Last week, I participated in a discussion about music royalties for broadcasters at the Texas Association of Broadcasters Annual Convention in Austin. Speaking on the panel with me were the heads of the Radio Music License Committee and the TV Music Licensing Committee. These are the organizations that represent most commercial broadcasters in their negotiations with ASCAP, BMI and SESAC for public performance licenses for “musical works” or “musical compositions” – the underlying words and music to any song. In our discussion, there was a general summary of the licenses needed for the use of music by broadcasters, a summary of the status of some of the current royalty negotiations, and questions about other issues in music licensing. As this discussion raised a number of issues that I have covered in articles posted on this blog, I thought that it might be worth highlighting some of that past coverage so that those interested in any topic can read a bit more on these subjects.
The TV industry seems to have far fewer issues than radio, perhaps because radio is so much more music-dependent. While there is music in many TV programs, some of it is cleared (i.e. licenses have been negotiated) by the program providers (including some networks), so that stations need only worry about licenses for programming where the music has not been pre-cleared. Thus, TV stations have alternatives of blanket licenses for all programming (principally used by affiliates of networks where music has not been pre-cleared) or per-program fees where stations pay for music only in programs or program segments where music has not been licensed by the program suppliers.
The television industry has an agreement with SESAC that runs through the end of 2019 (see the TVMLC website here for more information about SESAC). Negotiations are going on with ASCAP and BMI for new licenses. ASCAP’s license for commercial television expired at the end of 2016 (see TVMLC’s information about ASCAP here, including their agreement for an Interim License with ASCAP). BMI’s license with commercial TV stations runs through the end of 2017 (see the TVMLC BMI information here).
Radio has recently reached an agreement with ASCAP for a new license that runs through 2021 (see our article here). On SESAC, RMLC recently concluded an arbitration process that cut radio royalties more than 50% (see our article here) retroactive to the beginning of 2016 and running through the end of 2018. This year, as we wrote here, has been a busy one for RMLC, as not only have these processes been ongoing with ASCAP and SESAC, but a BMI license remains to be negotiated (or litigated in rate court).
Radio has also had to deal with a new performing rights organization, Global Music Rights (GMR), principally representing songwriters who have withdrawn from ASCAP and BMI. RMLC has gone to court to seek to have an arbitration process, like that used with SESAC, imposed on GMR. That action is being contested by GMR. Until that litigation is resolved or settled, GMR has offered radio stations an interim license to play its music, recently extended through March of next year (see our articles here and here).
Another issue discussed in the session was the fact that even though these performance royalties cover the broadcast of a station’s simulcast programming on the Internet, they only cover the rights to the composition of a song – the words and music – not the performance of a particular recording of that song. While, in the US, there is no performance right in the recording of a song (a “sound recording”) when played over the air by a broadcaster, there is a sound recording performance royalty when a radio station streams its signal on the Internet. Thus, a station that is streaming must also pay SoundExchange for this performance right to the sound recording (see our articles here and here on this topic). I am still surprised by how many calls I get from broadcasters who are streaming their signals and ask if SoundExchange really is owed money even though the broadcaster is paying ASCAP, BMI, and SESAC (and in many cases GMR as well).
Another topic for discussion last week was what these royalties do not cover. These royalties cover only the public performance of music. They do not cover “synch” or “master use” rights to take recordings or songs and put them into some fixed form with other content such as spoken words or video footage. Thus, as we wrote here and here, using music in podcasts is not covered by the licenses from ASCAP, BMI, SESAC, GMR or SoundExchange. Similarly, there are issues in using recorded music (or even musical compositions) in pre-recorded broadcast advertising (see our article here and here). And, even though broadcasters have paid for the performance of music, when radio or TV programs are played in front of an audience of people who are not friends and family, a venue such as a store or restaurant will usually need its own public performance license (see our articles here and here).
Obviously, music licensing is a complex subject. All stations need to discuss the specifics of their licensing needs with someone who really understands these issues. The articles we have published can help to identify some of the issues, but as with any legal topic, the actual legal result is very dependent on the facts of a particular case. So, when you are using music, make sure that you do your homework to avoid the issues that can otherwise arise.