mailing list! It’s all about capturing the email so they are in your world.
Since we cannot do live shows right now, you can still perform live and do livestreams / video casts from your home to your fans and using sites like Patreon or Twitch to receive donations / tips.
I know several artists that earn six figures by doing this.
What is “PHYSICAL SALES”?
• It’s worked for centuries and still works today – if you genuinely connect with your fans live, they will buy your CD, T-Shirt, Bumper Sticker, Keychain, Coaster, Frisbee, Furbee, whatever it is!
Sell it!
What is “RINGTONES”?
• A forgotten art, but they still sell!
People crave customization.
APPLE MUSIC has a special section of their store for selling Ringtones. Create :30 versions of your songs and sell them as Ringtones!
What is “SAMPLE PACKS”?
• Companies like SPLICE and NOIZZ have revolutionized the way producers are selling their music.
You can make a beat pack, “breath sounds”, vocal samples, whatever you can imagine, package it and sell it as a “royalty-free” sample pack for other producers to use in their projects!
What is “IN-STORE RADIO”?
• Music heard on the overhead speakers has to be paid for and licensed.
There are many companies around the World that specifically focus on “In- Store Radio” music use.
Just search on Google for “In-Store Radio”!
What is “UNION FEES”?
• In the U.S.A., If you join one of the Unions such as SAG, AFTRA or AFM, there are union fees sometimes due to you when your recordings are used in Movies and on TV if it is a Union production.
What is “LIVE SPORTING
EVENTS”?
• There are live sporting events around the world such as Cheerleading events, Dog Shows, Bodybuilding, Extreme Sports, Ice Skating, and more that need music!
And they need to license that music.
Go make them a deal!
What is “MUSIC LIBRARIES”?
• For most composer/producers wanting to get into Music Licensing, I would highly recommend researching and partnering with a Music Library.
A Music Library’s main purpose is to license music for media, mostly film & TV, although many libraries focus on trailers and ads and other media as well.
Partnering with a trusted library can be a great way to get your music in the hands of an established company with years of success to set you up with a lifetime of royalty income.
You should now understand where your money is coming from. You’ve taken the first step towards learning more about the BUSINESS of Music Licensing.