What is music licensing and how can it make an artist/songwriter successful? In the music industry, a license is really a “music clearance” sought by a person or company that wishes to use or reproduce another’s work. Currently, there a variety of ways in which licensing can create revenue streams for artists and songwriters. There are hundreds of cable TV shows that use music, films of all stature that need soundtracks, and cell-phones that can play ringtones and ringbacks, among others All of these involve money being paid in return for the right to use someone else’s music.

A record company obtains a mechanical license from a publisher to record and release the publisher’s artist’s compositions. A film producer will obtain a master- use license from a record company to use their recording (the master) in their film. This film producer would also have to obtain a synchronization license for the right to use pair, match, or synchronize the composition itself from the publisher, who administers or owns the copyright in the song itself. It is often a much easier and more streamlined process to obtain these licenses when an artist’s record company is also the artist’s publisher.

When issuing a synchronization license, the fees paid to you (or to your publisher/record label) are open to a number of negotiable variables. The territory can be the US, North America, or the world. The type of media is also negotiable as the use in a film may be reproduced as use in DVD’s, a TV series, a soundtrack, etc. The nature of the usage will also cause the fees to escalate, depending on whether the song is a featured element of the visual, background music, or a closing theme. Generally, the longer the use of the song, be it the intro or the whole thing, the higher the fee.

There is a trade-off that many young, fledgling artists must make when considering when and where to license their music, and under what terms. Many feel that licensing your music for free can still be beneficial as it can immediately increase your exposure. Competition for TV/Film placement is fierce and many managers tell a new artist to welcome the call alone. But it is important to limit the breadth of rights. One way to protect against a loss of future earnings is to negotiate a step-deal, in which very little money is paid up-front, but the producer is obligated to start compensating the artist at certain agreed-upon milestones.