A Guide to Music Licensing: Fundamentals

In the second part of this series of blog post about Music Licensing, we’ll be going over how licensing and publishing works. I’ll provide you with a high-level overview and cover some of the intricacies in greater depth later on in this series, but it is vital for you to understand the basics first.

Part Two: Fundamentals

Maybe I’m stating the obvious here, but the difference between thinking you own the rights to a song or composition and knowing for sure is a big one. Having a thorough understanding of distribution rights is especially important when you plan on licensing your music.

There are many different licensing deals in existence. My goal here is to help explain them to you so you are capable of looking at your situation and think about what kind of deal might apply best.

First off, what does it mean to license your music?

Basically, it means that you’ve created a song or composition that someone else finds valuable. And because of this, they want to secure the rights to use your music in an audio-visual project like a YouTube video, a TV show or a computer game.

In this scenario, you are, what the industry knows as the “licensor” and the other party is the “license holder.”

The license holder, or licensee for short, needs to reimburse you for your song or composition, and there are many ways of doing this, but usually, it’s for a fee.

But let me stress this, as this is important: a transfer of ownership doesn’t take place when you decide to license your music.

Music licensing is a bit more complicated than the example I gave above, but it’s vital for you to understand the basic concepts first. We’ll be looking at a real-world scenario and dive deeper into the complexities around music licensing in a separate blog post.

Who Owns What?

You may wonder who owns what rights to your song or composition.

The quick answer is if you’ve written or produced and recorded the song entirely on your own and you are operating as an independent artist, you own 100% of the rights. After all, this is intellectual property that you’ve created on your own.

When you are co-writing a song with another songwriter or produce a track with another producer, things get a bit more complicated. The same goes when you find yourself in a situation where you have a business arrangement with a record label or publisher. And again, we’ll be covering the intricacies of rights in a separate blog post.

What Does It Take to License a Song?

First and foremost: A great song!

Then you’ll need to have a clear understanding of rights ownership, Professional Rights Organizations (PRO) affiliation, accurate metadata, proper submission and follow-up techniques, a target, and an understanding of licensing terms and a licensing process.

And to complicate things even further, “music publishing” is another important aspect that goes hand in hand with “music licensing.”

Let’s go over that one now.

What Is Music Publishing?

Music publishing is a way to exploit the copyrights to songs and compositions to generate a revenue stream. And this is done via a business entity or company that is specialized in “publishing” music, or simply known as a “publisher.” A publisher is also responsible for collection the royalties and paying these out to the artist or artists.

Let me illustrate this with the help of a simple example.

Let’s imagine that you are busy writing a song called “Snitches been Snitching, Bitches been Bitching.”

After having played the song to a person you know in the music industry, he senses that the song will cause a stir in the rap scene and really believes that, with the contacts he has in the industry, he’ll be able to make a lot of money from the song.

So, he makes a deal with you to buy all or a portion of the rights to the song. He also offers to pay you some money for the song upfront and even agrees to pay you royalties four times per year as he generates income for the song.

Your acquaintance plans on making money with the song multiple ways, including having it distributed on different music platforms like Apple Music, Spotify, and Tidal, getting it played on the radio, licensing it in multiple TV shows, and more.

He will collect the revenue on all those sources and pay you your royalty.

And that’s a very simplified version of what a music publishing deal could look like.

All of the above is meant to give you a basic idea of how music licensing works. At the same time, I want for you to understand the critical part that publishing plays in your understanding of that process.

In the next post, we’ll be going over ways to getting your music heard by publishers and key music executives. Check back soon!